McNair,
J:—This
is
an
application
of
the
plaintiff
to
amend
his
statement
of
claim
by
deleting
several
paragraphs
therefrom
and
substituting
others
and
by
adding
a
new
paragraph.
The
statement
of
claim
was
filed
on
August
26,
1982
and
the
statement
of
defence
was
filed
on
July
30,
1982.
The
action
is
an
appeal
from
the
Minister’s
reassessment
of
taxable
capital
gain
for
the
1975
taxation
year.
It
is
unnecessary
to
elaborate
on
this.
The
issue
is
simply
whether
the
proposed
amendment
is
meritorious
within
the
meaning
of
Rule
420
and
the
law
generally.
On
December
11,
1975
the
plaintiff
conveyed
to
Eastern
Industries
Limited
ten
parcels
of
land
in
the
Mountain
Road
areas
near
Moncton,
New
Brunswick.
Six
of
these
parcels
were
owned
by
the
plaintiff
on
December
31,
1971
(V-Day).
Two
of
these,
namely,
parcels
5
and
6
were
inadvertently
omitted
from
the
description
in
the
deed
of
conveyance.
By
deed
dated
August
30,
1972
the
plaintiff
acquired
parcels
7,
8
and
9
and
by
deed
dated
October
17,
1972,
he
acquired,
inter
alia
parcel
10a.
These
four
after-acquired
parcels
were
included
in
the
deed
description.
Following
the
conveyance,
the
plaintiff
and
the
purchaser
filed
an
election
under
section
85
of
the
Income
Tax
Act.
In
filing
his
income
tax
return
for
1975,
the
plaintiff
proceeded
on
the
mistaken
assumption
that
all
of
the
parcels
conveyed
to
Eastern
Industries
Limited
on
December
11,
1975
had
been
owned
by
him
on
V-Day.
The
dispute
between
the
plaintiff
and
the
defendant
concerns
capital
gains
on
the
disposition
of
these
parcels.
One
of
the
purposes
of
the
amendment
is
to
enable
the
plaintiff
to
add
to
the
adjusted
cost
base
of
the
subject
properties,
the
costs
of
acquisition
of
the
four
post-V-Day
parcels
in
the
total
amount
of
$90,203.96.
Counsel
for
the
plaintiff
urges
that
the
only
purpose
of
the
amendment
is
to
enable
the
plaintiff
to
allege
all
of
the
relevant
facts
in
the
reassessment
appeal
and
that
it
is
not
a
calculated
stratagem
to
change
the
previous
election.
He
invokes
remedial
scope
of
Rule
420
and
cites
in
further
support
of
his
submissions
the
case
of
R
v
Hall,
[1958]
Ex
CR
110
and
the
estoppel
rule
enunciated
by
Mr
Justice
Mahoney
in
Midwest
Oil
Production
Ltd
v
The
Queen,
[1982]
CTC
107;
82
DTC
6092.
Counsel
for
the
defendant
relies
on
the
affidavit
of
Richard
A
Wetmore,
Chief
of
Appeals
for
the
Saint
Johns
District
Office
of
the
Department
of
National
Revenue,
filed
contra
to
the
motion.
The
affidavit
referred
to
the
section
85
election
at
an
agreed
amount
of
$668,700
in
respect
of
the
conveyance
of
the
subject
property
from
the
plaintiff
to
Eastern
Industries
Limited
in
1975
and
generally
sets
out
the
facts
and
circumstances
surrounding
the
Minister’s
reassessment,
the
taxpayer’s
notice
of
objection
and
the
appeal
from
the
reassessment.
The
affidavit
raises
no
specific
grounds
of
serious
prejudice
or
injustice
to
the
defendant
if
the
amendment
were
granted.
Instead,
the
implicit
objection
seems
to
be
that
no
amounts
were
included
in
the
section
85
election
for
the
properties
acquired
by
the
plaintiff
in
August
and
October
1972.
The
long
and
the
short
of
it
is
that
no
tax
was
assessed
against
these
after-acquired
properties
and
the
Minister’s
reassessment
must
necessarily
be
restricted
to
the
properties
which
were
the
subject
of
the
conveyance
to
Eastern
Industries
Limited.
Put
another
way,
it
is
said
that
properties
which
were
not
part
of
the
election
are
irrelevant.
Counsel
for
the
plaintiff
submits
in
reply
that
the
defendant
is
raising
the
spectre
of
the
section
85
election
as
a
“red
herring”
to
obscure
the
real
issue
in
the
action,
which
is
the
validity
of
the
Minister’s
assessment.
Rule
420
reads:
Rule
420.
(1)
The
Court
may,
on
such
terms,
if
any,
as
seem
just,
at
any
stage
of
an
action,
allow
a
party
to
amend
his
pleadings,
and
all
such
amendments
shall
be
made
as
may
be
necessary
for
the
purpose
of
determining
the
real
question
or
questions
in
controversy
between
the
parties
(2)
No
amendment
shall
be
allowed
under
this
Rule
(a)
except
upon
terms
designed
to
protect
all
parties
so
far
as
discovery
and
preparation
for
trial
are
concerned;
and
(b)
during
or
after
trial,
except
to
make
the
pleadings
accord
with
the
issues
on
which
all
parties
went
to
trial
or
on
terms
that
there
be
a
new
trial,
or
that
the
other
parties
otherwise
be
given
an
opportunity
for
such
discovery
and
preparation
for
trial
as
may
be
necessary
to
meet
the
new
or
amended
allegations.
The
scope
and
intendment
of
the
Rule
is
clearly
to
the
effect
that
any
pre-trial
amendment
shall
be
allowed
where
necessary
for
the
purpose
of
determining
the
real
question
in
controversy
between
the
parties,
but
upon
terms
designed
to
protect
the
parties
with
respect
to
discovery
and
preparation
for
trial.
Actually,
the
case
of
The
Queen
v
Hall,
supra,
refused
the
motion
to
amend
the
defence
on
the
ground
that
the
defendant
was
estopped
in
the
circumstances
of
the
case
from
denying
the
validity
of
the
expropriation
in
question,
although
it
did
refer
to
the
similarity
between
the
former
Exchequer
rules
and
their
corresponding
English
counterparts
and
the
general
principle
applicable
to
amendments.
The
principle
was
stated
many
years
ago
by
Lord
Esher,
MR,
in
Steward
v
North
Metropolitan
Tramways
Co
(1886),
16
QBD
556,
where
he
said:
The
rule
of
conduct
of
the
Court
in
such
a
case
is
that,
however
negligent
or
careless
may
have
been
the
first
omission,
and
however
late
the
proposed
amendment,
the
amendment
should
be
allowed,
if
it
can
be
made
without
injustice
to
the
other
side.
There
is
no
injustice
if
the
other
side
can
be
compensated
by
costs:
but,
if
the
amendment
will
put
them
into
such
a
position
that
they
must
be
injured,
it
ought
not
to
be
made.
The
defendant’s
argument
of
estoppel
is
squarely
met
and
refuted
by
the
principle
stated
by
Mr
Justice
Mahoney
in
Midwest
Oil
Production
Limited
v
The
Queen,
supra,
at
110
[6094-6095]:
I
do
not
think
that
a
taxpayer
can
be
estopped,
in
any
technical
sense
of
that
term,
from
raising
any
issue
it
wishes
in
an
appeal
to
this
Court
under
subsection
172(2)
of
the
Act
only
because
the
issue
was
not
raised
in
its
notice
of
objection
or,
if
applicable,
before
the
Tax
Review
Board.
It
is
to
be
emphasized
that
it
is
the
Minister’s
assessment
not
his
reasons
for
it
that
is
the
subject
matter
of
the
appeal
.
.
.
The
plaintiffs
appeal
questions
the
validity
of
the
Minister’s
assessment.
Its
purpose
is
to
raise
issues
relevant
to
the
plaintiffs
case.
There
is
nothing
to
indicate
that
the
amendment
could
cause
serious
prejudice
or
injury
to
the
other
side.
Any
inconvenience
occasioned
thereby
can
be
compensated
by
costs.
The
plaintiff
is
not
estopped
in
any
way
from
seeking
the
amendment.
In
my
opinion,
the
amendment
is
necessary
for
the
purpose
of
determining
the
real
questions
in
controversy
between
the
parties.
Accordingly,
an
order
will
go
granting
the
amendment
on
terms.
ORDER
I.
The
plaintiff
shall
be
at
liberty
to
amend
his
statement
of
claim
in
the
manner
following
viz:
(a)
By
deleting
paragraph
2
thereof
and
by
substituting
therefor
the
following:
2.
In
the
taxation
year
1975,
the
Plaintiff
conveyed
ownership
of
a
number
of
parcels
of
property
consisting
of
land,
buildings
and
other
improvements
in
the
vicinity
of
Mountain
Road
and
Killam
Drive,
Moncton,
NB
(hereinafter
called
“the
property’’)
to
Eastern
Industries
Ltd,
a
duly
incorporated
company
(hereinafter
called
“the
purchaser’’).
(b)
By
deleting
paragraph
5
thereof
and
by
substituting
therefor
the
following:
5.
Six
of
the
parcels
comprising
the
property
were
owned
by
the
Plaintiff
on
December
31,
1971
and
thereafter
without
interruption
until
the
conveyance
of
the
property
in
1975
to
the
purchaser.
Four
of
the
parcels
comprising
the
property
were
acquired
by
the
plaintiff
after
1971
and
were
owned
by
the
plaintiff
thereafter
without
interruption
until
the
conveyance
of
the
property
in
1975
to
the
purchaser.
(c)
By
adding
thereto
paragraph
5A
as
follows:
SA.
The
plaintiffs
adjusted
cost
base
of
the
property
for
the
purposes
of
calculating
the
gain
or
loss
thereon
in
1975
1s:
1.
The
adjusted
cost
base
of
the
said
six
parcels
owned
by
the
plaintiff
on
December
31,
1971
determined
in
accordance
with
the
applicable
provisions
of
the
Income
Tax
Application
Rules,
1971;
plus,
2.
The
actual
cost
to
the
Plaintiff
of
the
said
four
parcels
acquired
by
the
plaintiff
after
1971.
The
said
adjusted
cost
base
has
been
determined
by
the
plaintiff
to
exceed
the
sum
of
$668,700.
(d)
By
deleting
subparagraph
8(a)
thereof
and
by
substituting
therefor
the
following:
(a)
An
order
that
the
adjusted
cost
base
of
the
property
determined
as
set
out
in
paragraph
5A
above
was
not
less
than
$668,700.
and
to
file
and
serve
the
same
accordingly.
The
defendant
shall
have
30
days
from
the
service
of
the
amended
statement
of
claim
to
file
and
serve
an
amended
defence
thereto,
but
reserving
to
both
parties
all
rights
of
further
discovery
and
inspection
of
documents
and
examination
for
discovery
as
may
be
necessary
by
reason
of
the
amended
pleadings
aforesaid.
The
costs
of
and
occasioned
by
this
application
and
of
any
amendments
to
pleadings
consequential
thereon
shall
be
the
defendant’s
in
any
event.
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