Brulé,
T.C.C.J.:—The
respondent
has
brought
a
Motion
under
Rule
54
of
the
Tax
Court
of
Canada
Rules
for
leave
to
amend
the
reply
to
the
notice
of
appeal
(reply).
The
proposed
amendment
by
way
of
an
addition
to
the
reply
reads
as
follows:
In
the
alternative,
if
this
Honourable
Court
find
that
the
payments
in
question
are
properly
characterized
as
being
on
capital
account,
he
submits
that
no
amount
in
respect
thereof
may
be
deducted
in
computing
the
appellant's
income
by
virtue
of
paragraph
18(1)(b)
of
the
Act
other
than
those
amounts
in
respect
thereof
which
may
be
deducted
pursuant
to
paragraph
20(1)(b)
of
the
Act.
The
Court
refused
to
grant
leave
to
include
the
proposed
amendment
in
the
pleadings
for
the
reasons
set
out
below.
Rule
54
of
the
Tax
Court
of
Canada
Rules
states:
A
pleading
may
be
amended
by
the
party
filing
it,
at
any
time
before
the
close
of
pleadings,
and
thereafter
either
on
filing
the
consent
of
all
other
parties,
or
with
the
leave
of
the
Court,
and
the
Court
in
granting
leave
may
impose
such
terms
as
are
just.
Basically
the
appeal
of
Canderel
involves
the
issue
of
whether
tenant
inducement
payments
may
be
expensed
when
made,
as
is
claimed,
or
whether
such
payments
should
be
amortized
over
the
term
of
a
lease,
as
is
the
position
of
Revenue
Canada.
In
June
of
1990
the
appellant
was
reassessed
with
reference
to
the
expensing
of
the
payments
in
1986
and
such
reassessment
was
objected
to,
subsequently
confirmed,
and
the
appeal
filed.
No
mention
was
made
of
the
payments
being
characterized
on
capital
account.
The
reply
made
no
mention
of
capital,
nor
did
an
amended
reply
consented
to
by
the
appellant.
In
1992
in
the
amended
reply
reference
was
made
to
the
company
in
its
financial
statements
capitalizing
the
payments
and
amortizing
them
over
the
term
of
the
lease.
This
however
was
not
the
income
tax
treatment
followed
by
the
appellant.
After
a
status
hearing
held
in
August
of
1992
the
appeal
was
scheduled
to
be
heard
on
March
3,
1993
and
continuing
for
a
total
of
three
days.
Lists
of
documents
were
exchanged,
examinations
for
discovery
were
held
and
the
original
date
of
March
3,1993
for
the
hearing
was
adjourned
so
that
two
motions
could
be
made,
one
by
each
party.
Of
significance
at
the
motions'
hearing
was
that
the
counsel
who
appeared
for
the
respondent
clearly
indicated
that
the
matter
would
be
decided
likely
on
the
testimony
of
the
various
experts
as
to
which
method
of
expensing
the
payments
was
correct.
No
mention
was
made
that
such
payments
would
be
considered
in
whole
or
in
part
as
capital.
The
trial
commenced
on
May
31,1993
and
on
the
sixth
day,
after
several
witnesses
were
heard,
including
various
experts,
this
Motion
was
presented
to
the
Court.
It
was
the
opinion
of
the
Court
that,
given
the
delay
in
this
motion,
it
is
an
abuse
of
process
in
that
it
could
have
been
brought
much
earlier.
The
proposed
amendment
raised
a
new
issue
and
therefore
constituted
a
new
reassessment.
Such
an
amendment
at
a
late
stage
was
considered
and
refused
in
the
case
of
The
Queen
v.
McLeod,
[1990]
1
C.T.C.
433,
90
D.T.C.
6281
(F.C.T.D.).
The
timing
of
the
amendment
was
not
proper.
It
could
lead
to
a
recall
of
all
the
witnesses
and
the
experts
to
consider
in
their
testimony
the
proposed
change.
A
similar
situation
was
held
to
be
an
abuse
of
process
in
Special
Risks
Holdings
Inc.
v.
The
Queen,
[1984]
C.T.C.
71,
84
D.T.C.
6054
(F.C.T.D.)
where
Walsh,
J.
said
at
pages
74-75
(D.T.C.
6057):
.
.
.
no
proceeding
should
be
entertained,
even
if
it
might
be
found
to
have
some
relevance,
when
it
seeks
the
introduction
of
material,
which
the
parties
could
have
sought
to
introduce
many
months
earlier,
and
which
if
granted
would
have
the
effect
of
preventing
the
action
from
proceeding.
For
this
reason
alone
therefore
the
motion
is
an
abuse
of
the
process
of
the
Court
and
cannot
be
entertained.
This
judgment
was
upheld
by
the
Federal
Court
of
Appeal.
While
it
may
be
argued
that
the
amendment
could
be
remedied
to
the
appellant
by
way
of
costs
such
does
not
override
the
decision
in
the
Special
Risks
Holding
Inc.,
case,
supra.
The
motion
is
dismissed,
with
costs
to
the
appellant
and
he
is
allowed
to
submit
all
documents
which
form
the
basis
of
his
objection
to
the
motion.
Motion
dismissed.
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