Mahoney,
J:—The
plaintiff,
a
chartered
accountant,
was
an
equal
partner
with
another
chartered
accountant
in
the
practice
of
their
profession
in
Edmonton,
Alberta
from
December
1,
1966
until
some
time
after
the
end
of
the
partnership’s
fiscal
year
on
May
31,
1969.
In
filing
his
1970
personal
tax
return,
he
reported
income
from
the
partnership
on
the
basis
that
it
had
continued,
on
a
50/50
basis,
beyond
May
31,
1969.
He
was
assessed
on
the
basis
of
his
representations
which
were
substantiated
by
the
records
of
the
partnership,
In
fact,
in
July
1969
the
plaintiff
and
his
partner
had
agreed
to
terminate
their
association
effective
as
of
May
31,
1969.
The
financial
settlement
was
predicated
on
the
fiction
that
no
partnership
had
ever
existed
but
that
they
had
merely
shared
office
and
other
facilities,
billed
their
own
clients
direct,
paid
the
direct
costs
of
servicing
them
and
shared
the
office
overhead
equally.
The
process
giving
effect
to
the
termination
agreement
was
not
friendly.
Solicitors
were
eventually
involved.
The
plaintiff
and
his
ex-partner
were
still
disputing
details
of
the
settlement
in
April
1973.
The
matter
was
concluded
some
time
before
May
15,
1974,
when
a
mutual
release
was
executed.
In
the
result,
the
plaintiff
was
allocated
no
income
from
the
partnership
after
May
31,
1969.
The
adjustments
in
the
partnership
accounts
to
reflect
the
termination
agreement
result
in
a
reallocation
of
income
to
the
plaintiff
and
his
ex-partner
as
far
back
as
their
1967
tax
years.
The
termination
agreement
did
not
reduce
the
total
income
of
the
partnership,
it
merely
reallocated
it.
To
the
extent
that
the
plaintiff’s
income
from
the
partnership
after
May
31,
1969
was
reduced,
either
his
ex-partner’s
income
or
his
own
income
for
one
or
more
prior
periods
was
increased.
The
increase
cannot
be
taxed
to
them
for
the
years
to
which
it
was
allocated
because
such
reassessments
are
statute-barred.
This
is
a
text
book
example
of
estoppel
by
representation.
The
plaintiff
having
represented
that
the
partnership
income
was
distributed
in
a
certain
way,
the
Minister
of
National
Revenue
having
acted
on
that
representation
and,
by
so
doing,
now
finding
himself
statute-barred
from
taxing
the
partnership
income
as
the
plaintiff
now
says
it
was
distributed,
the
plaintiff
cannot
deny
the
truth
of
his
original
representations.
The
appeal
is
dismissed
with
costs.
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