Section 180

Subsection 180(1)


Joint Committee, "COVID-19 Measures", 1 June 2020 Joint Committee Submission

Submission that Crown appeal rights not be revived

  • S. 6 of the draft Time Limits and Other Periods Act (COVID-19) (the “Proposals”) would have the effect of suspending, for the period March 13, 2020 to September 13, 2020 (subject to earlier termination), (a) any limitation or prescription period for commencing a proceeding before a court;(b) any time limit in relation to something that is to be done in a proceeding before a court; and (c) any time limit within which an application for leave to commence a proceeding or to do something in relation to a proceeding is to be made to a court.
  • For example, the Crown may have failed to appeal a Tax Court decision to the Federal Court of Appeal within this period, such that the Tax Court decision would have become final
  • It is recommended regarding any ITA proceedings (and similarly for ETA proceedings) that the Proposals provide that, without the taxpayer’s consent, their effect would not include displacing acquired rights and reopening proceedings which have achieved finality before the announcement of the Proposals.

Subsection 180(3) - Summary disposition of appeal


Atlantic Packaging Products Ltd. v. Canada, 2020 FCA 75

raising of new issue would prejudice the Crown

The taxpayer, a paper products manufacturer, engaged in a hybrid transaction in which it sold some of the assets of its “Tissue Division” directly to a third-party purchaser (“Cascades”) and rolled the balance of them down to a Newco (“722”) under s. 85(1) for shares of 722 and sold those shares to Cascades. CRA assessed on the basis that the sale of the shares was on income account.

The taxpayer sought to argue for the first time before the Court of Appeal that the share sale gain was a capital gain on ordinary principles. Webb JA found that it was too late for this issue to be raised. Although the evidence before the Tax Court could have permitted it to address most of the factors that were relevant to the capital account issue, Webb JA noted that one of the relevant factors in this regard was “the frequency or number of other similar transactions completed by the taxpayer,” and stated (at paras. 36):

While it would be presumed that Atlantic Packaging would not be frequently selling off an entire division, there is no indication of whether Atlantic Packaging followed a similar pattern or similar transactions in disposing of other depreciable property.

Accordingly, there would have been potential prejudice to the Crown in now addressing that issue.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 54.2 transfer of assets representing 68% of the FMV of the assets of a business division did not satisfy the “substantially all” test 223
Tax Topics - Income Tax Act - Section 9 - Capital Gain vs. Profit - Machinery and Equipment the number and frequency of similar dispositions of depreciable property was relevant to capital account treatment 341

Hôpital Santa Cabrini v. Canada, 2016 CAF 207

contractual interpretation question subject to Housen standard

After noting that the trial judge had made findings respecting the interpretation of contracts, Boivin JA referred to Sattva, [2014] 2 S.C.R. 633, for the proposition that “contractual interpretation constitutes a question of mixed fact and law” - so that the applicable review standard, following Housen v. Nikolaisen, 2002 SCC 33, was of palpable and overriding error.

Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Schedules - Schedule V - Part II - Section 6 a hospital which contracted for the services of nurses employed by a personnel-services agency was receiving a taxable supply 219
Tax Topics - General Concepts - Illegality arrangement alleged by hospital would have implicitly contravened provincial health legislation 105

Hafizy v. Canada (National Revenue), 2014 FCA 109, aff'g 2012 DTC 1093 [at 2943], 2012 TCC 56

tree must fall under palpable error standard

In affirming the trial judge's findings that the taxpayers' documentation was inadequate to support their purported cash expenses (see summary under General Concepts - Evidence), Gauthier JA stated (at para. 11):

As Stratas JA explained in Canada v. South Yukon Forset Corporation, 2012 FCA 164 at paragraph 46, "[w]hen arguing palpable and overriding error, it is not enough to pull at leaves and branches and leave the tree standing. The entire tree must fall. Here, ... at least one of the judge's references appears to be factually incorrect if read literally... . That being said, the tree has not fallen.

Canada v. Craig, 2011 DTC 5047 [at 5677], 2011 FCA 22, aff'd 2012 SCC 42

don't normally 2nd guess application of law to facts

At trial, the judge found that s. 31(1) did not stop the taxpayer from claiming farming losses for his horse breeding and racing business. He found that the taxpayer's farming constituted a significant part of his income in the years in question, and was more than a "sideline business." Therefore, under the framework set out in Gunn, s. 31(1) did not apply.

In affirming the trial judge's decision, Evans J.A. stated for the court at para. 27 that "it is not normally the function of an appellate court to second guess a trial judge's application of the law to the facts."

Allchin v. Canada, 2004 DTC 6468, 2004 FCA 206

correctness standard for isolated legal error

In noting an exception to the rule that in reviewing decisions of the Tax Court, the standard of review for conclusions of mixed fact and law was of palpable and overriding error, Malone J.A. stated (at pp. 6469-6470) that "if a clear legal error can be isolated from the facts, the error will be reviewed on a correctness standard".

Locations of other summaries Wordcount
Tax Topics - Treaties technical explanations 26
Tax Topics - Treaties - Income Tax Conventions - Article 4 99

McGoldrick v. Canada, 2004 DTC 6407, 2004 FCA 189

Housen v. Nikolaisen standard

"The standard of review set out in Housen v. Nikolaisen, [2002] 2 S.C.R. 235 applies to appeals from the Tax Court conducted under its informal procedure ... . That is, for questions of law, the standard is correctness while for findings of fact, inferences or conclusions of fact, or conclusions of mixed law and fact, the standard is palpable and overriding error." (p. 6408)

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 6 - Subsection 6(1) - Paragraph 6(1)(a) personal benefit of free meals was more than incidental/not primary employer benefit 90

Schwartz v. Canada, 96 DTC 6103, [1996] 1 SCR 254

no deference to FCA factual findings

La Forest J. found (at p. 6111) that the role that an appellate court should give deference to the findings of fact made by a trial judge "applies not only when the credibility of witnesses is at issue, although in such a case it may be more strictly applied, but also to all conclusions of fact made by the trial judge", but went on to find that the Supreme Court of Canada should not give any deference to factual findings made by the Court of Appeal that differed from those of the trial judge.

Dundas v. The Queen, 95 DTC 5116 (FCA)

Although the findings of facts of the trial judge were based on an agreed statement of facts, his findings involved drawing influences from those facts as to the true nature of the transactions, and in doing so he was obliged to apply the right legal principles in characterizing the transactions in terms of the provisions of the Act. Accordingly, the Court of Appeal was required to show some deference to the factual conclusion of the trial judge.

The Queen v. MerBan Capital Corp. Ltd., 89 DTC 5404 (FCA)

The inferences drawn by the trial judge that two subsidiaries were mere instrumentalities of the taxpayer were overturned by Iacobucci, C.J. after citing Gurd's Products.

The Queen v. Gurd's Products Co. Ltd., 85 DTC 5314, [1985] 2 CTC 85 (FCA)

Where neither of the parties disputes the findings of fact made by the Trial Judge, the Federal Court of Appeal is entitled to disagree with the Trial Judge on the inferences to be drawn from such facts if it is of the opinion that those inferences cannot, in the circumstances, be supported.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 250 - Subsection 250(4) 139

The Queen v. Graham, 85 DTC 5256, [1985] 1 CTC 388 (FCA)

Where the task confronting the trial judge was esentially one of finding the facts and applying the appropriate law, the appellate court should not interfere "unless the findings of fact were unsupportable and the proper law was not applied."

The Queen v. Consumers' Gas Co. Ltd., 84 DTC 6058, [1984] CTC 83 (FCA)

When the Minister takes a new position in the Court of Appeal, or in argument before the trial judge, the court should only consider that position when it is satisfied beyond a reasonable doubt that all requisite evidence has been adduced at trial that may bear on that position.

Hart v. The Queen, 82 DTC 6237, [1982] CTC 275 (FCA)

Where a view taken by the trial judge as to a question of fact and opinion "is not unreasonable or based on some erroneous principle, the Court, on appeal, will not substitute a different view merely because it might, had it been the Court of first instance, have preferred such a different view."

Birmount Holdings Ltd. v. The Queen, 78 DTC 6254, [1978] CTC 358 (FCA)

"[A]n initial Appellate Court must take into consideration well-established precedents, namely: (1) where the credibility of witnesses is involved, except in extraordinary cases, the finding of the Trial Judge must not be set aside; (2) the interpretation of the evidence is left to the discretion of the judge who sees and hears the witnesses, and it is the duty of a Court of Appeal to respect the judgment of the judge who has these privileges unless it is satisfied that the latter was plainly wrong."