[PRIVATE BANKING DATA ON 155,000 CANADIAN ACCOUNTS WERE (PRESUMABLY) TURNED OVER ON SEPTEMBER 30 BY YOUR OWN CANADIAN GOVERNMENT TO THE UNITED STATES.
Plaintiffs Ginny and Gwen, ADCS, and our legal team are now planning the next steps for round two of our fight.
Professor Allison Christians, an expert witness in our Canadian lawsuit, comments:
“In my view it was political malfunction in both the US and Canada that brought forth FATCA and then the FATCA IGA, and that FATCA as applied can be summed up in terms of administration as a case of continuous indifference to individuals who are wrongdoers in no real sense yet bear the brunt of severe punishments meant for others. If the judiciary is also not to blame and not to fix, then it seems there is no avenue to right the wrongs of FATCA anywhere. I hope that is not the case.”]
Cross posted at ADCSovereignty
Here is the actual Order for denying the injunction:
Here are the reasons provided by the Court for denying the injunction request:
 On September 15, 2015 the Federal Court dismissed, in part, the appellants’ action for declaratory and injunctive relief with respect to intention of the Minister to disclose certain financial information to the Internal Revenue Service of the United States of America. The summary trial decision of Justice Martineau addressed only that part of the action dealing with what might be characterized as the statutory interpretation and statutory authority of the Minister to make the disclosure. Charter challenges to the proposed action were, on consent, not addressed and await trial. Thus, the summary judgment dealt exclusively with the allegation that the disclosure was contrary to the Canada–United States Tax Convention Act, 1984 (S.C. 1984, c. 20), the Canada-US Tax Treaty and Income Tax Act (R.S.C., 1985, c. 1 (5th Supp.)), collectively described as the authorizing legislation.
 The appellants move on an urgent basis for an interlocutory injunction, effectively staying the disclosure of their financial information by the Canada Revenue Agency (CRA) to the Internal Revenue Service (IRS) under the authority of this legislation. The Minister has made clear that she intends to disclose this information at the close of business today, hours from now.
 By way of background, and at the highest level of generality, the legislation mandates the disclosure of information about “US persons” held by Canadian banks to the CRA, and provides for the CRA to automatically disclose that information to the IRS on an annual basis. The IRS may or may not use that information to pursue enforcement actions against US persons resident in Canada.
 The appellants are “US persons” by virtue of birth, but have spent their working lives in Canada and are Canadian citizens. They do not hold US passports. They claim to be “accidental Americans”, US citizens only by reason of birth. Their information would be disclosed under the regime, which could lead to the IRS enforcement action. The judgment below is candid that the application of the law could cause the appellants serious difficulties.
 The appellants argue, amongst several other grounds, that the disclosure of this information constitutes assistance to the United States in its enforcement and collection of its taxes, which is prohibited under Article XXVI A of the Canada-US Tax Treaty. The Federal Court found that this prohibition only applies once tax liability has been determined and is enforceable, and is thus not triggered, and that in any event, any such claim was premature.
 The appellants further argued that information sharing was only permissible when that information “may be relevant” to enforcing the treaty or domestic laws of a contracting state (Article XXVII), and as such the information must be assessed for relevance on a case-by-case basis rather than handed over in bulk. The judge below found that, even when the information is still in bulk form and has not been shown to have any further utility, it already meets the “may be relevant” test. The appellants argue, in support of the interlocutory injunction, that the learned judge’s reasons fail to respond to this argument; the judge erred in focussing on the fact that Canada cannot challenge US tax policy choices, but failed to explain how that establishes or meets the statutory requirement of relevance.
 The appellants also argue that the regime violates the non-discrimination provision of Article XXV, wherein a US National resident in Canada cannot be subject to a burden that is not also imposed on Canadians in Canada. The appellants argue that the privacy intrusion, and the burden of complying with the filing requirements, are thus unequally imposed on them as US Nationals resident in Canada. The judge rejected this argument. While he did not directly address the privacy interest, he said that the filing costs are borne by the banks rather than the individuals and thus cannot ground unequal treatment.
I. The test for an interlocutory injunction
 I am not satisfied that each of the three criteria governing the grant of an injunction or stay pending appeal set forth in RJR — MacDonald Inc. v. Canada (Attorney General),  1 S.C.R. 311, 1994 have been met.
 The appellants assert four serious questions to be addressed on appeal. At this stage the Court only needs to examine the questions and be satisfied that they “may” form the foundation of a meritorious appeal. In addition to the grounds reviewed above, the appellants argue that the automatic disclosure of taxpayer information of Canadian residents who are also US citizens, is not authorized by the Canada –US Tax Treaty. While Martineau J rejected this argument, and the subsidiary arguments which underlie it, the question at this stage is only whether the appellants might have a credible case to make an appeal. I am satisfied that they do.
 I am not, however, satisfied that the criteria of irreparable harm has been met. The Minister concedes, on two occasions in her memoranda, that “there is no taxpayer information concerning the Appellants in the batch of ‘slips’ that have been collected by the Minister from financial institutions pursuant to Par XVIII of the Income Tax Act and which the Minister must disclose to the United States, pursuant to the IGA, on or before September 30, 2015.”
 On this understanding, the appellants do not meet the second criteria of the RJR — MacDonald test. As no financial information concerning the appellants will be sent to the IRS, there can be no irreparable harm.
 Turning the third criteria, the balance of convenience, the Minister concedes that the appeal will not be moot as of this transfer of information this afternoon. The Minister concedes the existence of a continuing live controversy. While mootness is always an question for the panel of this Court hearing the appeal, at this stage, the Minister’s position that the appeal will not be moot tips the balance of convenience in favour of the Minister.
“Donald J. Rennie”
Canadian injunction request related to summary trial denied.
@Brockers, the government was smart when they combed through the files to make sure Ginny and Gwen had no “slips.”
They are NOT damaged in this round of disclosure, its only in future rounds they may be damaged.
I am not a lawyer but this was a smart chess move.
But here is a KEY point that we should be very happy about;
“While Martineau J rejected this argument, and the subsidiary arguments which underlie it, the question at this stage is only whether the appellants might have a credible case to make an appeal. I am satisfied that they do.”
Folks, this is the best news we could have gotten. US Courts will not help us, but Judges in Canada might now be listening………
Sorry to hear this folks. From a quick read it sounds like the reason for the denial is that there were no slips specific to Gwen and Ginny. I wonder if they were never going to send info on the plaintiffs in the first place or if they specifically are withholding sending Gwen and Ginny’s info (or are claiming to do so) so that the injunction will be denied on the other 154,998 slips.
No harm, no foul? Just don’t try to open a bank account in Canada, Gwen and Ginny!
I agree with George, noticed that the judge thought there is merit to an appeal, and was going to post that but George beat me to the punch. So the fat lady hasn’t sung just yet, and it ain’t over.
@Bubbles….I hear you…..but that is not what the suit was about. The suit was a hyper technical legal argument on certain clauses in the IGA and the treaty.
I have to say, THIS Canadian Judge…….he is right.
But I say he is RIGHT and he gives HOPE.
Ginny and Gwen were NOT ratted out in this round, they face no harm, there information remains private. They have not been denied the opportunity to open an account either.
This Judge “gets” that maple syrup runs through their veins.
@Schubert, “but George beat me to the punch. ”
George does the Rocky dance….. 🙂
The Government is NOT dancing over this. They needed another punch and they missed.
And remember……ADCS has the best legal talent in Canada.
“The appellants assert four SERIOUS questions to be addressed on appeal. At this stage the Court only needs to examine the questions and be satisfied that they “may” form the foundation of a MERITORIUS appeal.
While Martineau J rejected this argument, and the subsidiary arguments which underlie it, the question at this stage is only whether the appellants might have a credible case to make an appeal. I AM SATISFIED THAT THEY DO.”
@Brockers…….this is sooooo much better than the Bopp verdict……sooo much better………
Game on people, game on………
Up and Down – Down and up.
as we pick ourselves up and carry on.
Thanks for making us read the optimism between the lines of the *Canadian denial*, George!
After three rejections (the Bopp case, the Plaintiffs’ initial case and their request for an injunction), there are those out there who will have lost their morale in this fight. To date, we are only aware of one positive decision in favour of a victim of Fatca, which was rendered by a Dutch human rights tribunal last year. For this reason, many of us remain very hopeful and continue to support Giny and Gwen in the Charter court case. There is light at the end of this tunnel…
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From a quick read it sounds like the reason for the denial is that there were no slips specific to Gwen and Ginny. I wonder if they were never going to send info on the plaintiffs in the first place or if they specifically are withholding sending Gwen and Ginny’s info (or are claiming to do so) so that the injunction will be denied on the other 154,998 slips.
I am not generally a person who believes in conspiracy theories, but I think your point is well taken. This had to be strategic on the Feds part. In my first affidavit, I disclosed reportable accounts. Who in Canada besides Gwen and I have larger than life bulls eyes painted on our backs? Our names and facts are now well known much to the chagrin of some of my distant conservative CANUSA relatives. They must have really good search engines on their computers because it looks like they were deliberate in not disclosing mine. Do they expect me to be appreciative? Besides both Canadian judges fail to recognize that the two of us represent so many more than just ourselves. We represent all of you so affected! But as @George says, this judge does see that rather than Type O-, maple syrup runs in my veins. I am a Canadian. Always was always will be. I don’t care what the USA calls me. They don’t get to define me, I get to. I AM CANADIAN.
We will carry on with your encouragement and generous support. We are still at the beginnings of this long march to justice. Hear us roar! We are not going away.
“After three rejections (the Bopp case, the Plaintiffs’ initial case and their request for an injunction), there are those out there who will have lost their morale in this fight.”
Use competitive types would argue this does nothing but fire us up even more. They can rule against us all they want, they won’t win, it’s just not possible.
Imagine what it would be like trying to collect information and later blood money from people who will do whatever it takes to resist? These are people who are permanently residing outside US jurisdiction and who loath to be branded as “US citizens”. Good luck with collections. To the governments that support this thievery, don’t expect any gratitude either from a really pissed off electorate.
Remember marathon, not sprint.
The defendant held a card the plaintiffs don’t have, namely access to all the 155,000 names. How simple it would be to make two disappear in order to support the case.
Sue Murray states: “Based on my review of the information slips I can confirm that there are no information slips in relation to either of the appellants in this proceeding.”
“Based on my review” is quite different from saying “I guarantee the plaintiffs’ data was not given to CRA.”
@ Ginny Hillis
We’re disappointed in the rulings. We’ll pause briefly as we regroup. We’re still with you and Gwen and the entire ADCS team. Breathe in. Breathe out. Breathe in again and “Surgite!”
Way way back when the IGA’s were first announced some Brockers(especially Victoria Ferauge) suspected certain “connected” individuals would be excluded from data transfer to the US by their home country tax authorities(Especially in France). At the time the IRS and the compliance condors were completely aghast at this possibility and denied denied it would ever happen to the point of implying it would not be technically possible(The condors claimed that somehow the CRA would not be able to modify the records submitted by the banks). Well I think Victoria Ferauge and co. are increasingly looking correct.
@ Ginny Hillis and @ Dash
You both raise very good points in terms of whether or not deliberate action was taken to remove or prevent your bank/account information from becoming part of the bundled 155,000 slips of account data. If so, would such action not be regarded as an attempt to obstruct/influence the court proceedings? I am curious as to whether or not a FOI inquiry would reveal whether the CRA actually had your info and that someone acted to remove it from the bundled 155,000 “slips”. While I would never want your data to be in the hands of the powers that be to the South, it is a quandary as to why your names did not appear amongst the “slips” if your data fit the criterion. However, just like Lois Lerner’s “lost” emails will most likely never see the light of day, it appears that it becomes all to easy for those in power to obstruct justice while at the same time erasing the evidence trail of their actions.
There is a small fee involved in some countries but that would provide the clue that a slip was handed over
I’ll just say that only reporting 155,000 accounts doesn’t necessarily mean accounts of 150 000 different individuals residing in Canada, so this strikes me overall as very low reporting standards. Considering the so called billions of dollars that FIs supposedly have invested in this adventure. Perhaps it is first year hiccups. Who knows? But it could point out what we know: Canada is not a tax haven. A FOI inquiry would be ignored, even if possible, for so many years as to be ineffective,in my opinion. But you know, if it walks like a duck…..
The spirit that you and Gwen display is very inspiring. The fight for justice will absolutely continue.
@ Mr. A
It is your kind words and those of so many commenters and generous Canadian and international donors that fuel our determination to do the very best we can by you. Your words, the sharing of the history of your ongoing struggles and narratives of your individual experiences inspire Gwen and I daily. We are so grateful to you for placing your trust in us and ADSC. Plus, Gwen is a really nice person.
If I may make an observation. The fact that the Harper government had to resort to the removal of the appellants names from the list means that they thought they could lose the case. As expected, the government is more than willing to fight dirty, they had better be prepared for some of the same.
@ Ginny Hillis
I echo Mr. A.’s words….both you and Gwen have lead the way into this fight with courage and unwavering resolve. I will try to hold onto my faith that justice will ultimately prevail for, firstly you and Gwen, and, secondly for the millions of others who are represented by yourselves.
Would this first transfer of Canadian (and other Model 1A countries) CRA (other countries’ tax agencies) on September 30, 2015 be JUST the electronic search of existing financial institution records and Canada perhaps has not gone beyond requirements for that first transmittal — Ginny’s and Gwen’s data not found in those parameters?
What are the specific obligations of US Financial Institutions?
There are three categories of obligations: withholding, identification and reporting in case of an Intergovernmental Agreement.
All US Financial Institutions and generally foreign branches of US FIs are withholding agents.
1. What is to identify?
All accounts held by taxpayers of a country which signed with the Government of the USA a reciprocal Intergovernmental Agreement.
2. Are there specific identification criteria?
Yes, including citizenship or country resident, mailing and resident address, unambiguous place of birth.
3. How to identify these accounts?
By electronic record search mainly.
4. Can the electronic record search be done by a third party service provider?
Yes, but the FATCA obligations shall remain the responsibility of the Reporting US FI.
5. When does the US FIs have to conduct the electronic record search?
For existing accounts now, and for the calendar year 2014 before September 30, 2015.
1. What are the reporting obligations?
2. Who has to report?
All US FIs.
For calendar year 2014 before September 30, 2015 and nine month after each subsequent calendar year.
4. To whom?
To the US Internal Revenue Service.