Ryan et al. V. Minister of National Revenue

  • 6th November 20136/11/13
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Client’s Problem

Alleged members of the UN gang were served with Letters of Requirement which demanded that they provide net worth statements for the past three tax years. Failure to respond would result in prosecution.

The concern was that the Minister had no real interest in the client’s tax affairs but rather was gathering information for the police. There is an exception to the privacy provisions of the Income Tax Act which permits the police to obtain taxpayer information from the Canada Revenue Agency, (“CRA”) when a charge is pending in court.

Instructions

Judicially review the decision of the Minister to issue the Letters of Requirement and seek an order quashing the letters.

Evidence Obtained on Cross-Examining CRA Witnesses

The Abbotsford Police had forwarded the client names to the Combined Forces Special Enforcement Unit, (“CFSEU”). CFSEU in turn had forwarded the client names to Income Tax investigators. There were discussions between members of the Abbotsford Police Department and the head of CFSEU with regards to obtaining information back from CRA arising from this referral.

The team leader who signed the Letters of Requirement did not have the authority to issue them.

Court Ruling

Letters of Requirement were quashed for the following reasons:

  1. They were not signed by the person with authority to issue them. Further the attempt by the Director of Vancouver Tax Service Office to delegate such power to the team leader was not permitted under the Income Tax Act.
  2. The Letters of Requirement were not issued for a purpose relevant to the administration and enforcement of the Income Tax Act. The best evidence of that was the manner of service of the Letters of Requirement: in the middle of the night with multiple police officers and police cars in a manner consistent with a police raid. The police entered the property of the clients, gathered information as to vehicles and persons present.

The Applicants were also awarded their costs of bringing the proceeding.

Read the Honourable Judge Michael L. Phelan’s judgement.