Her Majesty the Queen v. Gulf Canada Resources Limited (Previously Gulf Canada Limited), [1994] 2 CTC 183, 95 DTC 5261

Mckeown J.:—The Associate Senior Prothonotary did not permit the appellant (defendant) to withdraw an admission in its amended defence. Furthermore, the Associate Senior Prothonotary did not strike out the part of the reply of the respondent (plaintiff).

The issue is whether the Associate Senior Prothonotary's ruling fails to meet the standard on appeal as set out in Aqua-Gem Investments Ltd. v. M.N.R., [1993] 1 C.T.C. 186, 93 D.T.C. 5080 (F.C.A.). As was stated by Isaac, C.J. at page 202 (D.T.C. 5090):

. . . discretionary orders of prothonotaries in this Court should be the same as that which was laid down in Stoicevski v. Casement (1983), 43 O.R. (2d) 436, for Masters in Ontario. I am of the opinion that such orders ought to be disturbed on appeal only where it has been made to appear that

(a) they are clearly wrong, in the sense that the exercise of discretion by the prothonotary was based upon a wrong principle or upon a misapprehension of the facts, or

(b) in making them, the prothonotary improperly exercised his discretion on a question vital to the final issue of the case.

Although Isaac C.J. dissented, MacGuigan J.A. agreed that this was the proper standard.

MacGuigan J.A. pointed out the true meaning of the final issue of the case at page 208 (D.T.C. 5094), where he stated in a footnote that:

It should be noted that Lord Wright's phrase "the final issue of the case” is quite different from "the final issue in the case.” Lord Wright means “vital to the result of the case” rather than “vital to the ultimate issue on the merits of the case."

In the case before me the amendments are not vital to the result of the case. The effect of the order of the Associate Senior Prothonotary is to include issues and not remove issues from the trial judge's purview.

I am not satisfied that the Associate Senior Prothonotary's discretion was based on an error of fact or law, except for the Associate Senior Prothonotary's finding that there should be a reference after the trial if certain circumstances were met. This reference was not sought by the Crown and is not in the form which it sought to have.

All words after “production or processing" in the second line of the order of the Associate Senior Prothonotary shall be deleted. This motion was argued for six hours before the Associate Senior Prothonotary and all the facts and law were argued in full.

The appellant also sought to amend their prayer for relief for the first time before me. This is not an issue on an appeal and the alternative relief is not granted.

Although it is not necessary to my decision, I agree with the parties that the admission contained in paragraph 19 of the amended defence is an admission of fact. The question of any consequence in law is left to the trial judge.

Costs to the plaintiff in any event of the cause.

Appeal dismissed.

Orenstein & Partners Inc., in its capacity as court-appointed receiver of

[Indexed as: Scannar Industries Inc. (Receiver of) v. Canada]

Federal Court of Appeal (Hugessen, MacGuigan and Linden, JJ.A.), June 21, 1994 (Court File No. A-662-93), on appeal from a decision of the Federal Court-Trial Division reported at [1994] 1 C.T.C. 215.

Income tax—Federal—Income Tax Act, R.S.C. 1952, c. 148 (am. S.C. 1970-71-72,

The appellant appealed from the court's refusal to allow it to amend its statement of claim to withdraw admissions which had been made in the pleadings.

HELD:

The proposed amendment would cause prejudice to the Crown because its purpose was to withdraw admissions that had been made in the pleadings. Appeal dismissed.

David C. Nathanson, Q.C., for the appellants.

Larry R. Olsson, Q.C., for the respondent.

Hugessen J.A.:—Despite Mr. Nathanson’s persuasive presentation we are not satisfied that Denault J. committed any error of law or acted on any wrong principle when he exercised his discretion not to allow the appellant’s proposed amendment to the statement of claim. By that amendment the appellant sought to repudiate and put in issue the validity of its own actions and the representations it had made to the Minister relating thereto on which the Minister had acted. We agree with the judge that the proposed amendment, which was general in scope and not susceptible of being distinguished as between the various representations made, seeks to withdraw admissions that had been made in the pleadings. Those admissions could not have been made through inadvertence and were of a nature to confirm the representations which the appellant had previously made to the Minister; their withdrawal would itself cause prejudice to the latter.

The appeal will be dismissed with costs.

Appeal dismissed.