632738 Alberta – Federal Court of Appeal finds that the determination of the scope of an ambiguously-worded waiver should be made at trial, not under Rule 58

CRA presented the taxpayer with a form of waiver that adequately referenced the issue as being how much partnership income was to be allocated to the taxpayer. Before signing the waiver, the taxpayer introduced some language that described the issue as being one of the application of s. 103 to the income of the taxpayer, not from the partnership X of which the taxpayer was a member, but from partnership Y of which partnership X was the predominant member and the taxpayer was not a direct member. The taxpayer subsequently brought an application for a Rule 58 determination that the reassessment by CRA, to apply s. 103 to it to increase its income from partnership X by $78 million, was not within the scope of the waiver.

In confirming the Tax Court’s finding that the scope of the waiver was not an appropriate issue for a Rule 58 determination and that such issue was best left to a regular trial, Woods JA indicated inter alia that it was not inappropriate of the Tax Court to consider that the Crown should have an opportunity at a trial to introduce evidence of the factual circumstances surrounding the waiver.

Neal Armstrong. Summary of 632738 Alberta Ltd. v. Canada, 2021 FCA 43 under Rule 58(2).