Jury awards B.C. man $1.3M for taxman's raid
By Louise Dickson, Victoria Times Columnist
February 11, 2009
VICTORIA — In a groundbreaking case, a B.C. Supreme Court jury has awarded a B.C. businessman $1.3 million in damages after finding a Canada Revenue Agency search violated his privacy.
The jury also recommended the government agency apologize to Hal Neumann of Saanich, B.C., for the September 2005 search of his home by five CRA agents and two armed and uniformed police officers for documents he had already given the government.
"This jury has told government agencies, 'Be careful,'" said Neumann's lawyer Steven Kelliher.
"It's earth-shattering," said Richard Neary, who was part of the legal team. "It's a landmark in law in terms of the recognition of the vital importance that the charter plays and the respect with which it needs to be upheld."
The jury found Neumann's right to privacy, which CRA employees infringed, was worth $1 million. The jury also found the CRA employees were negligent and damaged Neumann by breaching his rights to be free from unreasonable search and seizure under the Canadian Charter of Rights and Freedoms.
They awarded him $150,000 for pain, injury, suffering and loss of enjoyment of life, $100,000 for aggravated damages and $50,000 for loss of income.
The CRA is reviewing the B.C. Supreme Court decision and considering its next steps, media relations spokesman Noel Carisse said Wednesday from Ottawa.
Neumann, who was born in East Germany and escaped with his family to refugee camps in West Berlin, launched the civil suit because he felt bullied and terrorized in his own home. He has suffered from depression, paranoia and post-traumatic stress disorder ever since.
"Never in my wildest dreams would I have imagined this," Neumann said after the verdict. "I think this is a victory for ordinary folks in Canada who have been pushed around for far too long. I'm very grateful I had the opportunity to do that."
Last week, the jury heard Neumann was never the subject of a CRA investigation, but an innocent third party. In 2004, his business went through a successful audit.
During the audit, however, the CRA learned that Leah Bonnar, an Alberta woman with whom Neumann did business, had received commission cheques from him. She became the focus of a CRA tax-evasion investigation. Neumann gave the auditor his original documents concerning Bonnar.
Those documents, which were photocopied and returned to him, were the same ones later sought in the search warrant.
Neumann was at home on Sept. 7, 2005, when he saw the police cars. When he answered the door, a CRA investigator told him she had a warrant to search his home for records regarding the Bonnar investigation.
When Neumann asked her why the CRA was accompanied by police, the police officer said in most cases, everyone in the house is arrested.
"Does that mean you're going to arrest me?" asked Neumann. The officer did not reply.
Neumann complied with orders to pull out all the cash he had in the house, and took a computer expert upstairs to his office to download anything he wanted. The search lasted several hours.
University of Victoria law professor Rebecca Johnson said there have been very few awards in Canadian history for damages for breaches of charter rights. In 1998, a woman identified as Jane Doe was awarded $220,000 after suing the Toronto police for violating her constitutional right to equality and for breaching the duties they owed her as an identifiable target of a serial rapist.
The Neumann case is groundbreaking in ways that relate to search and seizure, said Johnson. This was an unreasonable and unnecessary search and the jury's decision reflects that.
"This is a very big fine against a powerful agency. It means the CRA will have to take very seriously the human dignity of the people whom they investigate," said Johnson.
"This would be completely upsetting for any ordinary citizen to have five agents and two police officers show up at their house and tell you they can arrest you. It would be absolutely traumatizing and it would shake your faith in our system of justice."