Buhler Versatile Inc. v. R. – TCC: Appellant must produce documents previously given CRA – $2,000 costs payable forthwith

Bill Innes on Current Tax Cases

http://decision.tcc-cci.gc.ca/tcc-cci/decisions/en/item/100027/index.do New Window

Buhler Versatile Inc. v. The Queen (November 11, 2014 – 2014 TCC 364) is another odd procedural case. During the notice of objection process the appellant produced five binders of documents to CRA in order to support its claim for SR&ED expenses and related ITCs. CRA returned the binders and did not keep copies. On discovery the Crown asked for copies of this material and the taxpayer’s counsel refused.

[10] During the examination for discovery of the Appellant’s representative, counsel for the Respondent asked the representative, Mr. Allan Minaker, to provide copies of the Five Binders. Counsel for the Appellant stated that the Appellant would take the request under advisement for the following reasons:

− He was not sure if “we can answer that right now”.

− He was not sure if “that encompasses litigation privilege”.

− “. . . As you know, this isn’t a judicial review. For this litigation, we have included the documents we thought were relevant that advanced our case.”

[11] In its written answers to the undertakings provided during the discovery of Mr. Minaker, the Appellant refused to provide the Five Binders. It stated, “As this case is not a judicial review, all relevant documents have been provided.”

[Footnotes omitted]

The Tax Court made short work of the Appellant’s arguments:

[23] The Appellant argued that the Respondent’s request for the Five Binders is a fishing expedition. It is not clear to me how the Appellant can make such an argument in light of the facts. The Respondent is merely requesting documents that the Appellant, on its own initiative, provided to the CRA’s appeals officer in support of its appeal.

[24] Counsel for the Appellant argued that documents are not deemed relevant for the purposes of proceedings before this Court merely because they were produced to a CRA appeals officer. Counsel’s argument may be correct in certain fact situations. However, documents that the Appellant provided to the CRA appeal’s officer to support its claim that certain expenses constitute SR&ED expenditures are relevant, particularly when the appeals officer reviewed such documents when making her decision, a decision the Appellant appealed to this Court.

[25] The Appellant argued that the Respondent has already had disclosure and now seeks to utilize this Court as a document retrieval assistant. The Appellant appears to be confusing the Court with the CRA. The Appellant provided the documents in the course of the CRA appeal process, but it has not provided the documents in the course of this appeal. The Court will only consider documents that the parties file as evidence in this appeal.

[26] Finally, counsel for the Appellant argued that this is a trial de novo, not an appeal on the record. I do not understand the Appellant’s argument on this point. This Court is a trial court and its decisions are based on the evidence properly before the Court and on the law. The Court’s rules attempt to ensure that, on an efficient basis, each party has the opportunity to review, prior to the actual hearing, any relevant evidence that is in the possession or control of the other party.

[27] For the foregoing reasons, the motion is granted and the Appellant is ordered to produce the Five Binders.

On the issue of costs, the Tax Court was clearly not receptive to the Appellant’s position:

[28] In my view, the Appellant’s actions have lengthened unnecessarily the duration of these proceedings. As a result, the Respondent is awarded costs of $2,000, payable forthwith.