Citation: 2007TCC715
Date: 20071128
Docket: 2004-691(IT)G
BETWEEN:
HIGHWAY CUSTOMS WAREHOUSE LTD.,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR ORDER
Bowie J.
[1] The appellant brings this motion, relying on subsection
172(1) of the Tax Court of Canada Rules (General Procedure) (the “Rules”),
asking that I amend the consent Judgment that I signed in this matter on
February 3, 2006. The respondent consents to the motion being granted. The
operative part of the judgment reads as follows:
The appeals from the assessments made under the Income Tax Act
for the 1995, 1996 and 1997 taxation years are allowed, without costs, and the
assessments are referred back to the Minister of National Revenue for
reconsideration and reassessment in accordance with the terms of the Consent to
Judgment.
The
operative part of the consent referred to in the judgment reads:
1. Payments to William A. Glendenning in the amount of
$15,364.00 in 1995, $11,317.00 in 1996 and $15,538.00 in 1997 be substituted
for the “Payments to William A. Glendenning in the amount of $11,100.00 in each
of the 1995, 1996 and 1997 taxation years”; and
2. Payments to William l. Alvey in the amounts of $13,627.00 in
1995, $14,808.00 in 1996 and $16,329.00 in 1997 be substituted for the
“Payments to William L. Alvey in the amounts of $9,831.00 in 1995, $10,736.00
in 1996 and $11,550.00 in 1997 are deductible”.
The
consent was signed by counsel for each party, each of them being authorized to
do so.
[2] Almost a year later, in
January 2007, this motion was brought, supported by an affidavit made by
counsel for the appellant (not counsel on this motion). The grounds for the
motion are expressed this way in the Notice of Motion:
… the amounts
set forth in the Consent to Judgment, January 19, 2006, were incorrectly
expressed in Canadian funds rather than in American funds. Accordingly, this
application is made pursuant to rule 172(1) of the Tax Court of Canada rules.
The
affidavit in support of the motion explains the reasons for it, and the basis
of the computation of the amounts that the parties now say should be
substituted for those in the original consent, in paragraphs 3 and 4:
3.
With respect to the pension payments paid to Andrew Haak and W. Gordon
Glendenning, the Consent To Judgment expressed the amounts to be allowed in U.S.
funds rather than Canadian funds with the result that the amounts to be allowed
to the Appellant are understated due to the failure to convert the amounts from
U.S. dollars to Canadian dollars. As a result of the error in the Consent To
Judgment filed with the Court, the resulting Order and Judgment of the Court
also understated the amounts of pension payments to be permitted as deductions
to the Appellant. …
4. Subsequent to the filing of the Consent To Judgment and the
issuing of the Order, the parties became aware that the error in calculation
had occurred. ...
Attached
to that affidavit is the consent of counsel for the respondent to the
amendment. Both parties urged me to issue an amended judgment incorporating the
revised amounts that they now say are the correct amounts that the appellant is
entitled to deduct in computing its income for each of the three years in
question. I expressed some doubt about my jurisdiction to do so, it
seeming to me that the Court is now functus officio in respect of these three
appeals. I requested that the parties file written submissions addressing the
issue, and they have now done that.
[3] Finality
in litigation, and certainty as to the result, are not just desirable: they are
essential to the integrity of and the public’s confidence in the judicial
system. It is axiomatic that once a court has pronounced its formal judgment,
the parties and the public must be assured that the court will not later
substitute a different judgment for the one first pronounced. That said, it is
equally obvious that certain limited exceptions to this important rule must be
permitted. Judgments obtained by fraud are an obvious example. Within very
closely defined limits, another exception is made where new and different
evidence becomes available for the first time after the judgment has been
entered. The exception with which I am concerned here is the slip rule. It is
found in the Rules of this Court in two places – section 168 and section
172 – in somewhat different form.
168 Where
the Court has pronounced a judgment disposing of an appeal any party may within
ten days after that party has knowledge of the judgment, move the Court to
reconsider the terms of the judgment on the grounds only,
(a) that the judgment does not
accord with the reasons for judgment, if any, or
(b) that some matter that should
have been dealt with in the judgment has been overlooked or accidentally
omitted.
…
172(1) A judgment that,
(a) contains an error arising from
an accidental slip or omission, or
(b) requires amendment in any
matter on which the Court did not adjudicate,
may be amended by the Court on application or of
its own motion.
172(2) A
party who seeks to,
(a) have a judgment set aside or
varied on the ground of fraud or of facts arising or discovered after it was
made,
(b) suspend the operation of a
judgment, or
(c) obtain other relief than that
originally directed,
may make a motion for the relief claimed.
The
appellant in the present case relies on paragraph 172(1)(a), and argues
that the judgment signed in February 2006, adopting by reference as it did the
consent signed by the parties, contained “… an error arising from an accidental
slip…”. The position of both counsel, as I understand it from their written
submissions, is that an error of counsel, when it is acted upon by the Court,
becomes the error of the Court, and hence may be corrected by the Court under
this rule.
[4] Counsel for the
Appellant also argues that Federal Courts Rule 397 is available
to correct the Appellant’s mistake. It reads:
397(1) Within 10 days after the making of an
order, or within such other time as the Court may allow, a party may serve and
file a notice of motion to request that the Court, as constituted at the time
the order was made, reconsider its terms on the ground that
(a) the order does not accord with
any reasons given for it; or
(b) a matter that should have been
dealt with has been overlooked or accidentally omitted.
397(2) Clerical mistakes, errors or omissions
in an order may at any time be corrected by the Court.
This
Rule, by section 1, is made to apply to the Federal Court and the
Federal Court of Appeal, and the word Court therein, by section 2, is defined
to mean only those two Courts. In any event section 397, if it did somehow
apply to this Court, would add nothing to what can be found in this Court’s own
Rules.
[5] Counsel have referred
me to a number of authorities that are said to support this application, but I
have found none among them that support the proposition that the slip rule may
be invoked to correct a judgment that is said to be wrong as the result of an
error of counsel, with the possible exception of Yost v. Administrator under
Anti-Inflation Act.
[6] Bujnowski v. Canada is cited by
the Appellant to support the motion, on the basis that the trial Judge had
amended his judgment to correct an error arising out of an incorrect concession
regarding the amount of a refund that had been received by the appellant in
that case. However, an examination of the reasons of the trial judge makes it
clear that the slip that was corrected in that case was not that of counsel,
but of the judge alone. Counsel had made a concession at trial in respect of
$12,426.79, the net amount of the appellant’s foreign tax paid, after taking a
refund into account. The judge erroneously stated in his judgment that the
appellant was entitled to a foreign tax credit of $14,787.28 which was the
gross foreign tax before the refund was taken into account. The amending
judgment was issued to take the refunded amount into account. It is precisely
this type of error for which the slip rule was created.
[7] In C.I.T.
Financial Ltd. v. Canada,
Bowman A.C.J., as he then was, dismissed a motion brought under Rule 172 to
reconsider his earlier judgment in the case. In doing so, he said at paragraph
4:
I do not think
that the correction that counsel for the appellant asks that I make to my
reasons falls within either section 168 or subsection 172(1) of the Rules. The
judgment accords with the reasons and I have not overlooked or accidentally
omitted something that should have been dealt with. There is no error or
accidental slip or omission within the meaning of section 171 of the Rules. I
rendered the judgment that I intended to. I am, in my view, functus officio.
[8] The same conclusion
was reached by President Jackett of the Exchequer Court in an appeal from the
Tax Appeal Board in M.N.R. v. Gunnar Mining Ltd. In that case a member of
the Board heard an appeal involving a claim that two separate amounts of income
were exempt from tax. Counsel had previously agreed, and informed the Board
member, that if the appeal failed on those grounds then it should nevertheless
be allowed in order to permit the appellant greater deductions for capital cost
allowance and deferred exploration expenses. The presiding member heard the
appeal, dismissed it on the merits, and entered judgment to that effect, having
overlooked the prior agreement of the parties. After an appeal from that
judgment had failed, the taxpayer applied by motion to the member of the Board
to amend his judgment to permit the additional CCA and deferred exploration
expenses. That motion was allowed, and the judgment amended. The Minister’s
appeal from the amended judgment was allowed by Jackett, P., who gave detailed
reasons considering the origins and the permissible scope of the slip rule, and
concluded that it did not permit a court to change its decision after it had
been rendered, subject only to two exceptions: where there has been a slip in
drawing up the judgment, and where the judgment does not properly express the
manifest intention of the court.
[9] Counsel for the
respondent brought the Yost
case to my attention. In that case, the Federal Court of Appeal heard an
application for judicial review of a decision made by the Administrator under
the Anti-Inflation Act. In its original decision the Court upheld the
Administrator’s decision in part, but set aside the monetary part of his Order
on the basis that he had no jurisdiction to make it. The Court reached that
conclusion based upon a text of the Act furnished to it by counsel that
pre-dated an amendment that gave the Administrator the jurisdiction to make the
monetary part of his Order. Upon a motion brought under paragraph 337(5)(b)
the Court was made aware of the revised text of the Act for the first
time, and it issued amended reasons by which it ordered about half of its
earlier reasons “stricken out”,
and a new version dismissing the judicial review application in its entirety
substituted for that which had been struck out. This is precisely what Jackett,
P., on the basis of the English common law authorities and the Paper
Machinery
case, had held in Gunnar Mining that a court had no power to do.
Considering that the Court in Yost offered no rationale for its decision
to amend the earlier judgment, and made no mention of Gunnar Mining, Paper
Machinery or any of the English authorities cited in those cases, and
considering, too, that it is not referred to in the more recent decisions of
the Federal Court of Appeal, I conclude that Yost should be considered
to have been decided per incuriam.
[10] The same issue came
before the Federal Court of Appeal again in Boateng v. Minister of
Employment and Immigration.
Boateng moved under subsection 337(5) of the Federal Court Rules to have the Court
reconsider its earlier judgment dismissing his judicial review application on
the grounds that material had been omitted from his earlier application that
should have been included in it. Mahoney, J., sitting alone, dismissed the
application, saying:
In my opinion,
the failure of a party to include available material does not give rise to
jurisdiction to reconsider a decision finally disposing of a matter. That rule
contemplates oversight on the part of the court, not a party …
These
rules have their origins in the Paper Machinery case and in the
English jurisprudence, much of which was referred to by Jackett, P. in Gunnar
Mining. In Dupont Canada Inc. v. Canada, the Federal Court of
Appeal said of subsection 397(1) that it
… permits the
correction of certain mistakes made by the Court but is not intended to relieve
against a mistake by counsel in failing to bring a matter to the Court’s
attention.
[11] Of the other cases
referred to by the appellant in its memorandum, Tigney Technology Inc. v.
Canada
is the only one in which this Court applied the slip rule to amend a judgment.
While it is not entirely clear from the reasons, it appears that in that case
the mistake corrected was that of the judge and not counsel. In Malowitz v.
Canada, Brulé J. set aside a judgment that had been issued ex parte.
Counsel for the appellant, due to an error that took place in his office, had
failed to appear when the case was called. Brulé J. was careful to state,
however, that he was not applying the slip rule as “[t]here was no slip in this
case”.
[12] In summary, then, the
jurisprudence in this Court, in the Exchequer Court, in the Federal Court, and in
the Federal Court of Appeal, as well as in England, establishes that the
availability of the slip rule is limited to those cases in which the Court, not
one or both of the parties, has made an accidental mistake or omission, or has
given a judgment that manifestly does not accord with the reasons given. This
is not such a case. The Court is functus officio in respect of these
appeals. The respondent has consented to the amendment sought, and filed a
brief in support of the motion. It is trite, however, that consent cannot
confer jurisdiction: see Canadian Pacific Railway Company v. Fleming.
[13] While the result in
this case does not depend on it, the affidavit in support of the motion before
me is illustrative of why the Court ought not to amend its judgment in a case
of this sort. The error giving rise to the motion was the failure of counsel to
express the deductions from income, which were paid in U.S. currency,
in Canadian currency in the consent to judgment. Exhibit “C” to the affidavit
in support of this motion is a table showing the conversion of the amounts that
counsel now wishes to substitute. It is obvious from a review of that table
that two rates have been used to make the calculations for the two amounts paid
in 1996. These are 1.00 USD = 1.37926 CAD and 1.00 USD = 1.01955 CAD. The
second of these is obviously not correct. I can only assume that if I were to
amend the judgment in the terms requested by this motion there would be yet
another motion to amend when this error came to the attention of counsel.
[14] For all the foregoing
reasons, the motion is dismissed. The parties will each bear their own costs of
the motion.
Signed at Ottawa, Canada, this 28th
day of November, 2007.
“E.A.Bowie”
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