William Van Rooy v. Minister of National Revenue, [1987] 1 CTC 2437, 87 DTC 299

Christie, A.C.J.T.C.:—On July 25, 1975 the respondent reassessed the appellant in respect of his 1973 taxation year. The reply to notice of appeal is dated July 9, 1979. Paragraph 2 and 3(a) are under the heading Statement of Facts. They read:

2. The Respondent assessed the Appellant for his 1973 taxation year by including an unreported amount of $60,000.00 income on the basis that the Appellant had been involved in a fraudulent transaction which made a profit of at least $50,000.00.

3. In so assessing the Appellant,* [1] the Respondent assumed:

(a) the Appellant was involved in a curious transaction involving a diamond scheme, which, although the specific facts concerning the scheme remain uncertain because of the conflicting stories given by the Appellant, resulted in a profit to the Appellant of $60,000.00.

Paragraph 5 is under a heading which refers in part to THE REASONS WHICH HE (the respondent) INTENDS TO SUBMIT. It reads:

5. The Respondent submits that the appellant failed to include income of $60,000.00 in his tax return for 1973 resulting from the profit made by him in a diamond scheme and as such that amount is subject to tax pursuant to the Income Tax Act and the Respondent’s assessment is correct in that respect.

A certificate of conviction dated February 12, 1987 states that:

William J. Van Rooy was convicted in the Provincial Court (Criminal Division), Judicial District of Norfolk on the 7th day of March 1978, for that he between the 31st day of December 1972 and the 1st day of May 1974 at the Town of Delhi in the Judicial District of Norfolk or elsewhere in the Province of Ontario unlawfully wilfully did evade payment of taxes imposed by the Income Tax Act, to wit: by suppressing income in the sum of $60,000.00 for the taxation year 1973 thereby evading payment of $19,165.82 in taxes contrary to section 239(1)(d)t of the Income Tax Act.

The information contained three counts. This conviction pertains to the second. The appellant was not convicted on the other two counts. The sentence imposed was a fine of $6,000 and in default three months in prison. The prison sentence was served.

The Honourable the Minister of National Revenue having reconsidered the assessment and having considered the facts and reasons set forth in the Notice of Objection hereby confirms the said assessment as having been made in accordance with the provisions of the Act and in particular on the ground that

In that case at hand the words following “and in particular on the ground that” are: “the taxpayer’s income has been properly determined under the provisions of sections 3 and 4 and subsections 9(1) and 248(1) of the Act.” There is no reference to a penalty or to subsection 163(2). Paragraph 169(a) provides:

169. Where a taxpayer has served notice of objection to an assessment under section 165, he may appeal to the Tax Court of Canada to have the assessment vacated or varied after either

(a) the Minister has confirmed the assessment or reassessed,

but no appeal under this section may be instituted after the expiration of 90 days from the day notice has been mailed to the taxpayer under section 165 that the Minister has confirmed the assessment or reassessed.

The appellant’s notice of appeal dated December 19, 1978 refers to unreported business income of $60,000 but makes no mention of a penalty.

In the foregoing circumstances I have reservations regarding whether the respondent has pursued his reassessment pertaining to the penalty in accordance with the legal requirements even though in the reply to the notice of appeal reference is made to a penalty, without specifying the amount, and to subsection 163(2). I am not, however, deciding this question. I have not had the benefit of argument. It is something that can be taken up at the re-scheduled hearing of this appeal.

fit reads: 239(1) Every person who has

(d) wilfully, in any manner, evaded or attempted to evade, compliance with this Act or payment of taxes imposed by this Act, or

is guilty of an offence and, in addition to any penalty otherwise provided, is liable on summary conviction to . . ..

At the commencement of the hearing at London, Ontario, on February 18, 1987 counsel for the respondent invoked issue estoppel per rem judicatam (hereinafter referred to simply as issue estoppel except in one instance and in quotations). He added that he was not relying on abuse of process of the court.

In Angle v. M.N.R., [1975] 2 S.C.R. 248; 74 D.T.C. 6278, issue estoppel was involved. It is unnecessary for present purposes to recite the facts in detail. Briefly put, Mrs. Angle was in 1966 the president and controlling shareholder of Transworld Explorations Limited. She caused it to construct at its expense a pool house on a property owned by her. In assessing the respondent added this expense as an amount required to be included in computing her income under paragraph 8(1 )(c) of the Income Tax Act (now paragraph 15(1)(c) ) as a benefit conferred on a shareholder by a corporation. She unsuccessfully appealed the assessment to the Exchequer Court. In the course of that litigation she said on discovery that she was indebted to the corporation in the sum of $34,000. Some time after the proceedings in the Exchequer Court had terminated the Minister of National Revenue sought to collect taxes owing by Kansas City Traders Limited which was a creditor of Transworld. Writs of Extent, which were in the nature of rather sweeping garnishment proceedings in favour of the Crown, were obtained from the Exchequer Court against Transworld as a debtor of Kansas City Traders and against Mrs. Angle as a debtor of Transworld. In securing the latter Writ, reliance was placed on what she had said on discovery. She pleaded issue estoppel in relation to the Writ of Extent proceedings relying on the decision of the Exchequer Court on her appeal against the assessment. Dickson, J. (as he then was) delivered the judgment of the majority of the Court; Laskin and Spence, JJ. dissented. He said at pages 253-55 (D.T.C. 6280):

In earlier times res judicata in its operation as estoppel was referred to as estoppel by record, that is to say, estoppel by the written record of a court of record, but now the generic term more frequently found is estoppel per rem judicatam. This form of estoppel, as Diplock, L.J. said in Thoday v. Thoday, (1964) P. 181, 198, has two species. The first, “cause of action estoppel”, precludes a person from bringing an action against another when that same cause of action has been determined in earlier proceedings by a court of competent jurisdiction. We are not here concerned with cause of action estoppel as the Minister’s present claim that Mrs. Angle is indebted to Transworld in the sum of $34,612.33 is obviously not the cause of action which came before the Exchequer Court in the s. 8(1 )(c) proceedings. The second species of estoppel per rem judicatam is known as “issue estoppel”, a phrase coined by Higgins, J. of the High Court of Australia in Hoystead v. Federal Commissioner of Taxation (1921) 29 C.L.R. 537, 561:

I fully recognize the distinction between the doctrine of res judicata where another action is brought for the same cause of action as has been the subject of previous adjudication, and the doctrine of estoppel where, the cause of action being different, some point or issue of fact has already been decided (I may call it “issue-estoppel”).

Lord Guest in Carl Zeiss Stiftung v. Rayner & Keeler Ltd. (No. 2), [1967] A.C. 853, 935, defined the requirements of issue estoppel as:

.. (1) that the same question has been decided; (2) that the judicial decision which is said to create the estoppel was final; and, (3) that the parties to the judicial decision or their privies were the same persons as the parties to the proceedings in which the estoppel is raised or their privies . . .

Is the question to be decided in these proceedings, namely the indebtedness of Mrs. Angle to Transworld Explorations Limited, the same as was contested in the earlier proceedings? If it is not, there is no estoppel. It will not suffice if the question arose collaterally or incidentally in the earlier proceedings or is one which must be inferred by argument form the judgment. That is plain from the words of de Grey, C.J. in the Duchess of Kingston's case, (1776) 20 St. Tr. 355, 538n. quoted by Lord Selborne, L.J. in Reg. v. Hutchings (1881), 6 Q.B.D. 300, 304, and by Lord Radcliffe in Society of Medical Officers of Health Hope, [1960] A.C. 551. The question out of which the estoppel is said to arise must have been “fundamental to the decision arrived at” in the earlier proceedings; per Lord Shaw in Hoystead v. Commissioner of Taxation, [1926] A.C. 155. The authors of Spencer Bower and Turner, Doctrine of Res Judicata, 2nd Ed. pp. 181, 182, quoted by Megarry, J. in Spens v. I.R.C., [1970] 3 All E.R. 295, 301, set forth in these words the nature of the enquiry which must be made:

. . . whether the determination on which it is sought to found the estoppel is “so fundamental” to that substantive decision that the latter cannot stand without the former. Nothing less than this will do. [Emphasis not mine.]

Mr. Justice Dickson concluded that the question he posed must be answered in the negative. In doing so he said at page 256 (D.T.C. 6281):

A finding of no liability by Mrs. Angle to Transworld was not legally indispensable to the judgment on the income tax appeal or a necessary finding to support that judgment.

In Duhamel v. The Queen, [1984] 2 S.C.R. 556; 14 D.L.R. (4th) 92 the issue Was,

Is the Crown estopped from relitigating the admissibility of a statement made by the accused which was ruled upon as inadmissible by a judge holding a voir dire in a previous criminal proceeding?

The answer is no.

Mr. Justice Lamer delivered the judgment of the Court. He said that the question to be decided was whether interlocutory findings on a voir dire pertaining to confession should be brought within the scope of the doctrine of issue estoppel. He answered in the negative. He said at page 564 (D.L.R. 99-100):

The change to the law being a major departure from the traditional approach of the doctrine in the field of interlocutory findings, I think there is a burden placed upon whomsoever invites the change to satisfy this Court that there is a clear advantage to the administration of justice in developing the law in this direction.

In the absence of an autonomous appeal of such findings, I do not think that appellant has made that case.

At the outset he referred with apparent approval to some of the things included in the reasons for judgment delivered by Moir, J.A. when the case was before the Alberta Court of Appeal. The latter said issue estoppel derived from the concept of res judicata and that it originated in the estoppel per rem judicatam aspect of res judicata. This is consistent with what Dickson, J. said in Angle. Mr. Justice Moir cited this passage from Spencer- Bower and Turner's The Doctrine of Res Judicata, 2nd (1969) ed. at page 542:

The necessary constituents of estoppel per rem judicatam

Any party who is desirous of setting up res judicata by way of estoppel, whether he is relying on such res judicata as a bar to his opponent’s claim, or as the foundation of his own, and who has taken the preliminary steps required in order to qualify him for that purpose, must establish all the constituent elements of an estoppel of this description, as already indicated in the general proposition enunciated at the commencement of this chapter. That is to say, the burden is on him of establishing (except as to any of them which may be expressly or impliedly admitted) each and every of the following:

(i) that the alleged judicial decision was what in law is deemed such;

(ii) that the particular judicial decision relied upon was in fact pronounced, as alleged;

(iii) that the judicial tribunal promouncing the decision had competent jurisdiction in that behalf;

(iv) that the judicial decision was final;

(v) that the judicial decision was, or involved, a determination of the same question as that sought to be controverted in the litigation in which the estoppel is raised;

(vi) that the parties to the judicial decision, or their privies, were the same persons as the parties to the proceeding in which the estoppel is raised, or their privies, or that the decision was conclusive in rem.

In Grdic v. The Queen, [1985] 1 S.C.R. 810; 19 D.L.R. (4th) 385, the question before the Court was whether the appellant could rely on issue estoppel in relation to a charge of perjury. The Court divided five to four. The majority held that this defence was available to the appellant.

He had been acquitted of driving while impaired with a blood alcohol level exceeding .08. What occurred at trial is summed up in this passage from the reasons of Mr. Justice Lamer, who wrote for the majority, at pages 822-23 (D.L.R. 387-88):

A police constable testified that he had stopped Grdic at approximately 6:30 p.m. when he observed him driving erratically. A certificate of analysis was introduced to prove that Grdic had provided breath samples at 7:30 p.m. and 7:50 p.m. on June 23 and that the samples indicated a blood alcohol level of 0.17.

Grdic testified that he had been stopped for impaired driving on June 23 but denied that he was driving and was stopped at the time given by the constable. His testimony was that he was stopped at approximately noon, gave samples of his breath at that time, and that he was definitely home as of 5:00 p.m. Grdic's daughter gave evidence corroborating his testimony. The Crown did not attempt to call anyone in rebuttal.

A charge was preferred against Grdic that his evidence was perjury. The appellant was acquitted at trial on this charge on the ground of issue estoppel. The acquittal was set aside and a new trial ordered by the British Columbia Court of Appeal. It was restored by the Supreme Court. The reasoning of the majority is accurately stated from this extract from the headnote:

The defence of issue estoppel was available to the appellant. On a charge of perjury, the Crown is estopped from re-litigating an issue decided in favour of the appellant — in this case, the truthfulness of appellant’s alibi — unless it is tendering, in addition to or in lieu of the evidence previously adduced, evidence that was not available by the exercise of reasonable diligence at the time of the first trial. Here, the new evidence relevant to the falsity of the alibi was available at the time of the original trial but was not called. Although the Crown was taken by surprise by the appellant’s alibi it could have introduced the evidence necessary to disprove that alibi on rebuttal.

Wilson, J. wrote the dissenting reasons for judgment in which is expressed a different view of the facts at pages 817-18 (D.L.R. 397):

I must respectfully differ from my learned colleague in his view that a finding was made by the trial judge trying Grdic on the impaired driving charges that he was not the person driving the car at 6:30 p.m. On the contrary, the trial judge, it seems to me, expressly refrained from making any finding on that issue.

As had been done by Dickson, J. in Angle, she cited the three requirements of issue estoppel listed by Lord Guest in Carl-Zeiss-Stiftung. Nothing said by Lamer, J. questions these criteria which is in accord with his reasons in Duhamel. It is settled that they are the constituent elements of issue estoppel. I regard the first three matters listed in The Doctrine of Res Judicata (supra), as merely an express statement of what is necessarily implied in relation to the last three.

In Sheridan Warehousing Limited v. The Queen, [1983] C.T.C. 90; 83 D.T.C. 5095, issue estoppel was considered by the Federal Court—Trial Division. The facts are set out in this extract from the reasons for judgment delivered by Mr. Justice Mahoney:

The Plaintiff and two of its officers were charged with tax evasion. The material part of the charge against the plaintiff was that it . . . unlawfully did on or about [January 23, 1974, at Hamilton, Ontario] wilfully attempt to evade payment of taxes totalling $168,726.91 imposed by the Income Tax Act on [the Plaintiff for 1972], by submitting false documents to the Department of National Revenue purporting to be copies of correspondence . . . thereby committing an offence punishable under section 239(1)(d) of the said Act.

The offence lay not in failure to report the transaction but in the submission of false documents intended to corroborate the V-Day value placed on the property in the plaintiff’s tax return.

The agreed statement of facts goes on:

7. On December 4, 1979, the Plaintiff pleaded not guilty to the said charge and was tried before His Honour Provincial Court Judge E.A. Fairbanks, in the Provincial Court (Criminal Division) for the Judicial District of Hamilton-Wentworth on December 4, 5, 6 and 7, 1979; March 31, 1980; April 1, 2 and 3, 1980; and October 20, 21, 22 and 23, 1980.

8. The Crown, at trial, as evidence relating to the offence with which the Plaintiff and the two others were charged, called three expert appraisers who testified that the fair market value of the subject property at Valuation Day was $430,000.00, $445,000.00 and $500,000.00 respectively. The Plaintiff and the two other accused, at trial, called two expert appraisers who testified that the fair market value of the subject property at valuation day was $1,400,000.00.

Paragraphs 9 and 10 recite the facts of the conviction and sentence and identify the exhibited transcripts and paragraph 11 states that no appeal was taken from conviction or sentence.

The matter had come before his Lordship as a special case stated pursuant to Rule 475 of the Federal Court Rules. He said:

The questions to be answered are:

1. Did the learned Trial Judge His Honour Judge E.A. Fairbanks, in the criminal proceeding Her Majesty The Queen v. Sheridan Warehousing Limited (the Plaintiff herein), Sheridan Lax and Samuel Lax, heard in the Provincial Court (Criminal Division), Judicial District of Hamilton-Wentworth, determine the fair market value of the property at 80 Brant Street in Hamilton, Ontario, (the 'subject property’) as at December 31, 1971?

2. If the answer to question 1 is in the affirmative, does such a determination estop the Defendant herein from asserting in the present proceeding that the fair market value of the subject property, as at December 31, 1971, was not more than $445,000.00 as alleged in subparagraphs 4(b), 4(c), 4(d), 6, 7, 9 and 10 of athe Statement of Defence.

The determination of the matter is at page 5098:

I am bound to deal with the question whether Judge Fairbanks determined the V-Day value as a pure question of fact. Clearly, he did not. Rather, being “almost” required to do so, he adopted $1,350,000 as “some sort of guide line’ that gave those he was sentencing the benefit of the doubt which he obviously entertained as a result of the unsatisfactory state of the expert evidence.

The first question must be answered in the negative. It is a matter of considerable intellectual regret that I am not, therefore, called upon to deal with the second. It was most ably argued by both counsel. Costs of this reference will be in the cause.

When the two questions stated in the special case are read together with this conclusion it suggests to me that Mahoney, J. is saying that it was not necessary for him to decide whether issue estoppel could be invoked at all where the decision relied on arises out of a prosecution for violating the Income Tax Act and the subsequent proceeding is an appeal from an income tax assessment. This notwithstanding that his finding that Judge Fairbanks did not determine V-Day value was directly related to the first of three rules applicable to issue estoppel and would have disposed of the matter if the doctrine applied in the circumstances.

It is clear from the authorities cited and others including Gushue v. The Queen, [1980] 1 S.C.R. 798 at 802-3; 106 D.L.R. (3d) 152 at 156-57, that issue estoppel applies where the judicial decision relied upon to found issue estoppel and the proceedings in which it is invoked are both criminal in nature. The same is true of civil proceedings. Reported decisions on issue estoppel are rare that involve a hybrid where, as in this appeal, the judicial decision relied upon arises out of a prosecution for an offence and the proceeding in which issue estoppel is asserted is civil in nature. Sheridan is such a case, but it did not decide whether issue estoppel applies in these circumstances. Because of the comprehensive consideration it gave to issue estoppel mention is made of McllKenny v. Chief Constable of West Midlands Police Force and another related appeals, [1980] 2 All E.R. 227 (C.A.)* [1] As Lord Diplock noted, the hearing before the English Court of Appeal occupied 12 days and involved the citation of 77 authorities.

In my view issue estoppel can have no application to the combination of litigation just described. An appeal from an assessment is, of course, civil in nature. It is basic to issue estoppel in civil proceedings that there be reciprocity or mutuality: see, for example, Humphrys per Lord Edmund-Davies at page 51. The third requirement of issue estoppel regarding identity of parties or their privies is founded on this rule. Mutuality cannot exist in cases like the one at hand. Assume, for example, that a taxpayer is acquitted on a charge under paragraph 239(1)(d) of having wilfully failed to include $10,000 in income in computing his income for a taxation year. In addition to being prosecuted he has been reassessed by the Minister of National Revenue who added the $10,000 in computing his income for the same year. The taxpayer appeals the reassessment and the appeal comes on for hearing after the acquittal. Could he successfully invoke issue estoppel thereby succeeding on the appeal? I think not. In prosecutions for alleged offences the fundamental question is whether the Crown has established beyond a reasonable doubt that the accused did the act complained of. The answer determines his liability to penal punishment. Generally the basic question to be answered on an appeal from an assessment of tax payable is whether the appellant has established on a balance of probability that the Minister erred in his assessment. The answer will determine his liability to tax. What transpires with respect to a prosecution does not lend itself to being equated with the fundamental question on an appeal from an assessment.

I believe the same can be said regarding a case where the question is whether a taxpayer is liable to a penalty under subsection 163(2) of the Act. I do not think that his acquittal on a charge under paragraph 239(1)(d) of having wilfully failed to include $10,000 in computing his income would estop the Minister on an appeal to this Court from establishing on a balance of probabilities, as is required under subsection 163(3) of the Act, that the taxpayer is liable to a penalty in relation to the $10,000.

An appeal to this Court from a reassessment to tax is not litigating afresh the same issue that existed between the same parties on a prosecution for an alleged violation of paragraph 239(1)(d) even though both proceedings may be founded on essentially the same facts. Re-litigation of decided fundamental issues is what issue estoppel is intended to prevent. The doctrine does not lend itself to easy or generous application. It has been banished from the criminal law in the United Kingdom: D.P.P. v. Humphrys, [1977] A.C. 1 at 21, 40, 43 and 48; [1976] 2 All E.R. 497 at 506, 523, 525 and 529 and Hunter v. Chief Constable of West Midlands Police and others, [1982] A.C. 529 at 541; [1981] 3 All E.R. 727 at 733.

Although I have concluded that issue estoppel can have no application to this litigation and consequently the findings of fact made in the course of prosecution are irrelevant to this appeal, I will deal with this preliminary matter as if the doctrine could apply if its three requirements are met. Issue estoppel will then have been fully canvassed for present purposes. The reason for taking this step is that I was informed by counsel in the course of argument that if the respondent did not succeed on this preliminary matter a lengthy hearing would likely follow. If necessary he is prepared to present anew the considerable evidence presented on the prosecution.

The respondent reassessed the appellant on the basis that the $60,000 gain on the “‘diamond scheme” was ordinary income. In his reasons for judgment Provincial Court Judge D.J. Wallace recited the facts in some detail. This included reference to a number of transactions and the amounts involved, the precise nature of which is not altogether clear to me. He then said:

I am persuaded by the evidence that the accused was an active partner with Gu- gliamo in attempting to defraud the likes of Adams, Gardner, Yohn and Ireland. On the other hand, I conclude that once the accused guide to the big leagues of fraud, that the big boys from Amsterdam and New york City, he was at once over his head and he soon became a victim of fraud. Be that as it may however, the significant fact in this case is that the accused by his own admission, in the taxation year 1973, received the sum of $95,600.00. If the calculation recently referred to is employed, then the sum of $135,000.00 was received by the accused. If these monies came from the sale of a painting or paintings as the accused maintains, the capital gains provisions of the Income Tax Act will apply. If these monies came from the proceeds of the fraud,* [2] they would be taxable as income under the Act. The method of taxation however, and what deductions might be applicable are academic considerations. The monies were received and not declared by the accused on his 1973 income tax return exhibit number eight. No explanation was offered in evidence for the failure by the accused to delare such sums and the failure by him to disclose may be presumed to be wilful. I therefore conclude that while the amounts of suppressed income and tax is evaded as recited in count number two before the Court, have not been proven with exactness by the Crown. There is sufficient evidence to prove beyond a reasonable doubt, the suppression by the accused of substantial income in the taxation year, 1973 which in turn would result in wilful tax evasion. The accused accordingly, will be found guilty of count number two.

I cannot regard this as compliance with the first requirement of issue estoppel.

The judicial decision rendered by Wallace, Prov. Co.J. is unquestionably final. The sentence was served in default of payment of the fine years ago. The second requirement is therefore met.

Now to the third requirement. The style of cause pertaining to the prosecution is Regina v. William J. Van Rooy. In these proceedings it is William Van Rooy v. M.N.R. Prior to 1972 the parties referred to in the style of cause on appeals from assessments or reassessments were the appellant(s) and the Minister of National Revenue. This was true regarding appeals to the Tax Appeal Board, Tax Review Board, Exchequer Court, Federal Court and the Supreme Court of Canada. Subsequently in all cases, except those coming before the Tax Review Board and now the Tax Court, the parties mentioned in the style of cause are Her Majesty the Queen and the appellant(s). The reasons for this are to be found in two reported cases: In Re Mastino Developments Limited v. The Queen, [1972] C.T.C. 249; 72 D.T.C. 6211 (F.C.T.D.) and Weintraub v. The Queen, [1972] C.T.C. 302; 72 D.T.C. 6262 (F.C.T.D.) on appeal [1972] C.T.C. 331; 72 D.T.C. 6296. For an understanding of why the change was made it is sufficient to quote this extract from the reasons for judgment delivered by Chief Justice Jackett at 332 (D.T.C. 6296- 97):

The Income Tax Act imposes taxes payable to Her Majesty. (See section 118 of the “former Act” and section 222 of the “amended Act”.) The Minister of National Revenue, who is head of a government department (see the Department of National Revenue Act, R.S.C. 1970, c. N-15), is charged with the administration and enforcement of the Income Tax Act. (See section 220 of the amended Act.) He has no rights or obligations personally in respect of the taxes imposed. What he does, through his department, is carry on, on behalf of Her Majesty, all the operations that are required to collect the amount payable under the Act and to repay, on behalf of Her Majesty out of Her Majesty’s funds, any amounts that have to be repaid under the Act.

One of the things that must be done by any minister who has to collect amounts payable to the Crown is to make a determination, as best he can, of the amounts that are payable, so that he can claim them. The device adopted in the Income Tax Act to get a final determination of such amounts is to make the minister’s determination, or assessment, of any such amount final, subject to appeal to the Courts. In my view, however, such a determination or assessment is nevertheless merely a part of the minister’s administration of the Act. It is done in the carrying out of his duties as a minister of the Crown charged with the collection of the revenues.

On an appeal to the Courts from such an assessment, the issue is an issue as to the amount of tax payable to Her Majesty and is, therefore, an issue between the taxpayer and Her Majesty. When heretofore, such an appeal has been carried on by way of a proceeding set up as a proceeding between the taxpayer and the minister, the minister has been a nominated party carrying on litiagation on behalf of Her Majesty just as the Attorney General is conducting litigation on behalf of Her Majesty when he brings an action, as Attorney General, in one of the other courts of the land for a debt owing to Her Majesty.

Until recently, it has been the custom to carry on litigation concerning rights or obligations of the Crown by way of special proceedings, e.g., petitions of right and informations. The current tendency is however to eliminate such special proceedings, with a view to obtaining a uniform proceeding for all law suits whether the Crown is a party or not. So, section 48 of the Federal Court Act provides for actions against the Crown being launched by a statement of claim or declaration as are actions in this Court between subject and subject and Rule 600 of the Rules of this Court provides for actions by the Crown being launched in the same way. Section 175 of the amended Income Tax Act is another step in the same direction.

In my view, section 175 of the amended Income Tax Act is clear and unambiguous. It provides for appeals being instituted “in the manner set forth in section 48 of the Federal Court Act”, which provision authorizes the institution of a proceeding against the Crown by a document in the form set out in Schedule A of that Act, and that Schedule provides for a statement of claim or declaration entitled between the person launching the proceeding, called “Plaintiff’’ and “Her Majesty the Queen” called “Defendant”. I have difficulty in understanding how it could be thought that section 175 of the amended Income Tax Act could mean anything except that an appeal may be brought be a statement of claim or declaration in which the taxpayer is called “Plaintiff” and the other party is “Her Majesty the Queen” and is called “Defendant”.

All this, except the reference to section 48 of the Federal Court Act and section 175 of the Income Tax Act, applies in respect of assessments or reassessments appealed to this Court. On an appeal from this Court to the Federal Court — Trial Division the style of cause changes by substituting reference to Her Majesty the Queen for the Minister of National Revenue although in substance it is precisely the same contest involving the same interests. If the appellant had appealed the reassessment directly to the Federal Court — Trial Division under subsection 172(2) of the Act instead of to the Tax Court the style of cause would have been William Van Rooy v. Her Majesty the Queen. The Attorney General of Canada was represented by counsel on the prosecution of the appellant and acts through counsel on behalf of the respondent on this appeal. Paragraph 5(d) of the Department of Justice Act provides:

5. The Attorney General of Canada shall

(d) have the regulation and conduct of all litigation for or against the Crown or any public department, in respect of any subject within the authority or jurisdiction of Canada.

The foregoing satisfies me that for the purposes of the third requirement of issue estoppel the parties involved in the prosecution and on this appeal are the same.

The respondent's attempt to rely on issue estoppel fails. The registrar will be instructed to re-schedule the hearing of this appeal at an early date.

Order accordingly.