— SEPTEMBER 30 MORNING BUT NO DECISION YET FROM COURT ON OUR REQUEST FOR A STAY.
— Remember, win or lose the stay, we move on to the Constitutional-Charter trial.
Here is a link to part of our request for a stay and here is part of Government response.
— I also enclose below a September 28 response of the Arvay team to some key points raised by Government.
— Starting first with part of our request for a stay in the turnover:
Appropriateness of Injunctive Relief
58. The Appellants acknowledge that the three part test In RJR-MacDonald Inc. v. Canada (A.C),  1 S.C.R. 311 applies to this application.
59. With respect to whether the Appellants have raised a “serious question” on the appeal, that branch of the test will be satisfied if on a limited review of the issues the Court concludes that the Appellants -14- “may” have a meritorious appeal: Coca-Cola Ltd v. Pardhan,
(1999),85 C.P.R. (3d) 501 (F.C.A.).
60. In this case, that threshold is easily satisfied. For example, in his reasons for judgment, Martineau J.:
a. entirely fails to address the meaning and import to be accorded the Technical Interpretation, which unambiguously states that Article XXVII prohibits bulk exchange of financial institution
b. engages in an unduly formalistic and narrow construction of Article XXVIA;
c. entirely fails to address the Article XXV admission which unanswerably shows that the Impugned Provisions violate the Canada-US Tax Treaty; and
d. reaches the conclusion that for the purposes of Canadian law, the Intergovernmental Agreement is a treaty or listed agreement for the purposes of s. 241 (4) of the ITA when that was not pled by the Respondents, where the Intergovernmental Agreement explicitly purports to be subordinate to the Canada-US Tax Treaty, and where the Appellants sought to tender evidence showing that from the point of view of the other party to the agreement it certainly is not a treaty.
61. With respect to whether the Appellants would suffer irreparable harm, there is a real risk that the appeal would be rendered moot insofar as the existing Account information of U.S. Persons is concerned if an injunction were not granted.
62. Under Article 4 of the Intergovernmental Agreement, Canada is required to begin providing the Accountholder Information to the United States by September 30,2015.
63. Canada previously advised that it intended to begin disclosing the Accountholder Information to the United States on September 23, 2015. On September 18, 2015 the Appellants informed the
Respondents of their intent to seek a stay and requested the Respondents’ confirmation that any exchange of information pursuant to the Impugned Provisions would be delayed as a result of it. On September 22,2015, the Respondents informed the Appellants that no information would be exchanged until September 29,2015.
64. Once Canada has disclosed the Accountholder Information, the information will be irretrievable. The impact on the individuals whose Accountholder Information is disclosed will be permanent and irremediable.
65. This is particularly so given that this first disclosure will identify the Appellants and others in their position to the IRS as US Persons where previously the IRS would not have had that information.
66. Thus, once the information is disclosed, the primary purpose of the appeal for such persons and for such information, to prevent such disclosure, will have been rendered moot.
67. With respect to the balance of convenience, the Appellants acknowledge that there is a strong presumption in favour of legislation enacted by Parliament being in the public interest, which presumption is rebuttable if it can be shown that injunctive relief would serve a public interest greater than that served by maintaining the challenged legislation in immediate force: Allard v. Canada, 2014 FC 280.
68. Further, it should be noted that the present motion does not seek a complete suspension of the IGA, but rather only an exemption in respect of a subclass of persons to whom it applies and then only insofar as it seeks to enjoin the disclosure of Accountholder Information and not the collection. Courts have drawn a distinction between injunctions which seek to suspend legislation, and those which seek exemptions from the application of legislation. Those seeking only exemptions are subjected to a less stringent test:Manitoba (Attorney General) v. Metropolitan Stores (MTS) Ltd.,
 1 S.C.R. 110.
69 . Moreover, in the present case, there are, on their face, competing public interests embodied in section 241 of the ITA, the Tax Treaty Act, and the Impugned Provisions.
70. Privacy over taxpayer information has been recognized by this Court and the Supreme Court of Canada as an important public interest under s. 241 of the ITA because it is a key tool to promote compliance in self-assessment tax systems: Slattery (Trustee oj) v. Slattery,  3 S.C.R. 430; Gernhart v. Canada,  2 F.C.R. 292 (F.C.A.).
71. ‘The Technical Interpretation evinces that pnvacy of taxpayer financial account information specifically is a public interest that animates the Canada-US Tax Treaty and, accordingly, therefore the Tax Treaty Act.
72. There can be no doubt that unless an injunction is granted to prevent imminent disclosure under the Intergovernmental Agreement, the public interest in privacy of taxpayer information will have been compromised. The question as to whether such compromise is lawful is the very question under appeal. In that sense, the status quo very much favours the granting of an injunction.
73. Furthermore, there is reason to believe that the specific public interest the Impugned Provisions purport to advance, enhanced taxpayer compliance, will not actually be achieved. Indeed, Martineau J.
explicitly recognized in paragraph 76 of his Reasons that in many quarters, the regime the FATCA regime is regarded as ineffective, as well as costly and unjust. The record before him amply supports the conclusion that such may well be the case.
74. It is to be recalled that both the Tax Treaty Act and the Impugned Provisions contain paramountcy clauses. If in fact the provisions of the two pieces of legislation cannot be reconciled in the manner that either the Appellants or Respondents advocate, and if the paramountcy clause in the Tax Treaty Act were to be found primary over the paramountcy clause in the Impugned Provisions, then failure to issue an injunction will have resulted in the will of Parliament to protect the public interest in privacy over taxpayer confidentiality as expressed in s.241 of the ITA, the Tax Treaty Act having been subverted.
75. On the other hand, if an injunction is granted, there will only be a delay while the appeal proceeds, and the Appellants submit that in that case the appeal should be expedited to minimize the delay. Further, it is apparent from the Notice that the IRS is aware that a number of jurisdictions may not be ready to exchange information by the original deadlines pursuant to their IGAs, and is for that reason treating 2014 and 2015 as “transition years” and granting certain countries extensions for the exchange of information. It is submitted that common sense would prevail, and the United States would refrain from taking any steps while its ally and treaty partner adheres to the rule of law.
—- Part of the Government’s response to our request for a stay:
1. The Appellants seek an injunction against the Crown in a non-constitutional case. This is something this Court has no jurisdiction to grant.
2. Having chosen to bring an application for a summary trial on certain issues, rather than an interlocutory injunction application, the Appellants now seek, on an urgent basis, to overcome the rejection by the Court of that application by enjoining the Respondents from complying with obligations in an international agreement. In doing so, the Appellants put ·at risk not only Canada’s relationship with the United . States, and the working relationship of the CRA and IRS, but also put Canadian financial institutions and their customers at risk of being held non-compliant with US legislation under which the consequences of non-compliance are severe. All of this when there is no evidence of any harm whatsoever to the Appellants. Even aside from the jurisdictional issue, in such circumstances no injunction should be granted…
A. The Appellants May Not Seek an Injunction Against the Crown
26. The Appellants seek an interlocutory interim injunction pending their appeal from the order of Martineau J. dismissing their motion for summary trial. The injunction sought would forbid the Minister of National Revenue from complying with his obligation pursuant to the Canada-United States Enhanced Tax Information Exchange Agreement Implementation Act (the ”IGA Implementation Act”) to send certain information to the IRS. This is a plain attempt to seek an injunction directly against a Crown servant and, by extension, against the Crown. Such relief is not available from this or any Court.
B. The Appellants do not Satisfy the Test for Injunctive Relief
37. Even if this Court had jurisdiction to grant the injunction requested by the Appellants, the Appellants have not met the burden upon them to establish they are entitled to such an injunction. As stated by this Court in Minister of Public Works and Government Services v Musqueam…: 21
The Appellants’ Have Not Established a Serious Issue on Appeal
38. None of the issues identified by the Appellants as the basis of their appeal rise to the level of meeting this test. The Appellants raise four alleged errors in the decision of
Martineau J…Justice Martineau’s construction of Article ::XXVIA was not unduly formalistic and narrow…
The Appellants will not suffer irreparable Harm
As discussed above, there is no taxpayer information concerning the Appellants in the batch of “slips” that have been collected by the Minister from financial institutions 22 RJR- MacDonald Inc. v. Canada (Attorney General),  1 S.C.R. 311,para 59. 15 pursuant to Part 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, 2015.23 44. As such, the Appellants have failed to establish that they would suffer any harm at all should the injunctive relief that they seek not be granted, let alone irreparable harm.
Reliance on speculative harm to third parties is insufficient
45. While the Appellants argue that other unknown non-parties’, in similar situations to the Appellants, will have their taxpayer information disclosed to the United States by the Minister on or before September 30, 2015, the applicable jurisprudence establishes that the Appellants may not rely upon any alleged harm that might flow from that disclosure to support their application for an injunction.
The Appeal will not be rendered moot by the Minister’s disclosure
54. The Appellants assert that they Will suffer irreparable harm if the injunction is not granted because their appeal will otherwise be rendered moot by the disclosure of taxpayer information by the Minister. This is not correct, firstly because no information concerning the Appellants is include in the information to be provided to the IRS by September 30,2015. 55. It bears noting, however, that even if the Appellants’ information was being disclosed this year, there would still be a “live controversy” between the parties since the IGA requires an annual disclosure of information by the Minister to the IRS…
Mootness alone does not constitute irreparable harm
56. Even if the Appellants were correct that the Minister’s compliance with his disclosure requirements under the IGA would render their appeal moot, this Court’s jurisprudence provides that mootness alone is not sufficient to constitute irreparable harm that justifies the granting of an injunction. 34 In fact, in cases where the alleged harm flows from the fact that information will be irrevocably disclosed prior to an appeal, it is still necessary for the party requesting the injunction to establish that the disclosure of the information itself will cause it irreparable harm.35 The Appellants have failed to do so in this case.
Compliance with the law cannot he regarded as irreparable harm
57. The consequences that the Appellants are ultimately seeking to avoid all flow from the potential application of US taxation legislation. As a general proposition, being required to comply with the law cannot constitute irreparable harm under the applicable legal test.36
Harm to Canada and Canadian Financial Institutions Favours Denying the Injunction
59. Both the Canadian Bankers Association and the Canadian Life and Health Insurance Association were supportive of the IGA as providing significant benefits to their members and customers compared to FAT CA. 38 I…
Lack of an Undertaking Weighs in Favour of Denying Injunction
63. If an injunction is granted, the Crown will be forced to breach an international agreement and Canadian financial institutions will be in non-compliance with FATCA. The consequences of that are significant. There will be immeasurable harm to international relations with the United States and the working relationship between the CRA and the IRS on a range of tax cooperation matters of mutual interest would suffer. Canadian financial institutions and their customers would suffer from uncertainty and may suffer significant financial impacts. The severity of those potential financial impacts is recognised by the Appellants in their evidence. 39 In fact, this is the reason they ask to be relieved of the obligation to provide an undertaking.
Public Interest Weighs in Favour of Denying Injunction
68. Where an applicant seeks to enjoin a public authority, as in this case, the public interest is a special factor which must be weighed in the balance of convenience. 42 Irreparable harm is presumed if the public authority is prevented from carrying out its functions.43
Delay Weighs in Favour of the Crown
71. The Appellants have been aware since they amended their statement of claim almost a year ago (subject to the submissions above regarding the ability to obtain an injunction against the Crown) of the possibility of applying for an interlocutory injunction. However,as pointed out by Martineau J. rather than proceed with the interlocutory injunction, the appellants chose to bring a summary trial application on a portion of the issues in the trial instead. Having been unsuccessful in that attempt, they now seek to bring an injunction application on an urgent basis. Given that the issues on an injunction application are different from those on the summary trial, the Respondents are prejudiced in not being able to properly consider the issues…
74. This Court does not have the jurisdiction to grant the remedy sought by the Appellants. Even if it did, in all the circumstances, the Appellants are not entitled to such a discretionary remedy and the application for an injunction pending appeal should be dismissed with costs to the Respondents.
—- Our response to Government response:
WRITTEN REPRESENTATIONS OF THE APPELLANTS,
VIRGINIA HILLIS and GWENDOLYN LOUISE DEEGAN
The Appellants do not Seek an Injunction Against the Crown
1. The Respondents mischaracterize the relief sought by the Appellants on this motion. The Appellants do not seek an injunction against the Crown; rather, as is set out in the Appellants’ Notice of Motion, the Appellants seek to enjoin the Minister of National Revenue and her delegates from disclosing taxpayer information to the United States pursuant to the Impugned Provisions pending judgment of the appeal in this matter. The Minister of National Revenue is a separate and distinct entity from the Crown.
2. Section 6 of Article III of the IGA specifies that the exchange of information obligations under Article II are the obligations of Canada’s and the United States’ respective Competent Authorities. In the case of Canada, the IGA defines its Competent Authority as “the Minister of National Revenue or the Minister of National Revenue’s authorized representative.”
3. The Crown has no direct disclosure obligations under the IGA. As such, the Appellants do not seek to and cannot enjoin the Crown from performing any obligations under the IGA. Section 22 of the Crown Liability and Proceedings Act does not apply on this motion.
The Appellants Simply Seek to Preserve the Value of Their Appeal
4. The Respondents take issue with the Appellants’ decision to seek interlocutory relief despite not having sought such relief at the Summary Trial Motion heard August 4 and 5, 2015.
5. The Appellants were hopeful that the relief they sought on the Summary Trial Motion would be granted. Had the Appellants been successful on the Summary Trial Motion, no interlocutory injunction application would have been required. Instead, presumably the Respondents would have been seeking a stay.
6. Given the unique nature of the present facts as set out in the Appellants’ Notice of Motion and Written Representations, unless an injunction is granted thevery question under appeal would be rendered moot. That is what the present motion is about: ensuring that the pending appeal has value in the sense that the very substance of the matter in dispute does not slip away before the Court can determine the Appellants’ appeal on the merits.
Prof. Allison Christians writes about the avenue for delay that the IRS opened up to Model I IGA countries, if the Harper govenment chose to take it;
“…Canada has a Model 1 IGA so it could delay furnishing information to the United States if it notifies the IRS before September 30, 2015 “and provides assurance that the jurisdiction is making good faith efforts to exchange the information as soon as possible.” There have been some efforts to compel the Canadian government to avail itself of this option (see, e.g., here and here), but I am not sure how to monitor the government’s response.
More to come as events unfold.”
Monday, September 28, 2015
‘Latest Update in Canada FATCA IGA litigation ‘
Professor Christians writes,
“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.”
Hence the overwhelming feeling that we’re fighting an uphill battle.
I just read arveys work and its beautiful
However this turns out adcs did well
Badger: I concur with FuriousAC … your comment is a tour de force! I particularly enjoyed: “There is NO cooperation in an extortionate interaction. Unless you consider that a victim cooperates with a robber and the robber ‘cooperates’ by not shooting the victim once they get their valuables.”
Actually, come to think of it, while the government and the banks aren’t going to get shot, it’s only because they’re hiding behind citizens and customers that they’ve placed in the front line to get shot at instead!
Anyway, kudos on your always cogent comments.
Sacrificial lambs offered up to the FATCA god in a hope of avoiding the FATCA god’s wrath, seemingly unaware of the FATCA god’s insatiable appetite for lamb.
Appeasement should never be confused with cooperation, yet our government seeks to convince us that having “no choice” is somehow cooperation on their part. What a farce.
The Affidavit of Sue Murray is particularly revealing!
My take on the exchange with Mr. O’Donnell , assuming the accuracy of the affidavit, is that Canada is particularly NOT ALLOWED an extension and if a stay is granted, then IRS will NOT reciprocate !
The exchanges between CRA and IRS seems to be that of King and subject. ( We will allow extensions to those who grovel and cry sufficiently to our taste. But for CANADA, NO! No matter how much grovelling you do. If we grant you an extension, EVERYBODY will want one ! We are not going to stop this until every last penny has been unearthed and confiscated, no probable cause needed.)
FIRST the 155,000. Next: YOU and everybody else on the planet. When we have finished with everybody we MIGHT allow a few crumbs or baubles to keep body and soul alive, but only so long as WE continue to fleece down to the bone!!)
They have NO intention of reciprocating! The banks in the US have already taken them to court. And they know they will NOT stand for the kind of reciprocation IRS expects of the world.
AND WHAT is the outcome of the Bopp trial and THAT effort on stopping this with an injunction?? That should be coming tomorrow??
Thanks @Muzzled no more, and @FuriousAC; I was so incensed and beside myself after emailing Weston’s letter on to some MPs.
Bravo brave @bubblebustin for obtaining (extracting? inspiring?) that response with persistence and determination!
Having trouble keeping up (only spotty access to time and computer). Trying not to miss anything or leave anyone out.
So heartened by NativeCanadian’s appearance at Con events. And by all the tweeters and Twitterers and all the IBS and ADCS people, and all those writing here.
And I cast my thoughts back to those who we haven’t heard from for a while. I wish them well.
And thank all of you for all your very hard work and dedication.
Glad to travel with you on this journey.
Again, think of how far this has come…..
Humbling and heartening.
@Embee, we should keep humming your wonderful ‘Harperman’ verses as we wait.
“Who attacks our charter rights?
Who ends up in courtroom fights?
The FATCA sellout travesty
Is now in court for all to see
Harperman, it’s time for you to go
Who invades our privacy?
Who plans this in secrecy?
Makes our banks follow U.S. law
I.D. theft is the tragic flaw
Harperman, it’s time for you to go”
Thanks Badger. I’m still kind of reeling from the recent losses. Part of me thinks everything we’ve done has come to nothing, but I know that’s not true. Even in loss there is much to be gained – I just can’t think of what that is right now.
The world’s changed in a moment – kind of like the Berlin Wall falling in reverse.
We assume that judges, due to their position, know the law.
Observation leads many of us to believe just the opposite.
Many judges, of course, specialize.
Unfortunately, today, it would appear, many are more than politically motivated or politically “coerced” .
One of the key phrases in the last 8 years in litigation in the US regarding the current occupant in the WH is based on the issue of ‘standing’.
So many cases have been tossed out on that one issue alone.
Saves the judge from having to actually rule on the merits. Almost always does one of two things:
Ends the effort or guarantees appeal. In other words, STALL.
This has worked beautifully for those whose political ambitions superseded Constitutional law and we have seen the results bear out and morph into the most unsustainable results imaginable. The list is long, but just to skim the surface and focus on IRS issues:
IRS targets political opponents. IRS exercises in ‘ asset forfeiture’ with abandon, and have expanded it to include ‘roadside asset forfeiture’ throughout the US. There is a reason the call for abolishing the IRS has risen and has reached strident proportions.
In the meantime:
When John Richardson says that both lawsuits need to articulate the issues facing US citizens abroad, I think he is right, for it is in the narrowest terms that will box in the debate and leave the jurists with no wiggle room whatsoever.
In addition, the articulation of the basest and most fundamental case is that NO citizen, US or otherwise who does NOT reside in the United States should be subject to ANY scrutiny of banking in their country of residence by the IRS or anybody else without probable cause!
For the IRS there needs to be a fundamental reason attached to tax filing. Blanket violation of privacy rights for a fishing expedition should NEVER be allowed and that it IS protected by the Constitution of both the United States AND the Charter of Rights in Canada.
Judges are particularly required to uphold the Constitution and the Charter of Rights.
Meaning they must know it and know how to apply it. WITHOUT political influence. Something I seriously question considering the rulings and their so called reasons so far.
As I recall it took 8 years to overturn McCain-Feingold!
IMO the most egregious comment from the Judge in Ohio:
“The FATCA statute,
the IGAs, and the FBAR requirements encourage compliance with tax laws, combat tax evasion,
Case: 3:15-cv-00250-TMR Doc #: 30 Filed: 09/29/15 Page: 36 of 37 PAGEID #: 417
and deter the use of foreign accounts to engage in criminal activity. A preliminary injunction
would harm these efforts and intrude upon the province of Congress and the President to determine
how best to achieve these policy goals. Thus, Plaintiffs’ Motion for Preliminary Injunction, ECF 8,
US persons living in foreign lands have local bank accounts, just as citizens living and resident in the US. They, therefore are NOT ‘US persons for taxpayer purposes’ and have no claim whatsoever on private information without probable cause that must be taken to a judge to issue a warrant.
And anyone who is connected with a ‘US designated person’ is subjected to the same scrutiny, without cause, or purpose other than to confiscate what does not belong to them.
The judge, of all people, should understand that IF there is a suspicion of criminal activity , then those seeking to investigate GET A WARRANT!!
And ” Intrude on the province of Congress and the President” ??
I certainly expect that an immediate appeal has been launched.
“During that call the issue of a possible injunction application in this case was raised with Mr. 0′ Donnell. There was general discussion ·of the impacts of such an injunction. Although no definitive answer was provided, it appeared that it would be very unlikely that the IRS would be willing to grant Canada an extension of time to provide information to the IRS in order to avoid an injunction application.”
Well I guess that means that the Canadian Court is powerless in Canada to make a Canadian Order that would be inconvenient for the dastardly Uncle Sam gang down south. Congress has spoken after all.