Strayer J.A.:
1 We are all of the view that the decision of the Tax Court Judge must be set aside and the matter remitted to that Court for a new hearing.
2 In issue before the Tax Court was the country of residence of the applicant in the taxation years 1988 to 1994 inclusive. The Minister assessed him for those years on the basis that he was not a resident of Canada and therefore owed sums that should have been withheld from income earned in this country. The applicant in his appeal to the Tax Court asserted that he had been resident in Canada during this period. The only evidence at the hearing was that of the applicant. He testified to various activities in Canada during this period which would support the view that he was resident here. He testified that he was a landed immigrant. In particular he testified that he had stayed in Canada eight to nine months of each of the years in question. The Tax Court Judge proceeded to judgment without allowing cross-examination of the applicant on this evidence.
3 Although any views the Tax Court Judge might have had as to the credibility of this evidence would have been entitled to great deference by this Court, he expressed none. Instead, his findings of fact, in the form of a decision rendered orally, were limited to the following:
For the purposes of theIncome Tax Actyou were not a landed immigrant, you were not a deemed resident, and you were a non-resident of Canada.
4 The applicant attacks this decision on two grounds: that the Tax Court Judge erred in law in that he failed to consider relevant and uncontradicted evidence as to the applicant's residence in Canada; and that the Judge failed to give reasons as required by section 18.23 of the Tax Court of Canada Act.
5 With respect to the first point, we are in agreement that the Tax Court Judge committed an error of law in failing to take into account the applicant's evidence. That evidence, if credible, could have been sufficient to prove that the applicant was resident in Canada. While the evidence was not in all respects consistent, there is no clear indication from the Judge that he considered it and rejected it for lack of credibility or for any other reason. He simply says nothing about it. In the circumstances, we are left with the conclusion that he did not take it into account in his cryptic finding, quoted above, that the applicant was not resident in Canada.
6 With respect to the second point concerning the requirement in the Tax Court of Canada Act that reasons be given, we think it unnecessary to make any finding. It is true that the Tax Court Judge did give brief reasons for the result reached, that is the dismissal of the appeal, by saying that he found the applicant to be a non-resident. But he gave no reasons for this finding of fact. It is not necessary in this case for us to determine the precise legal ambit of the reasons required by section 18.23, although we would observe that the spirit of that provision would appear to be that the reasons should be sufficient so that a reasonable taxpayer can understand essentially why he has won or lost.
7 It is therefore necessary to set aside the decision of the Tax Court Judge and to refer the matter back to that Court for a new hearing. It is not open to us to give any direction as to what the decision of the Tax Court should be as there is no adequate evidentiary basis for doing so. The Tax Court Judge precluded cross-examination of the applicant with the result that there will have to be a new hearing where a proper assessment of credibility can be made.
Email this Content