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Info Source Bulletin Number 27

David M. Sherman v. Minister of National Revenue

Indexed as: Sherman v. Canada (Minister of National Revenue)

File No.:	A-387-02
References:	2003 FCA 202; [2003] F.C.J. No. 710 (C.A.) (QL)
Date of decision:	May 6, 2003
Before:	Létourneau, Desjardins, Evans JJ.A.
Sections of the ATIA / PA:	*Ss. 13(1)(a); 53(2) Access to Information Act* (ATIA)**

Abstract

Extent to which para. 13(1)(a) ATIA applies to statistics generated by Minister and derived from confidential information obtained from the United States
Exchange of tax information under the Canada-U.S. Tax Convention
Self-represented litigant's entitlement to costs under s. 53(2) ATIA

Issues

To what extent, pursuant to para. 13(1)(a) of the ATIA and clause 1 of Article XXVII relating to Article XXVIA of the Protocol amending the Convention Between Canada and the United States of America with respect to Taxes on Income and on Capital, can the Minister of National Revenue deny the applicant access to information in the hands of Canada Customs and Revenue Agency (CCRA) relating to tax collection assistance sought from and provided to the U.S. Internal Revenue Service (IRS)?

Facts

The access request was for some statistical information compiled by the Minister of National Revenue relating to tax collection assistance sought from and provided to the IRS.

More specifically, the appellant wanted to know:

the number of requests made by CCRA and by the IRS;
the amount of dollars claimed by CCRA and by the IRS;
the level of acceptance by each agency and the success rate in collecting monies due;
the amount of dollars effectively collected and remitted by the CCRA and by the IRS; and
the yearly breakdown of the statistics covering the above-noted information.

CCRA exempted the information pursuant to paras. 13(1)(a) and 16(1)(b) and (c) ATIA.

The appellant filed a complaint with the Information Commissioner. The Commissioner dismissed the complaint as not being substantiated. The appellant then made an application for judicial review. The Trial Division agreed with the institution that the requested information had to be protected under para. 13(1)(a) and dismissed the application ((2002), 222 F.T.R. 145; 2002 FCT 586) (F.C.T.D.)). In light of his finding and of the fact that consent to disclosure had been refused by the U.S., the Trial Division Judge refrained from considering paras. 16(1)(b) and (c).

Decision

The appeal is allowed and the matter referred back to the Trial Division for a new determination of the appellant's right to access the records in light of the Court of Appeal's interpretation of 13(1)(a) and of clause 1 of Article XXVII of the Convention and, if need be, paras. 16(1)(b) and (c). The Court allows the appellant his disbursements and costs.

Reasons

The Court of Appeal had to determine the scope of paragraph 13(1)(a) in relation to clause 1 of Article XXVII relating to Article XXVIA of the Protocol amending the Convention Between Canada and the United States of America with respect to Taxes on Income and on Capital (the "Convention"). This clause is relevant to the interpretation of para. 13(1)(a) as it determines the conditions under which information exchanged under the Convention is confidential.

Paragraph 13(1)(a) of the ATIA mandates the non-disclosure of records which contain information that was obtained in confidence from, in this case, the United States. The Court first determined that it is not necessary for this exemption to apply that the record itself be provided by a foreign state. A record created by Canadian authorities that contains information obtained in confidence from a foreign government falls under the scope of the exemption in paragraph 13(1)(a). In other words, what is significant for the purpose of this exemption is not so much the source of the record to which access is sought as both the confidential nature and the source of the information it contains.

The Court then looked at the issue of whether the Minister can, in the context of the Convention, reveal the very fact of the existence of information obtained in confidence from the United States, as well as the volume, in terms of statistical numbers, of such information without revealing the contents of the information itself.

Justice Létourneau, writing for the unanimous Court, found that the very existence of such information is not caught by para. 13(1)(a) on the grounds that the Convention allowing for the exchange of confidential information and the laws implementing it are public documents. The public expects that confidential information necessary to collect taxes will be exchanged and to merely confirm what is common knowledge is not a disclosure within the terms of para. 13(1)(a).

With respect to clause 1 of Article XXVII of the Convention,^[4] the Court held that it applies only to information received by Canada and does not require that statistical information compiled by the Minister be treated as secret, provided that the statistics contain no information received under the Convention by Canada.

With respect to the volume of information obtained in confidence, the Court determined that:

statistics obtained by the Minister in confidence from the IRS under the Convention is secret information under clause 1 of Article XXVII of the Convention to which para. 13(1)(a) of the Act applies; and
statistics generated by the Minister and derived from information obtained in confidence from the IRS are not information falling within the parameters of clause 1 of Article XXVII of the Convention and to which para.13(1)(a) of the Act applies, unless their disclosure would reveal the contents of the confidential information itself. Such a determination is consistent with the specific and narrow interpretation that should be afforded to exemptions, particularly mandatory class exemptions such as s. 13, which presume disclosure of information to have a detrimental effect.

Applying these principles to the appellant's request, the Court of Appeal came to the following conclusion:

The number of requests made by CCRA and by the IRS:

The record containing information coming from Canada which reveals the number of requests made by CCRA to the IRS is not exempt from disclosure under para. 13(1)(a) of the Act, nor is the record that contains information as to the number of requests made by the IRS to CCRA when such information comes from Canada, even though the statistics are derived from the information obtained in confidence from the IRS. Statistical information prepared by the Minister that reveals the number of requests made by the IRS to CCRA is not disclosure of information itself obtained in confidence from the U.S.

The amount of dollars claimed:

Information prepared by the Minister about the total amount of dollars involved in IRS requests to CCRA falls under para. 13(1)(a) because it is a Canadian information that contains aggregated U.S. confidential information. The aggregation of the individual amounts of dollars specified by the IRS in its requests for collection assistance does not result in those amounts losing their confidentiality. However, para. 13(1)(a) does not apply to the total amount of dollars involved in the requests made by CCRA to the IRS.

The level of acceptance by each agency and the success rate in collecting monies due:

The percentage of requests accepted for action and the rate of success are not exempt from disclosure. The reasoning applied with respect to the number of requests (see above) governs the answer to these questions.

The percentage of dollars collected and remitted by CCRA and by the IRS:

The amount of money collected on behalf of and remitted to the IRS is exempt from disclosure pursuant to para. 13(1)(a). To disclose the percentage collected is to reveal the aggregate of the dollars claimed by the IRS, an information that was obtained by CCRA in confidence from a Contracting State. However, notwithstanding that the aggregate of dollars claimed by CCRA falls outside the ambit of the exemption rule, the statistic in terms of percentage and amount of monies collected and remitted by the IRS is confidential information within the meaning of para. 13(1)(a). The statistic is Canadian information about U.S. information, but the nature of the Canadian information is such that it is actually the U.S. information itself obtained in confidence from the IRS.

The yearly breakdown

This issue was disposed of on the basis of the respondent's statement that no such breakdown existed and the appellant's acceptance of this response.

Costs

Relying upon subs. 53(2) of the ATIA, the appellant sought to be awarded costs. The Court allowed the appellant his disbursements and costs on the ground that the appeal raised new issues of public interest as regards the interpretation of clause 1 of Article XXVII of the Convention and the extent to which para. 13(1)(a) of the Act applies, in the context of that Convention, to material generated and derived by the Minister from confidential information obtained from the United States.

The Court rejected the respondent's argument that as a self-represented litigant, the appellant is at best entitled only to disbursements. In the Court's view, one of the functions of an award of costs is to indemnify the successful party who has incurred large expenses to vindicate its rights. Justice Létourneau referred to recent cases in which self-represented litigants were awarded costs (Fong et al. v. Chan et al. (1999), 46 O.R. (3d) 330 (C.A.); Canada (Attorney General) v. Kahn (1998), 160 F.T.R. 83 (F.C.T.D.); Coath v. "Bruno Gerussi" (The), 2002 FCT 385 (Hargrave P.); Desjarlais v. Canada, 2002 FCT 95).