Canada v. Fortino, docket A-950-96

Date: 19991214

CORAM:      THE CHIEF JUSTICE

         ROBERTSON J.A.

         NOËL J.A.

Docket: A-950-96

BETWEEN:

     HER MAJESTY THE QUEEN

     Appellant

     - and -

GIOVANNI FORTINO

Respondent

Docket: A-951-96

BETWEEN:

     HER MAJESTY THE QUEEN

     Appellant

     - and -

PILERIA FORTINO

Respondent

Docket: A-952-96

BETWEEN:

     HER MAJESTY THE QUEEN

     Appellant

     - and -

UMBERTO SPAGNUOLO

Respondent

Docket: A-953-96

BETWEEN:

     HER MAJESTY THE QUEEN

     Appellant

     - and -

ANGELA CAROBELLI

Respondent

Docket: A-954-96

BETWEEN:

     HER MAJESTY THE QUEEN

     Appellant

     - and -

FRANCO CAROBELLI

Respondent

Docket: A-955-96

BETWEEN:

     HER MAJESTY THE QUEEN

     Appellant

     - and -

GINA SPAGNUOLO

Respondent

Docket: A-956-96

BETWEEN:

     HER MAJESTY THE QUEEN

     Appellant

     - and -

ANTONIO SCORNAIENCHI

Respondent

Docket: A-957-96

BETWEEN:

     HER MAJESTY THE QUEEN

     Appellant

     - and -

ROSINA SCORNAIENCHI

Respondent

Docket: A-958-96

BETWEEN:

     HER MAJESTY THE QUEEN

     Appellant

     - and -

MARIO PRESTA

Respondent

Docket: A-959-96

BETWEEN:

     HER MAJESTY THE QUEEN

     Appellant

     - and -

ANNINA PRESTA

Respondent

Docket: A-960-96

BETWEEN:

     HER MAJESTY THE QUEEN

     Appellant

     - and -

ORESTE PRESTA

Respondent

Docket: A-961-96

BETWEEN:

     HER MAJESTY THE QUEEN

     Appellant

     - and -

STANISLAO FILICE

Respondent

Docket: A-962-96

BETWEEN:

     HER MAJESTY THE QUEEN

     Appellant

     - and -

VITTORIA PRESTA

Respondent

Docket: A-963-96

BETWEEN:

     HER MAJESTY THE QUEEN

     Appellant

     - and -

DORA SCORNAIENCHI

Respondent

Docket: A-964-96

BETWEEN:

     HER MAJESTY THE QUEEN

     Appellant

     - and -

LUCIANO SCORNAIENCHI

Respondent

Docket: A-965-96

BETWEEN:

     HER MAJESTY THE QUEEN

     Appellant

     - and -

MARIA FILICE

Respondent

Heard at Ottawa, Ontario, on Tuesday, December 14, 1999

Judgment delivered from the Bench at Ottawa, Ontario, on Tuesday, December 14, 1999

REASONS FOR JUDGMENT OF THE COURT BY:              NOËL J.A.

Date: 19991214

CORAM:      THE CHIEF JUSTICE

         ROBERTSON J.A.

         NOËL J.A.

Docket: A-950-96

BETWEEN:

     HER MAJESTY THE QUEEN

     Appellant

     - and -

GIOVANNI FORTINO

Respondent

Docket: A-951-96

BETWEEN:

     HER MAJESTY THE QUEEN

     Appellant

     - and -

PILERIA FORTINO

Respondent

Docket: A-952-96

BETWEEN:

     HER MAJESTY THE QUEEN

     Appellant

     - and -

UMBERTO SPAGNUOLO

Respondent

Docket: A-953-96

BETWEEN:

     HER MAJESTY THE QUEEN

     Appellant

     - and -

ANGELA CAROBELLI

Respondent

Docket: A-954-96

BETWEEN:

     HER MAJESTY THE QUEEN

     Appellant

     - and -

FRANCO CAROBELLI

Respondent

Docket: A-955-96

BETWEEN:

     HER MAJESTY THE QUEEN

     Appellant

     - and -

GINA SPAGNUOLO

Respondent

Docket: A-956-96

BETWEEN:

     HER MAJESTY THE QUEEN

     Appellant

     - and -

ANTONIO SCORNAIENCHI

Respondent

Docket: A-957-96

BETWEEN:

     HER MAJESTY THE QUEEN

     Appellant

     - and -

ROSINA SCORNAIENCHI

Respondent

Docket: A-958-96

BETWEEN:

     HER MAJESTY THE QUEEN

     Appellant

     - and -

MARIO PRESTA

Respondent

Docket: A-959-96

BETWEEN:

     HER MAJESTY THE QUEEN

     Appellant

     - and -

ANNINA PRESTA

Respondent

Docket: A-960-96

BETWEEN:

     HER MAJESTY THE QUEEN

     Appellant

     - and -

ORESTE PRESTA

Respondent

Docket: A-961-96

BETWEEN:

     HER MAJESTY THE QUEEN

     Appellant

     - and -

STANISLAO FILICE

Respondent

Docket: A-962-96

BETWEEN:

     HER MAJESTY THE QUEEN

     Appellant

     - and -

VITTORIA PRESTA

Respondent

Docket: A-963-96

BETWEEN:

     HER MAJESTY THE QUEEN

     Appellant

     - and -

DORA SCORNAIENCHI

Respondent

Docket: A-964-96

BETWEEN:

     HER MAJESTY THE QUEEN

     Appellant

     - and -

LUCIANO SCORNAIENCHI

Respondent

Docket: A-965-96

BETWEEN:

     HER MAJESTY THE QUEEN

     Appellant

     - and -

MARIA FILICE

Respondent

     REASONS FOR JUDGMENT OF THE COURT

     (Delivered from the Bench at Ottawa, Ontario

     on Tuesday, December 14, 1999)

NOËL J.A.

[1]      We have not been convinced that the Tax Court Judge made any reviewable error in concluding that the non-competition payments were not income from a source within the meaning of section 3 of the Act.

[2]      The Minister having abandoned for purposes of this appeal the alternative argument that the payments in question were to be included in income pursuant to section 14, the only remaining issue is whether the execution of the non-competition covenants can be said to have given rise to the disposition of capital property within the meaning of sections 38, 39 and the definition of "property" embodied in subsection 248(1).

[3]      In this respect, the record indicates that the Minister did not rely on this ground in issuing the reassessments. However, an attempt was made on the eve of trial to amend the pleadings so as to invoke reliance on this ground. The Tax Court Judge indicated her willingness to allow the amendment on terms as to costs and on the understanding that the hearing would have to be adjourned. Rather than face an adjournment, counsel for the Minister chose to withdraw the motion.

[4]      In her Reasons for Judgment, the Tax Court Judge ruled that it was not open to the Minister to argue the grounds which were invoked in the proposed amendment.¹ We can find no error in the decision of the Tax Court Judge on this point. She understood as did counsel for the taxpayers, that by withdrawing the motion to amend, the Minister had, in effect, abandoned this ground for purposes of the appeal. This was a reasonable interpretation of the actions of the Minister"s agent in the circumstances.

[5]      The appeals will be dismissed with one set of costs.

"Marc Noël"

J.A.

__________________

¹Reasons for Judgment, Appeal Book at 663.