Our lawsuit claims that the legislation that enables the FATCA IGA “agreement” between Canada and United States violates Canada’s Charter of Rights and Constitution.
In this phase of the litigation, which little advances the lawsuit, the Canadian Government has asked, in a Motion, the Federal Court to compel the Plaintiffs to provide much additional private financial information. Our Vancouver litigators have had to spend time responding in a very lengthy document that such a request is unreasonable.
Personally, I am disappointed that our litigators have had to spend any time responding to the Government Motion.
Here is the “Overview” to the March 9, 2017 reply to the Government from Plaintiffs Ginny, Gwen, and Kazia:
“OVERVIEW [from pages 28 and 29 of Plaintiffs’ reply to Government Motion]:
1. More than two years after this constitutional and Charter challenge was initiated and its basis made clear to the defendant federal government ministries, the government is now asserting that it requires vast and invasive disclosure of private financial information concerning the Canadian citizen plaintiffs who have taken on the task and public responsibility of challenging highly problematic legislation on constitutional grounds.
2. The government’s motion is more than a mere fishing expedition. The effect of its application for such vast disclosure, if successful, could be to discourage Canadians from advancing precisely the sort of constitutional challenge being advanced in this proceeding.
The plaintiffs respectfully submit that the Court should not permit the government to require private citizens to comprehensively disclose years of private financial information as a precondition to challenging legislation on constitutional and Charter grounds.
This is especially so in the circumstances of the government’s present motion which, as set out below, completely fails to advance any reasonable theory as to how the documents it seeks are relevant to the plaintiffs’ challenge.
3. The government misleadingly glosses over the extremely remote nature of its theory as to the relevance of the disclosure it seeks. Put simply, the defendants [Mr. Justin Trudeau’s Attorney General and Minister of National Revenue] assert that, since Canadian financial institutions could be subjected to a 30% withholding tax on their operations in the United States if the impugned legislation is struck down as a result of the plaintiffs’ challenge, the plaintiffs must comprehensively disclose several years of their financial history on the tenuous and highly speculative theory that those financial institutions could pass on the costs of such a withholding tax to the plaintiffs in some unspecified and unquantified manner.
Among other things, this theory ignores the obvious fact that financial institutions – even when they face a new cost such as a foreign withholding tax – are obviously not automatically permitted to directly deduct amounts from their clients’ accounts in order to cover such costs.
4. As the government openly admits in, among other places, paragraph 16 of its Written Representations, its theory rests on the notion that debits in the plaintiffs’ bank accounts “may be increased” if the aforementioned withholding tax were imposed; while the plaintiffs’ financial holdings “could be devalued”. The who, what, where, and how of such speculative “increases” and “devaluations” are not explained. Suffice to say, these ideas require highly speculative and remote assumptions about how Canadian financial institutions and the U.S. government would react if the impugned legislation were struck down.
5. As for the government’s demand for particulars, the plaintiffs submit that this is simply a delay tactic as demonstrated by, among other things, the extreme lateness of the government’s motion. Not only is the government seeking particulars long after pleadings have closed (and indeed more than two years after receiving the plaintiffs’ original claim), but the particulars sought are, in substance and to the extent that have not already been provided by the plaintiffs, requests for evidence which the government will have the opportunity to request through discoveries.
It is trite that requests for particulars are an inappropriate means of seeking to obtain evidence from an opposing party. The pleadings are intended to illustrate the case to be met; not how it will be proven. In any event, it is extremely rare for particulars to be sought, let alone granted, where, as here, more than two years have passed since the relevant pleading was served and discoveries are contemplated to take place soon.
There are no exceptional circumstances that could justify the government’s delay.“
[The above is part of a 216 page document containing much legalese and private financial information of the Plaintiffs.]
Canadian FATCA lawsuit update:
See posted part of response of Plaintiffs Ginny, Gwen, and Kazia to Government Motion to compel Plaintiffs to provide much more of their private financial information.
Our litigators are resisting the Motion.
Thank you for sharing this excerpt. It is infuriating to see the government using its limitless resources to delay this hearing.
I thought there was an intermediary judge that was assigned to make sure this trial moved along smoothly and quickly.
Thank you for sharing this, Stephen. It is very troubling indeed that our litigators have had to waste effort on responding to these government delay tactics.
On the subject of delay, I know of criminal cases where defendants have been let off because cases did not proceed to trial in a timely manner. Is there any danger of this happening in this type of litigation? Could the government be trying to delay as much as possible so that some sort of “time limit” might be exceeded thereby getting itself off the hook?
Stephen is being modest. Not only are our lawyers resisting the government motion, I can assure you not only as a plaintiff but as a lawyer, that I don’t know when I have ever read such concise yet thoroughly well written pleadings as our lawyers have provided in our Reply. I know how much work and skill was required to produce documents of this calibre.
This is what Joseph Arvay excels at: he doesn’t use the typical boiler plate paragraphs so many lawyers rely on. The way he tailors each word in every paragraph to speak to our issues is the mark of a craftsman. It’s an art that few lawyers possess.
He dismisses the government’s specious arguments and zeroes in on what the Court needs to know about the important legal issues. And as I said before, they are certainly not about Barclay’s grooming and food expenses which constitute the debits in my chequ(e)ing account which the Feds are demanding me to disclose.
Yesterday, I admitted I was Grumpy Cat as the delay was starting to get to me. Today, I can barely contain myself because I am again confident that we are being represented by the best team of lawyers. When the Feds go low, we go high, as it were.
I continue to thank the many of you who contributed to us financially so that we could retain the calibre of lawyers representing us in Canada. I want you to know we are in the best legal hands and I am proud and humbled to be one of your three representatives.
@ Muzzled. The short answer is no. As you stated, that is generally only applicable in criminal cases as the Charter speaks to breaches of rights which are affected by delay to a trial.
There are protections or sanctions in civil cases as well, but they are rarities in the sense that few civil cases are dismissed in that basis but it can be done. And yes the government is using motions, demands and tactics to try to bolster and delay its (weak- my word) case,and yes there is a case manager responsible for overseeing our case and bring it forward.
Sorry, that was hardly short.:-)
There must be some way of making Trudeau pay for this invasive demand of the plaintiffs personal financial information. He should be held politically accountable for his breaking governments behaviour.
Excellent! Keep fighting, do not give up!
As a Canadian / US Dual Citizen and fighting for this here in the US before moving back to Montreal where I grew up. Believe the Canadian Government does not want to admit it made a bad deal for Canadians when signing the “Intergovernmental Agreement” under the Harper Leadership.
In the US, am in touch with my Congresswoman’s Office locally and in DC regarding Tax reform, and her letters indicate that she is for fundamental tax reform, since not much has been done since 1986. Further, her office indicates that she ” is very aware of FATCA and its criticisms, and she works with other Representatives whose constituents face similar challenges.” and has assured that tax reform will be discussed with her colleges.
It seems that change is slow, frustrating, and I believe results are forthcoming.
Sorry I haven’t been around here much lately but I do still keep a close eye on this litigation and look forward (if that is the right way to describe it) to attending the next stage of the proceedings once the next hearing is finally scheduled.
I’m not a lawyer but is it possible for the plaintiffs–since they are the ones making the claim here–to simply refuse to supply the requested information? Can they simply say that the information isn’t relevant and ask the Court to make its judgment based on the available record? Of course I assume the Plaintiffs will need to document the financial assertions made in their original Statement of Claims in order to show harm, but can they refuse to provide detail beyond that?
Thank you so much to our excellent legal team and selfless plaintive for continuing the good fight. Shane on the Government of Canada.
@ Petros
If we are successful and get the Feds’ motion dismissed, we could be awarded costs. Lest I leave you with the impression that they are only asking about our day to day accounts, they are also demanding we reveal every single holding in our RRSP accounts. In detail. How is this relevant as they are exempted except for FBARs. Delay and intimidation might be the logical conclusion.
Similarly, they demand disclosure from our Canadian born partners as to their personal assets. That’s the prime definition of a fishing expedition that courts should resist. Think about this for a moment and let that sink in.
Are they implying that the three plaintiffs are using their husband’s accounts as US tax evasion vehicles? I have no idea but that’s just another example of the Feds over reach with respect to their demands for further personal banking information.
We three have accepted a lot of invasion of our privacy for the sake of this important litigation. What result are the Feds looking for exactly in their demands?
Will they only be satisfied if our spouses are forced to divorce us in order to protect their own Canadian earned assets?
Enough is enough. We have seen the devastation and impact this has already had on families and individuals. Fortunately for the three of us we have incredibly great partners who support us in this cause. If that demand should come up in my Discovery, you can only imagine how I will respond. We know I am not a woman of brief responses.
Thank you for this update, Stephen. Ever since I read Ginny’s comment awhile back about what the government team was demanding I’ve been fuming inwardly about it. It appeared abusive to me and I felt like smacking someone upside the head. Good thing Mr. Arvay is there to reply and resist in a measured, lawyerly manner. It’s reasurring to be reminded that he is indeed a brilliant lawyer and our plaintiffs are in good hands. BTW it’s not just the personal prying, it’s the delaying tactics in general that I find abusive. Justice delayed is justice denied. Every day that passes comes with a risk that the FATCA heat will be turned up a degree or more. If FATCA, the enforcer of CBT, can be defeated then it will open the way to bringing about the demise of CBT. It’s great to see pushback on both sides of the border.
Unbelievable Ginny. Simply unbelievable. How horrible to only have the stress of these long delays but to be treated like this by your own government! Hang in there all of you and thank you.
It’s kind of reassuring that the government is focussing on what happens if the IGA is struck down.
What does that have to do with the issue at hand?
@ Dash
Nice to see you posting again. You ask:
I’m not a lawyer but is it possible for the plaintiffs–since they are the ones making the claim here–to simply refuse to supply the requested information? Can they simply say that the information isn’t relevant and ask the Court to make its judgment based on the available record?
In fact that is exactly what we are saying in our Reply. We have refused to answer questions that are of a fishing nature or irrelevant. The onus is now on the Feds to spend more of taxpayer’s money, and the money generous supporters have sacrificed to defend what we consider their unreasonable position in their demands as they bring this motion forward for a ruling.
As you say, it doesn’t take a lawyer to see through their actions. They are painfully obvious.
Thanks for your questions. Selfishly, this is the type of interaction at Brock I enjoy. I am always happy to answer procedural legal questions.
@Ginny, it is obvious that the requirement that the plaintiffs provide such financial information is both irrelevant and inappropriate.
Why does Justin Trudeau allow his government to make such intrusive evil demands. My point is not that the Canadian government should pay financial awards. My point is that Justin Trudeau should pay politically for this sociopathic government desire for information.
You bet, Petros. Isn’t that just the question. As Lynne Swanson says: Liberal flip floppers.
Generally, I can live with the type of person who presents an argument that I reject. It means that I know where they are coming from and actually stand.
I have less tolerance for people or leaders speaking out of different sides of their mouths depending on when they are the opposition and then move into the majority role.
People are often surprised that my focus is less on what the USG is up to. But I cannot tolerate and will always resist the betrayal of my own government. That has been the deepest cut.
Thank you Cheryl, Bubbles and Em for your kind words and continued support. Means so much to the three of us. We don’t like to talk about our hard days, but yes Embee there are times when my right hook wants to reachout and touch some jaws in a very lovingly ladylike way of course. Not. Instead I grab Barclay’s leash and say who wants to go for a walk? He wags his tail and gladly pays the price by listening to me mumble and possibly curse as we take our slow stroll together.
Stephen, Ginny, Gwen, Kazia–
Just home from a busy shift here on the west coast, so I’m going to keep this short.
Thank you for what you’re doing- you four rock!
BC Doc
‘Will they only be satisfied if our spouses are forced to divorce us in order to protect their own Canadian earned assets?’
PT: “The State Has No Place in the Bedrooms of the Nation”
JT: “Yes it does.”
Could it be that the government is just looking to bide time and delay in hope that there will be tax reform in America which will make this case moot? That way they could feel like they might not lose face?
And all in all- what information does the court actually need to decide if the IGA is against the Charter of Rights or not? Isn’t it just plain PRINCIPLE? I don`t get it. Any details should be relevant to this and only this subject: Charter Rights violation or not. What in the world does that have to do with anybody`s financial accounts?
I am proud to have modestly contributed to your cause (which I make mine) in the past and I continue to follow you closely. The Canadian Government has tactics similar to any other, of delay, bad faith, and intimidation. Shame on them. One would have hoped (before all the IGAs were signed) that any government with a modicum of patriotism (and without a banking and compliance lobby) would have dared the USA to go ahead and withhold and see what happens. One now has learned otherwise.
All the more reason for you to succeed and I think your action is in good hands — indeed your legal team writes very well. It is refreshing to read. I imagine the court will be receptive.
Not understanding the pass on of costs of 30% withholding. The withholding threat is on US source payments. If the Plaintiffs do not have any holdings in the U.S. they then could not have any withholding against any potential transfer payments from the U.S. to Canada.
“30% withholding tax on their operations in the United States.” That I think is a lesser of the fear of 30% witholdings on all US source payments to all banks in Canada (Canadian or otherwise) not limited to payments from Canadian bank branches in the U.S., but including from all financial institutions in the U.S. (do these guys know what they are talking about?). And am I not wrong then other countries and FFI would have to join in on such witholdings? Then there is SWIFT and that is controlled out of New York, so witholdings on all international payments to Canada, unless done through the new friendlier China Bank. It looks like the legal defense are trying to lessen the existential bully threat this poses to Canada.
The witholding action would involve hypocrisy as the U.S. to be even handed would need to bankrupt half the countries in Africa and other of the poorest countries of the world which do not have an IGA.
It sounds like the fishing is for a possible action against the Plaintiffs by the banks for losses if the IGA gets overturned. Yet that would be a different court action separate from this and the question of does the FATCA IGA violate the Charter. Whatever the Plaintiffs have in wealth that has got to be many billions less than the threatened damage to the banks, to make such action by the banks against the Plaintiffs petty, irrelevant, and not worthwhile.
Instead the banks should plan to sue the Canadian Government for damages for such a rotten agreement in the first place that did not have “lose ends” tied up such as compliance with the Canadian Charter, without which left the IGA open to constitutional challenge and threat of risk against the banks. The Canadian Government should be liable for any such losses based on negligence putting the banks into an inherently risky arrangement also involving failure to disclose such risks.
It sounds like the questions might be more relevant if the banks were owned by the government. This is not the case. They are separate entities.
I thought the Canadian court has determined that the risk of a Canadian bank expanding into US markets should be born by the bank.
Surely if the banks were to explore how they could recover the 30% withholding they could come up with more options than charging our plaintiffs. Glad our legal team didn’t get sidetracked by this stupidity.
@Fred(B)
I agree, I also sadly see in the former and now this Canadian Government the tactics of delay, bad faith and intimidation — when they could have been a leader in saying NO to signing the IGA in the first place, at least without protective revision, and even now when they could be negotiating the terms and holding the US to the reciprocity deal in the IGA. There could have been honour in upholding that *A Canadian is A Canadian is A Canadian* — no discrimination by national origin, no defining us as *US Citizens who happen to abide in Canada*. Both the Canadian Conservative and now Liberal governments seem to agree, by their weak actions, that *Congress has spoken* in regard to the FATCA IGA (and etc.).
Godspeed to our Canadian litigation legal team and, as ever, to our plaintiffs, Gwen, Ginny and Kazia.
Thanks, Stephen, for the good work in your continued updates of the painfully slow progress. Your communication is so important.
Thanks to you and all who have helped with financial donations to get the litigation to this point — and with your support of what you, too, feel is a necessary and just cause.