General Motors Acceptance Corp. Of Canada Ltd. v. R., [1999] 4 CTC 2251, 99 DTC 975

Rip T.C.J.:

These are reasons dismissing the motion of the appellant/applicant General Motors Acceptance Corporation Of Canada, Limited (“GMAC”) pursuant to section 53 of the Tax Court of Canada Rules (General Procedure) (“Rules”) for an order to strike certain paragraphs of the respondent’s amended reply to the notice of appeal and to direct the sole issue before the Court. The applicant relied on the reasons for judgment of the Supreme Court of Canada in Continental Bank of Canada v. R. (1998), 98 D.T.C. 6501 (S.C.C.), at 6503, per McLachlin J. and 6504-6505, per Bastarache J.

GMAC (also referred to as “the taxpayer”) is a corporation incorporated under the laws of Canada and is a wholly-owned subsidiary of General Motors Acceptance Corporation of New York which, in turn, is a wholly- owned subsidiary of General Motors Corporation, a Delaware corporation. The business of GMAC is to finance the sales of new motor vehicles manufactured by General Motors Corporation and its subsidiary companies including General Motors of Canada Limited (“GMCL”), a Canadian corporation, to authorized dealers of GMCL (collectively the “dealers” and individually a “dealer”) for resale and to finance the dealers’ retail instalment sales of new General Motors motor vehicles as well as used motor vehicles of any make.

GMAC says it finances GMCL’s sales in the following manner:

a) a purchaser of a new General Motors motor vehicle enters into a conditional sale contract with a dealer whereby the purchaser agrees to pay instalment payments to the dealer;

b) the conditional sale contract provides that, if the conditional sale contract is assigned to GMAC, the purchaser will pay the instalment payments directly to GMAC;

c) GMAC invariably purchases the conditional sale contract from the dealer.

The price paid by GMAC to a dealer as consideration for a conditional sale contract generally is dependent, among other things, upon the interest rate payable under the conditional sale contract and the market rate at the time. Normally GMAC would pay a price equal to the aggregate of the principal payments (the “principal amount”) required to be made by the purchaser under the conditional sale contract if that contract bore a rate of interest acceptable to GMAC which normally would approximate the market rate at that time.

During the various taxation years in issue, in order to promote its sales of certain General Motors motor vehicles, GMCL initiated low rate financing programs with the dealers whereby the dealers would offer retail customers “below-market” interest rates on purchases of certain General Motors motor vehicles. The availability of incentive financing under a low rate financing program depended on the make, model and timing of the sale of a particular motor vehicle. The applicant says GMCL absorbed the cost of the financing programs. From 1985 until mid-1989 GMCL would reimburse or compensate GMAC for the difference between the market interest rate and interest rate extended to the purchaser of the motor vehicle by making payments to the taxpayer which GMCL described as “rate support payments”. In or about mid-1989 (following the assessments by Revenue Canada of GMAC’s 1980 to 1983 taxation years to include the rate support payments in income in the year of receipt), GMAC says it was authorized by GMCL to write cheques on the bank account of GMCL for the portion of the sale price financed by GMAC under the low rate financing program and GMAC transferred such payments to the dealers.

GMAC filed notices of objection to the notices of reassessment for 1985 to 1992 taxation years inclusive as follows:

On August 29, 1997 issued new notices of reassessment for each year confirming the first notices of reassessment. [1]

The taxpayer appealed the new notices of assessment.

Her Majesty the Queen, the respondent, through the Deputy Attorney General of Canada filed a reply to the taxpayer’s notice of appeal and subsequently filed an amended reply to the notice of appeal. In the respondent’s pleadings, the Deputy Attorney General of Canada stated that she relied, inter alia, on the provisions of sections 3 and 9, paragraphs 12(1)(c) and (x) of the Income Tax Act (“Act”) as well as paragraphs 12(1)(a), 18(1)(s) and 20(1 )(/), subsections 12(3), 56(2) and 248(1) of the Act.

GMAC’s motion pursuant to section 53 of the Rides asks the Court to: a) strike paragraphs 8(k), 8(m), 9(a), 9(c), 14, 16 and 17 of the amended reply to the notice of appeal^; [2] and

b) direct that the sole issue before the Court in the within matter is whether the payments described by the respondent in the amended reply as “rate support payments” are to be included in the taxpayer’s income under subsection 56(2) and paragraph 12(1)(a) of the Act.

The grounds for the taxpayer’s motion are:

i) counsel for the respondent represented to the Court at a hearing of another motion of the taxpayer, that the Minister of National Revenue (“Minister”) reassessed the taxpayer on the basis that the payments in issue in this appeal were “...income to GMAC under subsection 56(2) and paragraph 12(1 )(c)”;

ii) the respondent is not entitled to “advance a new basis for a reassessment after the limitation period for reassessment has expired”, as it has with respect to the taxation years in issue in these appeals; and

iii) the portions of the amended reply sought to be struck, seek to advance a new basis in support of the reassessments in issue.

Applicant’s counsel argued that the Attorney General is bound by the assessing position of the Minister and is not entitled at trial to advance a different basis to sustain a reassessment. Accordingly, he states the precise basis on which a reassessment was raised is not only relevant to the issue of onus of proof but it also operates to define the precise case that a taxpayer has to meet at trial. It precludes the Attorney General from raising further or

8. k) the rate support payments including the pay ments made by cheques out of the bank account of GMCL were inducements or compensation to the Appellant for providing financing at less than market rates of interest;

8. m) the conditional sales contracts were not inventory and were not acquired in the course of a business of buying and selling such contracts.

9. a) whether the rate support payments including the amounts paid by cheque out of the bank account of GMCL were to be included in the Appellant’s income under s. 9 of the Income Tax Act (the “Act”) in the year of payment or as income over the life of the financing contact;

9. c) whether the said payments were required to be included in income in the year pursuant to paragraph 12(1)(x) of the Act.

14. He submits that the payments provided to or for the benefit of the Appellant were paid to compensate the Appellant for providing low rate financing in the course of the Appellant’s business, and were properly to be included in its income from its business in the year under s. 9 of the Act.

16. He submits that the payments were inducements provided to the Appellant for providing the low rate financing and were required to be included in the Appellant’s income in the year pursuant to paragraph 12(1)(x) of the Act.

17. He submits that the conditional sales contracts were not part of the Appellant’s inventory, that subsection 10(1) of the Act did not apply, and that there was no basis to claim a writedown of the cost of the contracts in computing the Appellant’s income.

different bases to sustain a reassessment. Counsel referred to McLachlin, J. speaking for the majority of the Supreme Court in Continental Bank, supra, at page 6503:

... The Minister cannot argue that the Bank could not transfer its partnership interest at this stage. The Minister must accept that this transfer took place because his assessment of the Bank was based on the assumption that the Bank disposed of its partnership interest. I agree with Bastarache, J. that the Minister’s argument ... raised for the first time in this Court, cannot be entertained. The Minister should not be allowed to advance a new basis for a reassessment after the limitation period has expired.

Bastarache, J. stated that “to allow the appellant to proceed with its new assessment without the benefit of findings of fact made at trial would require this Court to become a court of first instance with regard to the new claim”. [3]

The question whether a particular assumption was made on assessment and the question whether the assumption is factually correct are generally heard before the trial judge since it is difficult to deal with these questions on an interlocutory motion. [4] The motion was therefore heard by me at the commencement of the hearing on the merits of these appeals by GMAC.

Rule 53 provides that:

The Court may strike out or expunge all or part of a pleading or other document, with or without leave to amend, on the ground that the pleading or other document,

(a) may prejudice or delay the fair hearing of the action,

(b) is scandalous, frivolous or vexatious, or

(c) is an abuse of the process of the Court.

Among the representations made by counsel for the respondent, Mr. Arnold Bornstein, at the hearing of another motion on March 22, 1999, was that the assumptions made in the reply and amended reply to the notice of appeal are found in the notes of the meeting of October 16, 1996. This in- formation was also provided to GM AC’s counsel on an undertaking from the examination for discovery of an officer of Revenue Canada.

The applicant presented evidence that while the notices of objection to the first notices of reassessment were being considered by the Toronto East Taxation Services Office of Revenue Canada, the files were transferred to Revenue Canada’s Head Office Appeals in Ottawa. The reasons and the decision to make the second reassessments were considered and made at Head Office. A meeting attended by representatives of the taxpayer, and officials of Revenue Canada including Mr. Robert Beith, Assistant Deputy Minister of Revenue Canada, was held at Revenue Canada’s Head Office in Ottawa on October 16, 1996. According to notes [5] of this meeting, taken by an employee of Revenue Canada, Mr. Beith was of the view:

The payments [GMAC] received from GM Canada were in lieu of interest at the time the loans were made.

Mr. Beith was also of the view that GMAC was not simply buying conditional sales contracts but was lending money. [6]

Also, according to the notes of the October 16, 1996 meeting, Mr. Roger Taylor, one of the Minister’s counsel, informed the participants that Revenue Canada was of the view that both pre and post 1989 payments were made with the concurrence of GMAC and GMCL’s payments to the dealers are income to GMAC under subsection 56(2) and paragraph 12( I )(<?) as compensation under the rate support payments. Applicant’s counsel declared that prior to September 17, 1998, when the Crown produced documents under Rule 82, the taxpayer believed that the new reassessments originated from the district office and not from the head office of Revenue Canada.

The taxpayer’s position is that Mr. Bornstein’s comments are effectively an admission that sections 3 and 9 and paragraph 12(1)(x) of the Act were not considered by the respondent in reassessing the taxpayer. Consequently references to those provisions should be struck from the reply and not be permitted to be used to support the new reassessments.

The respondent filed an affidavit by Mr. Bornstein rejecting the applicant’s interpretation of his comments. [7] In his affidavit, Mr. Bornstein indicates that the purpose of his comments was merely to show that the taxpayer was aware that paragraph 12(1)(c) and subsection 56(2) had been relied on by the respondent in making the reassessments. He further stated that he did not intend to suggest that sections 3 and 9 and paragraph 12(1 )(x) had not been relied on by the Minister.

The respondent submits that Mr. Bornstein made his submission with the knowledge that the taxpayer had already admitted that the Minister had relied upon sections 3 and 9 and paragraph 12( 1 )(x). These alleged admissions occurred at the examination of Mr. W.J. Watson, a representative of the taxpayer, on September 17, 1998. At this examination, one of the taxpayer’s counsel, Mr. Steiner, in an exchange with respondent’s counsel, Mr. Shipley, stated that the “Minister did issue the assessments pursuant to sections 3 and 9 of the Act”. Mr. Steiner also stated the Minister did not rely on paragraph 12( 1 )(c) of the Act but did rely on paragraph 12(1)(x). As far as Mr. Steiner was concerned at the time, the issue was whether the Minister relied on paragraph 12(1)(c).

Mr. Bornstein deposed that the admissions made by Mr. Steiner were in his mind at the time he made his disputed statements, and that the term “assumptions of the Minister” meant, as far as he was concerned, “assumptions of the Minister to which the appellant has not yet admitted”. Since the respondent acknowledged that sections 3 and 9 and paragraph 12(1)(x) had been relied upon, Mr. Bornstein claims his reference to assumptions specified at the October 16, 1996 meeting referred only to disputed assumptions.

Nevertheless GMAC maintains that Mr. Bornstein’s statements should be binding. Mr. Bornstein was counsel for the respondent and that nothing in his affidavit denies that the assumptions referred to at the October 16, 1996 meeting were the only assumptions that were made.

The applicant further argues that when Mr. Steiner made his statements, he was under the impression that the assessments were made at the audit level, when in fact they were made by Head Office Appeals. Mr. Steiner’s admissions, therefore, should not carry any weight.

Applicant’s counsel, relying on the comments of McLachlin and Bas- tarache, J.J. in Continental Bank, supra, concluded that if the only assumptions made in the reassessments were those involving paragraph 12( 1 )(<?) and subsection 56(2), then the respondent cannot now submit new arguments relating to sections 3 and 9, and paragraph 12( 1 )(x). Counsel suggests that the notes of the October 16, 1996 meeting described in full the Minister’s assumptions and reasons for assessing. In his affidavit Mr. Bornstein explains that his comments related to only assumptions that were not admitted by the taxpayer. That Mr. Steiner made certain admissions in error is not significant; [8] what is important is what was in Mr. Bornstein’s mind when he admitted certain facts and whether the taxpayer was prejudiced as a result of the Minister making or not making certain assumptions on assessing. I am not prepared to question the truth of what Mr. Bornstein deposed in his affidavit. I am not convinced the taxpayer suffered a prejudice on the facts before me.

It is well established that mistaken admissions can be withdrawn. In Abrahams v. Minister of National Revenue (No. 2) (1966), 66 D.T.C. 5453 (Can. Ex. Ct.), President Jackett of the Exchequer Court of Canada stated at page 5462:

...1 might make this comment, however, that a discussion of these issues assumes an air of fantasy and unreality when all the evidence points to the conclusion that the appellant directed the operations of the sales organization that I referred to earlier as an employee of the company while the appellant takes the position, and the respondent concedes, that he did so as an independent contractor. In these circumstances, it would seem that this might be a case where the evidence and the admission made by counsel for the Minister cannot stand together, in which event, the admission should be taken to have been made under a misapprehension and it is the duty of the Court to have regard to the real facts as shown by the evidence. See Sinclair v. Blue Top Brewing Co., (1947) 4 D.L.R. 561, at page 562. If this principle applies in a cause between ordinary persons, it would seem to have even greater application where the revenue is involved.

In Continental Bank Leasing Corp. v. R. (1993), 93 D.T.C. 298 (T.C.C.), Bowman, T.C.C.J. stated at pages 301-302:

...If it is true it should be readily provable in considerably less time than this motion has taken. If it is not true it should not have been admitted and the court should not be required to base its decision on an erroneous factual premise. While l do not doubt the authority of the Attorney General of Canada to make admissions of fact in litigation to which the Crown is a party, it must be recognized that there is a public interest in income tax appeals and the court should be in a position to decide cases on the basis of correct facts and properly defined issues. It would do no credit to our system of justice in Canada if the courts were restricted in their consideration of the merits of a case by an ill-considered admission that is inconsistent with another position that is being advanced, particularly where it is sought to withdraw such an admission at an early stage in the proceeding. This is equally true whether the party seeking to change its position is the taxpayer or the Crown. [9]

Therefore, if Mr. Bomstein’s admitted something in error, such an admission is not binding if untrue. Similarly, the taxpayer’s admission through Mr. Steiner that sections 3 and 9 and paragraph 12(1)(x) were relied upon by the Minister in assessing is not binding if untrue.

The fact that Mr. Bornstein’s affidavit does not deny that sections 3 and 9 paragraph 12( 1 )(x) were not relied upon in assessing, does not lead me to necessarily conclude that the lack of denial is to be taken as an admission that they were. The purpose of Mr. Bornstein’s affidavit was merely to clarify what he meant when he made the disputed statement, essentially to withdraw an admission. Not denying is not the same as admitting. The reply and amended reply state that sections 3 and 9 and paragraph 12(1)(x) were relied upon in assessing the taxpayer. The fact that Mr. Bornstein did not choose to repeat this oft-asserted position of the respondent is not significant. Mr. Bornstein did not attempt to mislead, nor did he mislead, GMAC as to the basis of the assessments in issue and the statutory provisions on which the Minister based the assessments.

If I could find that the taxpayer misinterpreted the comments of Mr. Bornstein and concluded that the Minister, in assessing, relied only on subsection 56(2) and paragraph 12(1)(c) of the Act, the taxpayer cannot find any solace in Continental Bank, supra. I am not of the view that Continental Bank is authority for the proposition that Her Majesty The Queen is bound by the conclusions of law made by the Minister in assessing a taxpayer and cannot submit further arguments of law based on provisions of the Act in addition to those considered in assessing to support the assessments under appeal, in particular after the reassessment period has expired. Such a proposition is contrary to the established practice of Canadian courts having jurisdiction in income tax matters. The Attorney General, however, must exercise caution as to how, when and where she may present such alternative or additional arguments.

In Stone, J.A.’s view of the law, the Minister is not in all circumstances confined to his assumptions made at the time of assessing. [10] He referred to several cases where the Exchequer Court and the Federal Court Trial Division had occasion to consider the place and importance of the Minister’s assumptions in tax litigation. [11] Stone, J.A. did not

...understand that the law as developed in these cases prevented the Minister from pleading the alternative defence before the Tax Court of Canada. It is true that in pleading he is subject to certain constraints. For example, he cannot plead an alternative assumption when to do so would fundamentally alter the basis on which his assessment was based as to render it an entirely new assessment. In my view, in the present cases the Minister has not so changed the basis of the assessments. What he did was merely to assert a different legal result flowing from the self-same set of facts by alleging that those facts show the existence of a joint venture or partnership if they do not show an agency relationship. Even if it could be said that the Minister has alleged new “facts” by adopting the alternative posture, the law as developed allowed him to do so but imposed upon him the onus of proving those facts: Pillsbury, supra, at page 5188; Continental Bank Leasing Corporation et al. v. The Queen, 93 D.T.C. 298 (T.C.C.), at page 302. The same opinion is implicit in Wise et al. v. The Queen, 86 D.T.C. 6023 (F.C.A.) where Pratte, J.A. stated at page 6024:

It is common ground that the Minister had, in this case, the burden of establishing the correctness of the assessments since he was trying to support them on grounds that were different from those on which they were based.

Subsection 152(1) of the Act requires the Minister to examine a taxpayer’s return for the taxation year and “assess the tax” for the year. An assessment of tax is only the ascertainment and fixation of liability for tax.I [12] It is, Thorson, P. stated:

...the summation of all the factors representing tax liability, ascertained in a variety of ways, and the fixation of the total after all the necessary computations have been made. 1 [13]

In short, an assessment is the Minister’s ascertainment, after considering all the relevant circumstances before him, sometimes including his own opinion, of the amount of tax chargeable to a given taxpayer. [14]

An assessment for tax is for a fixed amount of money. A taxpayer becomes liable for tax not through the assessing action of the Minister’s officials but by virtue of the Act itself. The basis of any assessment is the transaction undertaken by a taxpayer that is caught by the Act. An assessor’s reason for assessing, or subsequently a lawyer’s appreciation of the facts and law, is open to debate; that is why there is an objection procedure in the Act. If a taxpayer is not content with the Minister’s reconsideration of the assessment, he or she may appeal the assessment. An appeal to this Court determines whether the amount of tax assessed is too high. [15]

When a taxpayer appeals an assessment he or she has the right to know what facts the Minister considered, or assumed to be true, in fixing the assessment. The Attorney General is obliged to plead facts which bring the assessment within the four corners of the taxing statute. These facts are not normally described on the notice of assessment received by the taxpayer, although a notice occasionally refers to the statutory provisions that are the bases of the assessment. [16] When the Minister has reassessed, the Minister normally explains the changes from the previous assessment. In many cases Revenue Canada writes letters to taxpayers setting out its reasons for an imminent assessment. When a notice of objection has been filed and the assessment is confirmed, the Minister notifies the taxpayer of the reason for the confirmation, if not the assessment.

It is important for the taxpayer to know the assumptions made by the Minister in assessing because in an appeal the initial onus is on the taxpayer to “demolish” the exact assumptions made by the Minister but no more. [17] The assumptions normally set out in the respondent’s reply to the taxpayer’s notice of appeal.

There is nothing in the Rules of this Court, the Tax Court of Canada Act, or the Income Tax Act, precluding a party in an appeal to plead in the alternative. It may well be that a party may not be successful on his or her main argument but may be successful if an alternative argument is pleaded. [18] For example, a taxpayer may argue that an amount of money received on the disposition of property ought not be included in computing income for the year since the amount was received for the account of another person, and if the amount was not received for someone else, the assessment should be reduced to take into account that the disposition was on capital account.

The facts leading to an assessment are normally known by a taxpayer, not the Minister. Thus, the Minister may learn of additional facts during the course of considering a notice of objection or on discovery of a taxpayer after the normal reassessing period has expired. The Minister or the Attorney General may realize during one of these stages that the Crown’s assessment may be valid not only on the basis of the statutory provisions the Minister originally assessed but on other provisions as well.

Rand, J. speaking for the majority of the Supreme Court of Canada, in Johnston v. Minister of National Revenue,'? [19] stated:

Since the taxation is on the basis of certain facts and certain provisions of law either those facts or the application of the law is challenged. Every such fact found or assumed by the assessor or the Minister must then be accepted as it was dealt with by these persons unless questioned by the appellant. If the taxpayer here intended to contest the fact that he supported his wife within the meaning of the Rules mentioned he should have raised that issue in his pleading, and the burden would have rested on him as on any appellant to show that the conclusion below was not warranted. For that purpose he might bring evidence before the court notwithstanding that it had not been placed before the assessor or the Minister, but the onus was his to demolish the basic fact on which the taxation rested.

Thus, the taxpayer’s onus of proof is with respect only to the findings or assumptions made by the Minister’s officials at the time the assessment was made. Later on, at page 490, Rand, J. reminded the Crown of its duty to: ...fully disclose to the taxpayer the precise findings of fact and rulings of law which have given rise to the controversy.

Applicant’s counsel submits that since a taxpayer’s onus of proof is only with respect to the facts and statutory provisions actually assumed by the Minister in the making of the assessment, the Attorney General cannot allege any other facts or rely on any other statutory provisions unless she does so within the prescribed time to issue a new assessment of tax.

I do not agree with counsel. The Minister may allege new facts, facts that came to the Minister’s knowledge after the assessment was issued, and may submit additional statutory provisions, but the taxpayer must be informed of these allegations and submissions in a timely manner, not on the eve of a trial and definitely not at the appellate level. The taxpayer must have sufficient time to consider and review the new allegations and submissions. And, of course, the Crown has the onus of proving the allegations of facts it did not consider on assessing and to convince the court that the provisions of the Act newly relied on support the assessment.

In the application at bar any additional submission of law, including statutory provisions, if indeed the respondent alleged statutory provisions in her pleadings that the Minister did not consider when assessing, was set out in the respondent’s reply and amended reply. The taxpayer was not taken by surprise and suffered no prejudice. The taxpayer had plenty of time to challenge the assessments by leading evidence in the normal course. The taxpayer has not missed the opportunity to examine the Minister’s officials for discovery and adduce evidence at trial. This is not a situation where the Crown raised new arguments simply because other arguments failed in other courts. [20] The Tax Court is a court of first instance and it is in this Court that findings of fact are made. The Minister is not appealing his own assessments.

What Bastarache, J. feared, and what he was concerned with, in Continental Bank, supra, aside from a new argument coming at the eleventh hour, was that an assessment was created by a new fact situation that was not considered by the court of first instance. I do not believe he denied that neither the Crown nor the taxpayer may, in a court of first instance, prepare pleadings in the alternative. It is not unusual for a taxpayer to file an appeal in the general procedure after the normal reassessment period, as in the appeals at bar. Counsel for the respondent, on further reflection of the facts of an action, may reasonably arrive at different conclusions of law from that made by the Minister’s officials.

In the appeal at bar, the Attorney General is making neither new assumptions of fact nor introducing new issues that would negate the assessments under appeal and create a wholly new set of assessments. The respondent has a factual basis to plead paragraphs 8(k), 8(m), 9(a), 14, 16 and 17 of the amended reply to the notice of appeal. In McLeod, supra, the tax- payer was assessed on the basis he was not engaged in the business of farming. All of his losses from farming were denied. In its statement of defence the Crown argued that if Mr. McLeod was in the business of farming, then his chief source of income was not farming nor a combination of farming and another source of income. The Attorney General then attempted to file an amended statement of defence adding a new assumption, that Mr. McLeod’s chief source of income was neither farming nor a combination of farming and another source. In Collier, J.’s view the Crown was creating a new assessment totally different from the assessment before the Federal Court and did so after the limitation period for reassessing had expired. The Crown attempted to circumvent the limitation period by trying to amend its pleadings when the Minister could not reassess directly.

In Hollinger Inc. v. R.,2! [21] Létourneau, J.A. stated that:

[W]hile Collier, J. in McLeod refused the amendment on account of the expiry of the limitation period, he never questioned the Crown’s right to make new assumptions at trial or advance a new argument in support of the assessments^ [22]

Létourneau, J.A., at pages 10 and 11, was comforted by the recent legislative amendment in Bill C-72 brought to section 152 of the Act to override the Supreme Court’s decision in Continental Bank on this procedural issue. He stated that the amendment is “indicative of the philosophy that ought to prevail in these matters” and agreed that “arguments in support of an assessment can be made in pleadings, even if not included in a notice of reassessment”.

This is not the case at bar. The quantum of tax assessed is not affected. The assessments are not changed. The facts assumed by the Minister in assessing are not changed. What is added is the Minister’s conclusion of law resulting from the facts assumed. And, unlike Continental Bank, the Crown raises its new arguments in its pleadings in a court of first instance, where the taxpayer has opportunity to advance proper evidence to challenge the assessment. The taxpayer, as far as I could observe, prepared his case on the respondent’s pleadings. As trial judge I have the benefit of hearing all the relevant evidence and can make the findings of fact. There is not here, as in Continental Bank, a paucity of evidence for an appellate court to consider if it should come to that.

Therefore, if I had found that the Minister, in reassessing, relied only on subsection 56(2) and paragraph 12(1)(c) of the Act, that is, the provisions referred to in the notes of the October 16, 1995 meeting, or that the applicant, on the basis of comments by respondent’s counsel, reasonably concluded that the Minister relied only on these provisions when assessing, I would have to reject the application to strike. However, if I had made such a finding, the Attorney General would have the onus of proving that part of the respondent’s case on which the purported additional arguments were based.

The motion is dismissed. Costs shall be in the cause.

Motion dismissed.