At the Court: Jury Vetting Disclosure and Tax Shelters

Jury on Trial

Ibrahim Yumnu, convicted of first degree murder with two others in December 2005, will have one last opportunity to appeal his conviction of life sentence to the Supreme Court on March 14. The Court will decide whether there should be a new trial. Yumnu and the two others failed to have the Ontario Court of Appeal overturn the decision.

The Appellants, Mr. Duong and Mr. Cardoso, were convicted of being parties to the hired hit on Dung Ton and his wife. The Crown alleges that Duong wanted Ton, his partner in a large scale marijuana business, dead for financial reasons. Duong and his girlfriend contacted the Appellant, an acquaintance, to assist in killing Ton. Ton and his girlfriend were lured to a remote location north of Barrie on May 24, 2002 under the pretext that they were going to Casino Rama with Dang. They shot and killed Ton and then beat his girlfriend to death with a rock.

This appeal is based on the fact that a Crown prosecutor in Barrie acted contrary to section 20 of the Juries Act, RSO 1990, c J.3, which prohibits the disclosure of the lists to anyone until ten days before the commencement of trial. Jury panel lists were provided by the staff 42 days prior to the commencement of the Appellant’s trial. The Crown also pursued these background checks on potential jury members without disclosing this information to the defence lawyers.

In 2010 ONCA 637, the Court of Appeal ruled that, given the comments made by the Crown and judge in court, they should have known about the screening process. The court questioned the legitimacy of the claim since they have brought this action years later. The Appeal court further found that despite the necessity in the crown’s obligation to disclose this information to the defence, “the failure to do so did not taint the fairness of the trial or impede the right to make fair answer and defence.”

Yumnu’s counsel contests that they are bringing this case forward after the conclusion of R v Bradey, an unreported Barrie case from 2009 in which the mental health background of one of the 12 jurors was known to the crown. It became known that jury vetting had been practiced by the Crown’s office in Barrie “for years,” questioning the legitimacy of their criminal justice system. That event motivated a province-wide investigation by Ontario’s Information Privacy Commissioner.

The court will decide whether ONCA erred in concluding that the non-disclosure of jury vetting conducted by the police and the crown prior to the selection of the jury did not affect the overall fairness of the trial process and, even if it did not, whether it affected the appearance of fairness. Where fairness is so integral to the judicial process that the courts have found the mere perception of it can lead to questioning a ruling, the court has the ability to question the impact of fairness the Juries Act has in a proceeding.

Shelter Under Fire?

On March 13, the Supreme Court will hear two cases against St. Michael Trust Corp. in its capacity as trustee for the Fundy Settlement and for the Summersby Settlement. The company provides trust administration services in Barbados for international clients looking to benefit from the country’s low taxes and tax treaty network. Trusts are often used to avoid paying taxes on capital gains elsewhere.

Although the facts differ slightly, the two cases are largely concerned with whether tax remitted to the Canadian government should be returned pursuant to the tax treaty, the Agreement Between Canada and Barbados for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income and Capital. The agreement is designed to make tax payable only in the country in which the resident resides, regardless of where capital gains would potentially be made. Barbados does not tax capital gains, making it a haven for corporations operating businesses elsewhere.

The Trust sold shares it owned in a Canadian corporation on behalf of corporation residents in Barbados. So far, the Tax Court and Federal Court of Appeal have dismissed appeals made by the two trustees on behalf of the Trust, who argue that the tax exemptions are valid under the agreement, and that the Trust is not a resident of Canada.

Although the Trust is a registered corporation in Barbados, the courts have found that its operations in Canada make it a resident here. The Supreme Court now has the opportunity to refine the way in which Canadian companies make use of trustees in countries known to be tax havens.