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Docket: 2005-2502(IT)G
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BETWEEN:
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HER MAJESTY THE QUEEN,
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Applicant (Respondent),
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and
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HONEYWELL LIMITED,
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Respondent (Appellant).
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____________________________________________________________________
Motion heard on May 31, 2006 at Toronto, Ontario.
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Before: The
Honourable D.G.H. Bowman, Chief Justice
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Appearances:
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Counsel for the
Appellant:
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Al Meghji
Martha MacDonald
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Counsel for the
Respondent:
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Luther P. Chambers,
Q.C.
Pascal Tétrault
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____________________________________________________________________
AMENDED ORDER
Upon motion made by counsel for the respondent for an
Order to amend the Reply to the Notice of Appeal and for an Order vacating the
Order of the Court dated March 17, 2006 and directing the parties to
contact the Court within 30 days of the final Order concerning the issues
raised in the motion for the purpose of setting a new timetable for the further
litigation of the appeal under subsection 152(9) of the Income Tax Act;
And upon reading the Affidavits of Gordon Parr and
Marilyn Bartolome‑White, filed;
.../2
And
upon consideration of the oral and written submissions of counsel for the
parties;
And upon consideration of
the written submissions of counsel for the parties upon the request by counsel
for the respondent for a reconsideration of the Order of the Court dated
June 22, 2006;
It is ordered that the respondent be allowed to make the
amendments sought to the extent set out in the Reasons for Order and in the
Supplemental Reasons for Order and that the Order of this court dated
March 17, 2006, setting a timetable for the further steps in the appeal be
vacated and the parties are directed to communicate with the court within 30
days of the final disposition of this motion to set a new timetable.
Costs will be in the cause.
Signed at Ottawa, Canada, this 26th day of September
2006.
Bowman,
C.J.
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Citation: 2006TCC327
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Date: 20060926
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Docket: 2005-2502(IT)G
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BETWEEN:
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HER MAJESTY THE QUEEN,
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Applicant (Respondent),
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and
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HONEYWELL LIMITED,
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Respondent (Appellant).
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SUPPLEMENTAL REASONS FOR ORDER
Bowman,
C.J.
[1] In
this motion the Crown seeks reconsideration by the court of an Order dated June
22, 2006, by adjudicating on certain amendments to the Reply to the Notice of
Appeal sought by the respondent.
[2] The
motion was heard on May 31, 2006 and the Order disposing of that motion
was signed on June 22, 2006. It ordered that the respondent be allowed to
make the amendments sought to the extent set out in the Reasons for Order.
[3] I
did not deal with a number of the amendments sought by the respondent. The
failure to do so was inadvertent. This is in my view plainly a case for the
application of the slip rule. Rule 168 of the Tax Court of Canada Rules (General
Procedure) permits the Court to correct a judgment (which includes an
order) in respect of any matters that should have been dealt with that had been
overlooked or accidentally omitted. I do not think that the fact that the
parties have appealed and cross‑appealed from the order to the Federal
Court of Appeal prevents the court from dealing with the items that were
omitted.
[4] The
main question with which the reasons dealt was whether, having obtained from
the taxpayer a waiver of the statutory time limit for assessing on the basis
that such reassessment would be based on the General Anti-Avoidance Rule (“GAAR”)
and having assessed in accordance with the waiver on that basis, the Crown is
entitled to put forward an entirely new basis to justify the assessment (the Foreign
Accrual Property Income (“FAPI”) rules.) I held that the Crown was not entitled
to do so.
[5] I
did, however, permit amendments to certain of the paragraphs of the Reply. I
shall list the paragraphs of the draft amended Reply to which amendments were
sought or which the respondent sought to add, and the disposition I made of
them.
5 amendment allowed
8 amendment allowed
8A amendment allowed
13(d)(iii)
13(f)
13(g)(i) amendment allowed
(ii) amendment allowed
(iii) amendment allowed
(iv) amendment allowed
13(h)(iii)
13(i)
13(k) amendment allowed
13A amendment allowed
15 amendment allowed
16
17 amendment allowed
18
18A amendment not allowed
21A amendment not allowed
21B amendment not allowed
21C amendment not allowed
21D amendment not allowed
21E amendment allowed
22A amendment allowed
23(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
24
25
26
27
30
33A
33B
34A
[6] Counsel
for the respondent points out that I did not deal with the amendments sought to
paragraphs 13(d), 13(f), 13(h), 13(i), 16, 18, 23, 24, 25, 26, 27, 28, 29, 30,
31, 33, 33A, 33B and 34A. He is quite right, I did not and I should have. I sincerely
regret any inconvenience that this may have caused the parties.
[7] Counsel
has also pointed out that the appellant consented to a number of amendments.
[8] I
shall begin by dealing with the amendments to which counsel does not object.
The order will be varied to permit the respondent to make the following
amendments to the Reply in addition to those permitted in the original order.
Paragraphs 13(f), 13(i), 16, 23(b), 23(c), 23(d), the reference to clause 95(2)(a)(ii)B
in paragraphs 23(e), 23(h) and the references to the Income Tax Regulations
and the Canada Netherlands Income Tax Convention.
[9] In
addition, while counsel for the appellant opposes certain other amendments, he
nonetheless agrees that it is consistent with the Order and Reasons for Order
that paragraph 23(e) of the draft amended Reply be amended to permit a
reference to subsection 91(1) and paragraph 95(1)(b) of the Income
Tax Act, and the reference to subsection 95(1) in paragraph 24 of the
draft amended Reply. These amendments should be permitted.
[10] I believe as well that the proposed amendments in paragraphs 18, 25,
26, 30 and 33, in the draft amended Reply are consistent with my Order and Reasons
for Order.
[11] Counsel for the appellant consents to the amendment at
paragraph 18 and, although he opposes the amendments at paragraphs 23(f)
and 33, he agrees that to permit this amendment to paragraphs 23(f) and 33
is consistent with the Order and Reasons for Order. These amendments should be
permitted.
[12] This leaves paragraphs 13(d), 13(h), 23(a), the reference to subsection 15(1)
in paragraphs 23(e), 23(g), 27, 28, 29, 31, 33A, 33B and 34A.
[13] Of these proposed amendments to the Reply the only further amendments
that I think are inconsistent with my Order and Reasons for Order are 23(a),
33A and 33B. These are not allowed. The others are allowed.
[14] Broadly speaking, then, the amendments which I am prepared to permit
are those that are consistent with the GAAR assessment. The amendments which I
am not prepared to permit are those that relate to the justification of the
assessment under the FAPI rules.
[15] If there are any other proposed amendments which I omitted to deal
with, or if the parties require any further clarification of these reasons, I
would ask that counsel communicate with the Court.
Signed at Ottawa,
Canada, this 26th day of September 2006.
Bowman,
C.J.
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