Darch (L.) v. Canada, [1994] 2 CTC 1

Hugessen, J.A. (orally):—We have not been persuaded that the learned trial judge erred in finding that the appellants’ financial adviser had “special knowledge" and that such special knowledge was the very foundation for the appel- lants’ acquisition and subsequent disposition at a profit of the shares in question. In the circumstances it was no error for the trial judge to characterize the whole transaction as being an adventure in the nature of trade and taxable as such.

The appeals will be dismissed.

Appeal dismissed.

Heinz Heinze v. Her Majesty The Queen

[Indexed as: Heinze (H.) v. Canada]

Federal Court—Trial Division (Strayer, J.), April 26, 1994 (Court File No. T-804-85), on an appeal from a decision of the Tax Court of Canada reported at [1985] 1 C.T.C. 2046.

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

c. 63)—Federal Court Rules—324, 419—Practice and procedure—Summary judgment.

The plaintiff appealed from a 1984 Tax Court of Canada decision which dismissed his appeal relating to the deductibility of mortgage interest and municipal taxes. In this action, the plaintiff applied for summary judgment on the ground of delay and lack of reasonable defence. The application was submitted in writing pursuant to Rule 324.

HELD:

This was not the kind of motion which should be dealt with in writing. Furthermore, the plaintiff had proved neither default of the defendant nor lack of a reasonable defence. Application dismissed.

The plaintiff appeared on his own behalf.

Peter Hejecek for the respondent.

Strayer, J.:—This is an application submitted in writing pursuant to Rule 324 'Tor an order finalizing this action by allowing the deductibility of mortgage interests and municipal taxes for the years 1978, 1979, and 1980

The action in which this interlocutory motion is brought appears to be an appeal from a decision of the Tax Court of Canada in 1984, unfavourable to the plaintiff. The present application appears to be a kind of request for a summary judgment "for unreasonable delay by the defendant and pursuing to Rule 419 of the General Rules and Orders of the Federal Court, not having a reasonable defence in this action".

The application must be dismissed for at least two reasons.

Firstly, this is not the kind of motion which should be dealt with in writing: in the words of Rule 324 I do not consider it "expedient" to dispose of it in this fashion. At the very least there are some detailed questions of fact and probably some disputes as to legal issues which cannot readily be disposed of in this fashion. Secondly, it is not clear on what basis the plaintiff seeks the relief described above. He has not made a proper application for summary judgment. He has not demonstrated that the defendant is in default and that he is therefore entitled to default judgment. Nor’has he shown in his evidence the "unreasonable delay” or the lack of a reasonable defence (in respect of which he seems to be invoking Rule 419). It can hardly be said, the defendant having won in the Tax Court, that her defence is so patently invalid that it should be struck out. Nor is there any evidence of undue delay on the part of the defendant. The procedure in an appeal from the Tax Court to this Court involves a new trial and the procedures that go along with it, including discovery. According to the evidence of counsel for the defendant, the plaintiff has not made discovery of documents. The defend- ant has carried out an examination for discovery of the plaintiff, a procedure which the plaintiff seems to regard as only a delaying tactic even though it is fully within the rights of the defendant in such a proceeding.

The application must therefore be dismissed.

Application dismissed.