Date: 19991022
Docket: 97-3805-IT-G
BETWEEN:
PATRICK VILLENEUVE,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Reasons for Order
Bonner, J.T.C.C.
[1] This is an application by the Respondent for leave to
amend the Reply to the Amended Notice of Appeal herein.
[2] The appeal is from assessments which rest on calculations
of income made by the net worth method. The Respondent seeks to
amend the existing Reply by adding paragraph 15.1 which reads as
follows:
15.1 He further states that the Appellant operated a business
of importing alcohol illegally into Canada and selling illegally
imported alcohol and he states that he failed to report his
income from the said business during the period in issue.
[3] The general rule with respect to amendments is stated by
the Federal Court of Appeal in The Queen v. Canderel
Limited, 93 DTC 5357 at page 5360 as follows:
... the general rule is that an amendment should be allowed at
any stage of an action for the purpose of determining the real
questions in controversy between the parties, provided, notably,
that the allowance would not result in an injustice to the other
party not capable of being compensated by an award of costs and
that it would serve the interests of justice.
[4] In the Affidavit of William Ott, filed in support of
the application to amend, the deponent asserts that on
August 27, 1998 the Appellant was convicted of conspiracy to
smuggle liquor into Canada and the unlawful possession of
$25,000.00 in currency, obtained or derived directly or
indirectly as a result of the commission of an offence. The
deponent states that it is the Respondent's position that
illegal activities pursued by the Appellant and the subsequent
convictions and forfeiture are relevant to the issue in the
appeal, namely, whether the Appellant understated his income for
the years in question.
[5] I read paragraph 15.1 as an allegation of material fact,
at least in a case such as this where the Respondent takes the
position that the Appellant did not, in his returns of income,
disclose his income from all sources. The question whether
smuggling constituted a source of income to the Appellant during
the period in issue is, in my view, is one which is clearly
relevant to the determination of the question in issue in the
appeal.
[6] The Respondent does not seek to vary the assessments of
tax under appeal. He does not seek to increase the assessments.
He simply seeks to defend the assessments by pleading a material
fact which, if established, would tend to demonstrate that the
assessments are well founded. The amendment is therefore, in my
view, required to determine the real question in controversy.
[7] An order will therefore issue permitting the amendment
requested. Costs of this motion will be in the cause.
Signed at Ottawa, Canada, this 22nd day of October 1999.
"Michael J. Bonner"
J.T.C.C.
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