The judge overseeing a Vancouver tax court case involving accounting giant KPMG attended an exclusive party in Europe sponsored by the law firm alleged to have signed off on the accounting firm's offshore tax "sham," a fifth estate/Enquête investigation has found.
Justice Randall Bocock, who was in Madrid at an international tax conference last fall, is seen on CBC cameras arriving at the private "cocktail reception" hosted by Dentons, a law firm with offices in Canada and around the world.
Documents filed in the Tax Court of Canada in Vancouver state that Dentons — at the time known as Fraser Milner Casgrain — provided "written opinions" as part of the approval process before the KPMG scheme was implemented in 1999.
In court filings, the Canada Revenue Agency has alleged that the Isle of Man scheme was a "sham" that "intended to deceive" the federal treasury.
Bocock is currently the case management judge in the Vancouver tax court case and will likely not be the judge presiding over the actual trial. No trial date has been set.
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The Dentons invitation, posted on its website, described the private soiree on a terrace off Plaza Santa Ana on Sept. 28, 2016, as a "great opportunity to meet colleagues" attending the conference.
In its invitation, Dentons advertised "The Roof" bar as "one of Madrid's most exclusive terraces, providing spectacular panoramic views of the city and exquisite haute cuisine."
Marwah Rizqy, a tax professor at Sherbrooke University, says Bocock's attendance at the party raises red flags.
"You cannot attend a private party where you are acting as a judge on the bench. You can't," she told the fifth estate's Gillian Findlay.
"There is an appearance of a conflict of interest. Even though you probably did not discuss about the case, it's just the fact that there's an appearance of a conflict of interest. And you have to avoid that as a judge."
In an email to the fifth estate, the tax court's chief justice, Eugene Rossiter, said the party was open to all the attendees of the conference.
"I am satisfied that Justice Bocock did not place himself in a conflict of interest by briefly attending a reception that was open to all participants of an international tax conference."
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KPMG 'diamond' sponsor
Bocock had travelled to Madrid last September for the international tax industry's yearly gathering of close to 2,000 accountants, lawyers and government regulators from around the world.
KPMG was a top "diamond" sponsor of the International Fiscal Association's annual conference, which included tax seminars by day and a series of "cultural" events and parties by night.
In its advertising to delegates, the six-day conference promised "an abundance of leisure activities" and "social events" that would offer a variety "networking opportunities."
KPMG, along with tax accounting firm PwC, paid $92,000 Cdn (65,000 euros) each to be the conference's top sponsors, according to conference documents.
The sponsorship money, together with fees of $2,405 Cdn (1,694 euros) from each of the 1,900 delegates, paid for evening social events at the Prado Museum, a disco party and a "cultural night" at the Plaza de Toros. That event featured Spanish cuisine, flamenco dancing and cocktails.
The Dentons event was paid for entirely by the law firm and was not part of the official KPMG-sponsored conference. It was organized by the "marketing and business development" manager from the firm's Canadian office.
'We will have wine and lots of it'
At a recent tax conference in Calgary, Rossiter defended the practice of judges on his tax court drinking alcohol at evening social events with tax industry officials.
Speaking before hundreds of tax accountants and lawyers at the Canadian Tax Foundation's annual meeting in November, Rossiter said judges do not lead a "monastic" life and that they have a responsibility to "interact" with the public.
"We will have pizza and we will have wine and lots of it," Rossiter said. After those words, a conference organizer immediately tweeted the chief justice received "massive" applause from the tax industry audience.
Tax professor Rizqy says that as chief justice, Rossiter needs to set an example for the other judges on his 25-member tax court.
"He doesn't deserve a round of applause, first of all, for that comment," she says. "It's not appropriate to say: 'I will drink lots of wine.' This is probably not what we expect to hear from a judge."
Rizqy says judges must follow a code of conduct to "minimize" even the appearance of a conflict of interest.
"A judge has to act in a reserved manner, on the bench and also outside the court."
Judge initially denied attending Prado event
CBC footage also shows Federal Court of Appeal Judge Denis Pelletier attending the KPMG-sponsored conference, as well as attending a "business attire" evening social event at the Prado Museum, described by organizers as the "crown jewel" of Madrid's most "elegant" boulevard.
Still, the Federal Court of Appeal, which hears appeals from the Tax Court of Canada, denied in an email that Pelletier went to any of the conference's social events, including the Prado evening.
"Justice Pelletier did not attend any of the events/dinners/receptions/parties mentioned in your email while he was in Madrid," the court wrote.
The court told the fifth estate that one of the reasons Pelletier didn't attend the evening events was because his wife was not feeling well.
When informed that the fifth estate had footage of the judge and his wife leaving the Prado Museum with gift bags, the court then said it had all been an office "miscommunication."
Pelletier, they agreed, did attend the Prado Museum social event, as well as the "cultural evening" at the Plaza de Toros.
The Canadian Judicial Council, the regulatory body for federally appointed judges, says it approved judicial travel to the Madrid conference for educational reasons.
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