Csak – Tax Court of Canada finds that a taxpayer could reverse a s. 160 assessment because inter alia her transferor husband had given a waiver for the primary assessment on a Sunday

Two months after their marriage, the taxpayer received (on January 8, 1993) from her 80-year old ailing husband (“CC”) the transfer of a property valued in excess of his subsequently assessed tax liabilities for various taxation years including his 1988 and 1989 years (as a result of losses from a partnership investment being denied). CRA alleged that it received a timely waiver by CC for his 1988 year. CRA also received a waiver for his 1989 year on the Monday immediately following the expiry of the normal reassessment period on the previous day.

Owen J rejected the taxpayer’s submission that she was not liable under s. 160(1) because she had provided full consideration for the transfer through her agreement to marry CC and care for him. However, he found (based on Gaucher) that she was not precluded from disputing the validity of the assessments of her under s. 160(2) on the grounds that the waivers proffered by CRA were invalid, even though this issue had not been raised in the unsuccessful group appeal by CC and others of the denial of the partnership losses.

Regarding the waiver for 1988, Owen J found that the burden on the Minister to establish that the waiver had been timely-received had not been met with evidence of a CRA employee that an unstamped signed waiver was included in the taxpayer’s physical file along with a time-stamped letter on behalf of the taxpayer that was not established to have been attached in front of the waiver.

Regarding the waiver for 1989 and in finding that s. 26 of the Interpretation Act (which provided that “Where the time limited for the doing of a thing expires or falls on a holiday, the thing may be done on the day next following that is not a holiday”), did not have the effect of deeming the waiver to have been received during the normal reassessment period expiring on the Sunday, Owen J stated:

A taxpayer filing a waiver is not facing a deadline that would preclude the taxpayer from doing anything. … The deadline relates solely to the validity of the waiver itself, not to the doing of something by the person filing the waiver.

Neal Armstrong. Summaries of Csak v. The King, 2024 TCC 9 under s. 160(1), s. 160(2), and s. 152(4)(a)(ii).