Federal Courts Rules

Rule 3(1)

Cases

Linett v. The Queen, 79 DTC 5471, [1980] CTC 36 (FCA)

The computation of time for instituting an appeal under the Income Tax Act is made pursuant to that Act and is not affected by the Federal Court Act.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 167 - Subsection 167(4) 53

Rule 26

Subsection 26(1)

Cases

Rémillard v. Canada (National Revenue), 2020 CF 1061

open court principle applied in finding that the certified Federal Court record is open to the public absent a specific confidentiality order

The taxpayer, a retired businessman living in Barbados, sought to challenge, through judicial review, information requests made by CRA (who was reviewing his residency status) to other countries’ tax authorities. After he had requested the certified record contemplated by Federal Court Rules 317 and 318), he was contacted by a journalist inquiring about the application. The taxpayer immediately obtained a judicial provisional confidentiality order, and launched an application for a declaration that the material communicated in accordance with Rule 318 did not form part of the public court file, but was rather akin to documents produced on discovery so as to be subject to an implied undertaking of confidentiality. Pamel J concluded that there were significant differences between discovery procedures and the communication of the certified record, and that the latter was not subject to the implied undertaking rule. Pamel J referred in numerous places in his reasons to the “open court” principle, including the statement by the Supreme Court in Sierra Club that “[t]he link between openness in judicial proceedings and freedom of expression has been firmly established by this Court,” and further stated (at paras. 30-31):

Section 26 of the FCR is clear. The open court principle allows any person to inspect a court record and any annex "that is available to the public" … .

While the general rule is that documents in a court file or annex are public, not all documents in the court file or annex are necessarily "available to the public". Documents or material that are treated as confidential under a rule of law or that are subject to a confidentiality order of the Court continue to be treated as confidential and are designated as such at the time of filing with the Court, identifying the relevant rule of law or court order, if any (s. 152(1) FCR). Otherwise, the FCR do not provide a mechanism for recognizing the confidentiality of documents "in the possession of the Registry".

Pamel J dismissed the motion to declare the entire certified record confidential, but reserved the right for taxpayer to make a motion for a confidentiality order in accordance with the usual Sierra Club criteria.

Locations of other summaries Wordcount
Tax Topics - Other Legislation/Constitution - Federal - Federal Courts Rules - Rule 318 - Subsection 318(1) the certified Federal Court record is open to the public absent a specific confidentiality order 583
Tax Topics - Other Legislation/Constitution - Charter (Constitution Act, 1982) - Section 8 public access to the certified court record in a judicial review application did not entail an unreasonable search or seizure 434

Rule 65

Articles

Brooke Sittler, "Review of Penalty and Interest Relief Requests Under the Income Tax Act", 2015 CTF Annual Conference paper

Double-sided documents (other than authorities) rejected (p. 42:5)

...A double-sided document may not be accepted for filing in the registry, necessitating that the document be prepared again in the proper format. This step can cost valuable time when deadlines are drawing near.

Rule 71

Articles

Brooke Sittler, "Review of Penalty and Interest Relief Requests Under the Income Tax Act", 2015 CTF Annual Conference paper

Electronic filing (p.42:5)

Recent amendments to the rules have made the judicial review process less paper-intensive. For example, the Federal Court now allows for electronic service and filing of documents. At the time of writing, rule 71 has not yet been amended to include reference to a document being sent to the registry by electronic transmission. However, the Federal Court issued a notice to parties and the legal profession on February 26, 2013 which allows for the electronic service of documents and also, via an e-filing application on the Federal Court website, the electronic filing of documents directly to the court. ...

Rule 75

Cases

McKesson Canada Corporation v. Canada, 2014 FCA 290

amendment allowed to address allegation that trial judge's commenting on appeal memorandum was improper

Following a decision against the taxpayer, the trial judge recused himself from considering residual issues (e.g. costs) because of statements made about his judgment and his trial conduct in the taxpayer's factum filed in the Court of Appeal (see s. 247(2).)

The taxpayer moved under Rule 75 to amend its notice of appeal in order to add a new ground of appeal: the trial judge, in responding to the factum in detail, improperly injected himself into the appeal process and compromised its integrity.

Stratas JA allowed the taxpayer's motion. The jurisprudence on Rule 75 deals mainly with trials rather than appeals, but similar principles apply (para. 8):

[T]he Court must understand the nature of the parties' case, assess whether the amendment is relevant to the determination of that case, and, where a new ground of appeal is being asserted, ask whether that ground can possibly succeed.

The motions judge can also refuse amendment if the moving party has been dilatory, or considerations of fairness or prejudice so warrant (para. 10).

The new ground of appeal was novel, and was not obviously lacking merit (para. 11). Fairness reasons also supported the taxpayer's motion (para. 12).

Locations of other summaries Wordcount
Tax Topics - Other Legislation/Constitution - Federal - Federal Courts Rules - Rule 346 long factums are bad advocacy 143

Rule 114

Articles

Brooke Sittler, "Review of Penalty and Interest Relief Requests Under the Income Tax Act", 2015 CTF Annual Conference paper

Group or representative proceedings (pp. 42:9-10)

...In situations where the minister issues a decision or decisions that apply to all members of a group of taxpayers and those taxpayers seek judicial review of the minister's decision or decisions, the Federal Courts Rules offer two options. Rule 102 permits applicants to join in one proceeding where they are represented by the same counsel and the relief claimed arises from substantially the same facts or raises a common question of fact or law. Alternatively, rule 114 permits one application to proceed as a representative proceeding. Like rule 102, rule 114 is applicable only when there are common issues of law and fact.

Rule 151

Subsection 151(2)

Cases

Rémillard v. Canada (National Revenue), 2021 FC 644

the open court principle ousted a taxpayer’s need for privacy

At 2020 FC 1061, Pamel J dismissed the taxpayer’s interlocutory motion for an order of confidentiality respecting the certified record that was transmitted to the Federal Court Registry. In this application, the taxpayer asked the Court to issue an order of confidentiality and a permanent publication ban on some of the information contained in the common evidentiary record.

Pamel J granted the motion in part for information that the Minister also agreed should be redacted, pertaining to such things as SIN number, business and GST/HST account numbers, etc., as they established a serious risk of identity theft, but not to information respecting the taxpayer’s financial information or information regarding third parties that were not involved in the proceedings and that had not consented to the use of their confidential information collected by the CRA.

In finding that the taxpayer had not satisfied the first of the three conjunctive Sierra Club tests, namely, that “court openness poses a serious risk to an important public interest,” Pamel J stated (at paras. 67, 69-70, 73, 75):

[The taxpayer’s] preference for discretion with respect to his affairs and his desire to remain out of the public spotlight are not an important public interests. …

[T]here must be an element of an individual’s privacy concerns that elevates them to a public concern, beyond personal concerns and sensibilities (Sherman at para 54).

In this case, there is simply no such element; we are not dealing with a risk to Mr. Rémillard’s personal safety, an attack on his dignity, a risk of psychological harm or a risk to his professional reputation. …

This leaves Mr. Rémillard’s concerns about the disclosure of his personal tax and financial information. In my opinion, whether the important public interest is privacy or tax secrecy, the inconvenience of media attention in this case is at odds with the open court principle and does not in itself warrant the order sought. …

As the Supreme Court made clear in Sherman, the implementation of the open court principle will necessarily infringe the privacy rights of litigants, so the preservation of that right cannot be a ground in itself for overriding the public nature of court proceedings. There is no indication that Mr. Rémillard’s tax information requires different protection from the usual protection for all other tax records.

See Also

Sherman Estate v. Donovan, 2021 SCC 25

sealing order would violate open court principle

The Sherman Estate had sought sealing orders to block public access to estate files. The sealing orders were initially granted, but challenged by a journalist and the Toronto Star newspaper on the basis that the sealing orders violated their constitutional rights of freedom of expression and freedom of the press, as well as the principle that courts should be open to the public.

Kasirer J found that the sealing orders were properly set aside by the Court of Appeal. The Court upheld the open court principle as protected by the constitutional right to freedom of expression and as an essential feature of our democracy, even though “public scrutiny … can be the source of inconvenience and even embarrassment to those who feel that their engagement in the justice system brings intrusion into their private lives.” (paras. 1, 2 and 3). It said the Sherman Estate had to prove that the information in the court file was “sufficiently sensitive such that it can be said to strike at the biographical core of the individual and, in the broader circumstances, that there is a serious risk that, without an exceptional order, the affected individual will suffer an affront to their dignity” (para 35), but found that the information in the court files was not of such a highly sensitive nature nor was the safety of individuals at serious risk.(para. 36)

Kasirer J further stated (at para. 38):

The test for discretionary limits on presumptive court openness has been expressed as a two‑step inquiry involving the necessity and proportionality of the proposed order (Sierra Club, at para. 53). Upon examination, however, this test rests upon three core prerequisites that a person seeking such a limit must show. Recasting the test around these three prerequisites, without altering its essence, helps to clarify the burden on an applicant seeking an exception to the open court principle. In order to succeed, the person asking a court to exercise discretion in a way that limits the open court presumption must establish that:

(1) court openness poses a serious risk to an important public interest;

(2) the order sought is necessary to prevent this serious risk to the identified interest because reasonably alternative measures will not prevent this risk; and,

(3) as a matter of proportionality, the benefits of the order outweigh its negative effects.

Only where all three of these prerequisites have been met can a discretionary limit on openness — for example, a sealing order, a publication ban, an order excluding the public from a hearing, or a redaction order — properly be ordered. This test applies to all discretionary limits on court openness, subject only to valid legislative enactments (Toronto Star Newspapers Ltd. v. Ontario, 2005 SCC 41, [2005] 2 S.C.R. 188, at paras. 7 and 22).

Kaiser J dismissed the appeal, finding (at para. 107}:

The conclusion that the Trustees have failed to establish a serious risk to an important public interest ends the analysis. …

Rule 302(b)

Cases

Cedar Ridge Construction Ltd. v. The Queen, [1983] CTC 404 (FCTD)

Failure to commence the action through a solicitor as provided by Rule 300(2) was characterized as a mere irregularity, rather than something rendering the proceeding a nullity. The Court exercised its discretion under Rule 302(b) by temporarily staying the action until the plaintiff appointed a solicitor.

Rule 303

Articles

Brooke Sittler, "Review of Penalty and Interest Relief Requests Under the Income Tax Act", 2015 CTF Annual Conference paper

AG as respondent (p. 42:4)

The proper name of the respondent on an application for judicial review of a taxpayer relief decision under subsection 220(3.1) is "Attorney General of Canada". Rule 303 of the Federal Courts Rules provides that when there are no persons that can be named that are directly affected by the order sought in the application, the applicant shall name the Attorney General of Canada as a respondent. ...

Rule 306

Articles

Brooke Sittler, "Review of Penalty and Interest Relief Requests Under the Income Tax Act", 2015 CTF Annual Conference paper

Filing with application records (p. 42:5)

Another example of a paper-saving measure is found in rules 306 and 307, recently amended so that the parties no longer have to file their supporting affidavits and documentary exhibits prior to filing their application records. The parties only have to provide proof of service of those documents, whereupon the documents are deemed to be filed. ...

Rule 313(2)

Cases

In re Cochrane, [1984] CTC 291 (FCTD)

Notices should be mailed under "double registration" so that receipt of the envelope can be established by an arrival receipt card.

Rule 317

Cases

Humane Society of Canada Foundation v. Canada (National Revenue), 2018 FCA 66

Rule 317 applications cannot be used for fishing expeditions

The applicant, which had already received a tribunal record of more than 1500 pages, as well as 1907 pages under an Access to Information Act request, submitted that it was entitled to additional disclosure under Rule 317 on the basis that it had alleged, in its notice of appeal, that the Minister was biased and that there was a breach of procedural fairness.

In rejecting this request, Webb JA stated (at paras 8, 12-13):

…[W]hile additional disclosure is warranted when there are allegations of a reasonable apprehension of bias or a breach of procedural fairness, this does not allow a person to engage in a fishing expedition in the hopes of discovering some documents to establish the claim.

…[A] bald assertion of bias is not sufficient and cannot support an order for production of documents to allow the appellant to go on a fishing expedition to see if something can be found to support the allegation of bias.

…Counsel for the appellant was unable to identify any document in the voluminous motion record that could support the allegation of bias. It, therefore, seems clear that the appellant was on a fishing expedition.

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Articles

Brooke Sittler, "Review of Penalty and Interest Relief Requests Under the Income Tax Act", 2015 CTF Annual Conference paper

Request for certified tribunal record (p.42:4)

At the time of filing the notice of application or at a later time, an applicant may make a request pursuant to rule 317 for material relevant to the application that is in the possession of the CRA and not in the possession of the applicant. The request must identify the material requested. This request is often referred to as a request for the certified tribunal record. The certified tribunal record is not to be confused with the application record, which is filed later in the proceedings. The application record is a record that each party must prepare after all of the affidavit material is completed and any cross-examination on affidavits has occurred. The application record includes the party's factum and authorities.

...The courts have confirmed that it is not only the decision letter itself but the entirety of the documentary record that was before the decision maker that is to be examined in the judicial review of a taxpayer relief decision. The Crown's affidavit will set out that documentary record….

Rule 318

Rule 318(4)

Cases

Athletes 4 Athletes Foundation v. Canada (National Revenue), 2020 FCA 41

CRA is ordered to produce any irrelevant material (e.g., re other Foundations) that was before it when rejecting a registration request

Athletes 4 Athletes Foundation (the “Foundation”) appealed from the refusal of the Minister to register the Foundation as a Canadian amateur athletic association (“CAAA”). The grounds set out in the notice of appeal included the Minister’s failure to exercise her discretion reasonably by, among other things, considering “irrelevant information in comparing the [Foundation] to other applicants and existing registered CAAAs.” The issues included whether the Court should make an order under rule 318(4) for further disclosure.

Laskin JA rejected the Foundation’s submission that Rule 350, which makes Rules 317 and 318 (respecting “material relevant to an application that is in the possession of [the subject] tribunal”) applicable to appeals “with such modifications as are necessary,” required those Rules to be interpreted more broadly in the context of appeals than in the context of applications for judicial review, stating (at para. 21):

On their plain and ordinary meaning, the words “with such modifications as are necessary” do not call for a different substantive application of rules 317 and 318 in appeals.

Thus, Rule 317, as modified by Rule 350, merely required CRA to produce the documents which were in the hands of the decision-maker when the decision was made – and not to provide other requested documents (e.g., the constating documents of all registered CAAAs at the time of the decision).

However, the affidavit of the CRA decision maker stated that “all relevant materials upon which the CRA relied … have been produced” (para. 27).

Laskin JA stated (at paras. 28-29):

The affidavit evidence does not foreclose the possibility that the Minister used irrelevant material relating to the other entities. At a minimum, it does not foreclose the possibility that irrelevant material of this kind was before the Minister when the decision was made. …

[G]iven the grounds of appeal and the purpose of rules 317 and 318, the Minister should be required to produce any material apart from that already disclosed that was before her when the decision was made, with the exception of properly redacted information. I will make an order accordingly.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 172 - Subsection 172(3) - Paragraph 172(3)(a) Minister required to produce any irrelevant material (e.g., on other Foundations) before her in her decision 197

Subsection 318(1)

Cases

Rémillard v. Canada (National Revenue), 2020 CF 1061

the certified Federal Court record is open to the public absent a specific confidentiality order

The taxpayer was a retired businessman living in Barbados whose residency had been under review by CRA since 2015, which had issued various information requests to other countries’ tax authorities, which the taxpayer sought to challenge through judicial review. After filing his judicial review, he requested the certified record contemplated by Federal Court Rules (“FCR”) 317 and 318). A short while later, a journalist contacted the taxpayer and his children to inquire about the application. The taxpayer immediately obtained a judicial provisional confidentiality order, which was followed by the subject motion for a declaration that, as a general rule, material communicated in accordance with Rule 318 did not form part of the public court file, but was rather akin to documents produced on discovery so as to be subject to an implied undertaking of confidentiality. Before concluding that there were significant differences between discovery procedures and the communication of the certified record, and that the latter was not subject to the implied undertaking rule, Pamel J first indicated (at paras. 20, 38, TaxInterpretations translation):

[T]he reason the certified court record is “transmitted” and not “filed” is to allow the parties to subsequently file, as part of their respective records pursuant to sections 309 and 310 of the FCR, only those documents "that are to be used by [the parties] at the hearing". While transmission under s. 318 of the FCR does not, in and of itself, permit documents to become part of the evidentiary record immediately, this does not mean that such documents, upon receipt by the Registry, do not form part of the record of the Court. Both types of records are subject to the same rules regarding public accessibility, namely sections 23 and 26 of the FCR. …

Just because the documents are not part of the evidentiary record does not mean that they are not part of the Court record and, it should be recalled, it is the documents in the Court record that are subject to the open court principle.

Regarding the open court principle, he referred (at para. 27) to the observation in Sierra Club, 2002 SCC 41, at para. 36 that “[t]he link between openness in judicial proceedings and freedom of expression has been firmly established by this Court,” and stated (at paras. 30-31):

Section 26 of the FCR is clear. The open court principle allows any person to inspect a court record and any annex "that is available to the public" … .

While the general rule is that documents in a court file or annex are public, not all documents in the court file or annex are necessarily "available to the public". Documents or material that are treated as confidential under a rule of law or that are subject to a confidentiality order of the Court continue to be treated as confidential and are designated as such at the time of filing with the Court, identifying the relevant rule of law or court order, if any (s. 152(1) FCR). Otherwise, the FCR do not provide a mechanism for recognizing the confidentiality of documents "in the possession of the Registry".

Pamel J dismissed the motion to declare the entire certified record confidential. However it remained open to the taxpayer to make a motion for a confidentiality order in accordance with the usual Sierra Club criteria. He also suspended the judgment for 60 days to allow the taxpayer to appeal the decision to the Federal Court of Appeal and seek a new provisional confidentiality order there.

Locations of other summaries Wordcount
Tax Topics - Other Legislation/Constitution - Federal - Federal Courts Rules - Rule 26 - Subsection 26(1) open court principle applied in finding that the certified Federal Court record is open to the public absent a specific confidentiality order 369
Tax Topics - Other Legislation/Constitution - Charter (Constitution Act, 1982) - Section 8 public access to the certified court record in a judicial review application did not entail an unreasonable search or seizure 434

Rule 319(1)

Cases

Stephens v. The Queen, 84 DTC 6169 (FCTD)

If it is sought to challenge the validity of some assessments on the same ground that other assessments, respecting the same taxpayers for different taxation years or related taxpayers for the same taxation years, are being challenged on a motion under Rule 474, the appropriate procedure is to apply to amend pleadings under Rule 420 rather than bringing separate originating notices of motion.

Locations of other summaries Wordcount
Tax Topics - General Concepts - Evidence 19

Rule 324

Cases

The Queen v. Muir, 85 DTC 5038, [1985] 1 CTC 26, [1985] 1 CTC 27 (FCTD)

"[T]here is no procedure or rule of practice whereby the court can properly entertain an ex parte motion in writing except by consent of the parties or in accordance with the provisions of Rule 324 or by virtue of the limited, inherent discretion accorded by sub-rule 326(2)(c)."

In re Athenian Construction Ltd., 81 DTC 5352 (FCTD)

An application for an order that debts owing to the taxpayer be attached should be made pursuant to Rule 2300 rather than Rule 324.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 223 - Subsection 223(1) 43

In re McKeen (1984), docket T-2952-82 (FCTD)

A motion should not be disposed of under Rule 324 where it is clear that the "many inaccuracies in the application and supporting material, including [a] draft judgment which cannot be granted in the form sought without further supporting information, are not susceptible of ready and expeditious solution by correspondence."

Rule 332(1)

Cases

Can-Am Industrial Auctioneers Inc. v. Rompkey, 84 DTC 6151, 82 DTC 6255, [1982] CTC 302 (FCTD)

An affidavit which referred to "the search and seizure made by the servants of the defendants (the whole as appears in the statement of claim filed in this case and attached hereto, to have effect as if stated at length)" did not have the effect of transmuting allegations in the statement of claim into sworn statements.

In re Romeo's Place Victoria Ltd., 81 DTC 5295, [1981] CTC 380 (FCTD)

A proceeding pursuant to ss.232(4) and (5) was final in nature, and portions of a Department employee's affidavit based on information and belief rather than personal knowledge therefore were not admissible. However, even if information and belief were admissible, the requirements of that part of Rule 332(1) were not met by bald statements that "as a result of my inquiries" certain factual conclusions had been reached without specifying the source of the information.

Rule 332(5) [Affidavits]

Cases

Richard v. MNR, 88 DTC 6239, [1988] 1 CTC 388 (FCTD)

It was found that because the applicants alleged that a Revenue Canada officer knew more than he stated in his information and since they wished to cross-examine him on all matters leading up to the application for the search warrants, they wished to proceed on a fishing expedition. An application to cross-examine was denied.

Rule 334.16(1)

Cases

Rae v. Canada (National Revenue), 2015 FC 707

not certified based on class definition and litigation plan deficiencies

The applicant participated in a widely-marketed gifting tax shelter in 2013. CRA put on hold the assessment of all 2013 returns claiming a credit under the gifting tax shelter in which the taxpayer participated, along with three others until it had audited those tax shelters.

The applicant was unsuccessful in having a class action certified for all the resident participants in the four tax shelters who had filed 2013 returns, not provided a waiver to the Minister and who had not been assessed based on their returns not having been assessed with due dispatch.

The exclusion of taxpayers assessed before the hearing was "illogical or arbitrary" as they "share[d] the same interest in the resolution of the common issue" (para. 57): Rule 334.1.6(1)(b). Furthermore, unanswered questions about possible third-party funding of the applicant raised "concerns about the person who is actually controlling the litigation" (para. 76) and there were deficiencies in the applicant's litigation plan including three alternative described methods for notification of other class members, and the specification of an hourly rate for counsel which was insufficient for individual class members to determine the monthly amounts payable by them (paras. 81, 83): Rule 334.16(1)(e).

Rule 337(2)(b)

Cases

Dym v. The Queen, 79 DTC 5362, [1979] CTC 442 (FCTD)

A judgment is a separate document which should contain "within its four corners the terms of the judgment sought without resort to extrinsic material." A consent judgment was interpreted without regard to the minutes of settlement.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 177 - Paragraph 177(b) 45

Rule 337(6)

Cases

Sturgess v. The Queen, 84 DTC 6525 (FCTD)

A judgment, which reduced the calculated amount of a s. 163(1) penalty on the basis that the calculated amount did not take into account an instalment payment which previously had been made, was corrected after considering an affidavit which demonstrated that the instalment payment had indeed been credited in the year it was paid prior to the addition of penalties.

Rule 341 [Judgment on Admissions]

Cases

The Queen v. Gary Bowl Ltd., 74 DTC 6401, [1974] C.T.C 457 (FCA)

"[W]hen the material facts are clearly admitted and the result of the application of the law to them is not in doubt so that it is apparent that a plaintiff is entitled ex debito justicia to the relief which he claims in the action or that a defendant is entitled to judgment dismissing the action against him, as the case may be, a motion under Rule 341 is an appropriate procedure to obtain such relief immediately in lieu of allowing the action to proceed to trial which in the end can have no other result."

Rule 344(1) [Costs]

Cases

The Queen v. Lagiorgia, 87 DTC 5378, [1987] 2 CTC 151 (FCA)

Where a party is seeking a lump sum for costs in lieu of the amounts provided by the tariff, counsel would normally have the obligation of showing to the Court what the tariff amounts would have been. In addition, if it is alleged that an unusual volume of work was done, an affidavit should be filed to support this allegation.

Farmer Construction Ltd. v. The Queen, 84 DTC 6331, [1984] CTC 370 (FCTD)

"[S]olicitor and client costs should be reserved for situations in which a party causes litigation to be necessary by irresponsibility or intransigence."

Smith v. The Queen, 84 DTC 6164, [1984] CTC 105 (FCTD)

It was determined that the taxpayers were substantially successful in an action concerned with the V-Day values of lands, by comparing the final results with the values contained in the Minister's assessments (and pleadings). Since the federal court proceedings were a trial de novo, it was irrelevant that the taxpayers had fared even better before the Tax Review Board. Therefore, they were entitled to costs.

The Queen v. Pongratz, 82 DTC 6200, [1982] CTC 259 (FCA)

A trial judge has no authority to award costs against a successful plaintiff where what is being punished by this award is not the conduct of the lawsuit, but conduct which occurred prior to the commencement of the litigation.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 163 - Subsection 163(1) 77

Rule 344(7)

Cases

Salt v. The Queen, 85 DTC 5055, [1985] 1 CTC 57 (FCTD)

"The normal rule is that a successful party is entitled to costs on a party and party basis in accordance with the prescribed tariff. The length or complexity of a case or the volume of work required in connection therewith are not sufficient factors by themselves to warrant a special direction as to costs under Ruler 344(7)".

Smith v. The Queen, 84 DTC 6164, [1984] CTC 105 (FCTD)

The plaintiff was unable to establish that the action had been a test case, and the volume of preparatory work performed in this case did not by itself justify an order for increased costs.

Carruthers v. The Queen, 83 DTC 5076, [1983] CTC 15 (FCTD)

Where an intricate and difficult question of the valuation of shares was involved, a reasonable fee for services may be allowed respecting the plaintiff's valuation expert even thought the reasons for judgment indicated a preference for the valuation approach of the defendant's expert. It is best that such costs be moved for promptly.

Rule 346

Cases

McKesson Canada Corporation v. Canada, 2014 FCA 290

long factums are bad advocacy

Stratas JA allowed the taxpayer to amend its notice of appeal to raise a complaint about the trial judge improperly commenting on its factum (see summary under Federal Court Rule 75). Regarding the 29-page draft memorandum that the taxpayer submitted with the motion, Stratas JA suggested that the panel would be "best assisted" by no more than 20. He stated (at paras. 23-24):

Unnecessarily lengthy, diffuse submissions are like an unpacked, fluffy snowball. …

Structures that lead to repetition, over-elaboration of arguments, block quotations, and rhetorical flourishes make submissions diffuse. Simple but strategic structures, arguments presented only once and compactly, tight writing that arranges clinical details in a persuasive way, and short snippets from authorities only where necessary make submissions highly focused. The former dissipates the force of the argument; the latter concentrates it.

Locations of other summaries Wordcount
Tax Topics - Other Legislation/Constitution - Federal - Federal Courts Rules - Rule 75 amendment allowed to address allegation that trial judge's commenting on appeal memorandum was improper 207

Rule 351

Cases

Canada v. Pomeroy Acquireco Ltd., 2020 FCA 221

Crown could adduce fresh evidence after a TCC motion even with something of a failure to have introduced this before the TCC

The Tax Court dismissed the appellant’s motion to amend its reply to the notice of appeal to add an allegation that a loan in issue was a sham, on the grounds that such addition would be unfair as the taxpayer’s principal (Mr Pomeroy) had now died. The appellant now moved under Rule 351 for leave to present fresh evidence, namely, the entirety of the transcript of Mr. Pomeroy’s 2018 discovery, on the basis that it would demonstrate that he had little knowledge of the transactions in question, and therefore he could not have given evidence of importance.

Before allowing the admission of the transcript, Locke JA found (at para. 5) that the four tests enunciated in Coady (2019 FCA 102) were satisfied, other than the first:

[T]he party seeking to adduce fresh evidence [must] establish that the evidence: (1) could not have been adduced at trial with the exercise of due diligence; (2) is relevant in that it bears on a decisive or potentially decisive issue on appeal; (3) is credible in the sense that it is reasonably capable of belief; and (4) is such that, if believed, could reasonably have affected the result in the court below… .

Regarding the failure to satisfy the first test, Locke JA noted that the Crown did not become aware of the relevance of the additional evidence until six days before the hearing of the Tax Court motion, at which point there was no established procedure for introducing such evidence – but nonetheless found (at para. 14) that he was “not convinced that the appellant could not have sought, and possibly obtained, leave to put the evidence before the Tax Court.”

In nonetheless allowing the new evidence, he stated (at paras. 21, 24):

… I am conscious that the motion before the Tax Court was an interlocutory matter, and the respondent’s opportunity to adduce this evidence was limited because of the absence of a clear procedural mechanism for doing so. Leave might have been sought at, or shortly before, the hearing before the Tax Court to adduce the New Evidence, but such a request would have been irregular and might well have been unsuccessful.

On balance, and having regard for the limited opportunity the respondent had for putting forward the New Evidence before the Tax Court, I find that the interests of justice require that the Court exercise its discretion to admit the New Evidence.

Rule 355(4)

Cases

Lipsey v. MNR, 85 DTC 5080, [1984] CTC 675 (FCTD)

Where the substance of allegations in a request for relief is that there have been acts constituting contempt of court, then the procedures set out in Rule 355 must be followed.

Rule 401(c)

Cases

Usarco Ltd. v. A.G. Canada, 80 DTC 6308, [1980] CTC 484, 80 DTC 6381 (FCTD)

Rule 401 is available to test the jurisdiction of the Court ratione materiae as well as ratione personae.

Rule 408(1)

Cases

The Queen v. Imperial General Properties Ltd., 85 DTC 5045, [1985] 1 CTC 39, [1985] 1 CTC 40 (FCA)

When the pleader states the material facts, he need not state the legal result. Since the appellant had pleaded the whole of an agreement, she was not precluded from raising in court the argument that the agreement was unenforceable by virtue of the Statute of Frauds.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 12 - Subsection 12(1) - Paragraph 12(1)(a) s. 12(1)(a)(i) inapplicable to deposits 49
Tax Topics - Income Tax Act - Section 12 - Subsection 12(1) - Paragraph 12(1)(b) balance of purchase price did not become receivable until condition precedent satisfied 96
Tax Topics - Income Tax Act - Section 9 - Timing 44

Woodbine Developments Ltd. v. The Queen, 84 DTC 6556, [1984] CTC 616 (FCTD)

For a purchase to be subject to the doctrine of secondary intention, "'The purchaser must have in his mind at the moment of purchase the possibility of reselling as an operating motivation for the acquisition.'" The Crown fully satisfied the requirement of pleading secondary intention, by stating in its Statement of Claim that: "'An operating motive for the acquisition of the properties ... was for the resale of same at a profit.'"

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

The Crown was precluded from contending for the first time, at the end of trial, that s. 12(1)(a) was applicable to reimbursements of capital costs of pipelines, where there had been a failure to plead s. 12(1)(a) together with facts that would disclose why that provision of the Income Tax Act was applicable.

The Queen v. Littler, 78 DTC 6179, [1978] CTC 235 (FCA)

"[W]hen a cause of action is to be supported on the basis of a statutory provision, it is elementary that the facts necessary to make the provision applicable be pleaded (preferably with a direct reference to the provision) so that the opposing party may decide what position to take with regard thereto ... [I]t is no mere 'technicality', but a matter of elementary justice to abstain, in the absence of very special circumstances, from drawing inferences from evidence adduced in respect of certain issues in order to make findings of fact that were not in issue during the course of the trial."

Rule 413(1)(a)

Cases

Fraser Companies, Ltd. v. The Queen, 81 DTC 5051, [1981] CTC 61 (FCTD)

Paragraph 15 of the Statement of Claim, which was admitted in the Defence, alleged that the plaintiff made a loan to a second company ("Paper") of $10,000,000 secured by a promissory note. The defendant thereby conceded that the relationship between the plaintiff and Paper was that of lender and borrower. The defendant's contention that s. 56(2) which does not apply to loans, should govern this transaction accordingly failed.

Rule 419(1)(a) [Striking out Pleadings]

Cases

The Queen v. Riendeau, 87 DTC 5379, [1987] 2 CTC 150 (FCTD)

A motion to strike pursuant to Rule 419(1)(a) "should not be used when there are arguable questions of fact or law; it is only appropriate to grant such a motion when it is clear beyond all reasonable doubt, from the fact of the pleadings, that the plaintiff's claim can not succeed."

Rule 420 [Amendment of Pleadings]

Cases

The Queen v. Mohawk Oil Co. Ltd., 92 DTC 6135, [1992] 1 CTC 195 (FCA)

The Crown would have been precluded from advancing in the Federal Court of Appeal for the first time at argument that a portion of the damages award was an eligible capital amount.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 13 - Subsection 13(21) - Proceeds of Disposition 70
Tax Topics - Income Tax Act - Section 9 - Compensation Payments damages received both for breach re depreciable property and lost profits 70

The Queen v. McLeod, 90 DTC 6281, [1990] 1 CTC 433 (FCTD)

The Minister reassessed the taxpayer on the ground that the taxpayer was precluded from reporting losses under s. 28(1) because he has not engaged in the business of farming. Collier J. dismissed a motion brought by the Crown to amend its Statement of Claim by deleting a statement that the Minister had assumed in assessing the taxpayer that the taxpayer was not engaged in the business of farming, and by inserting a new assumption that the taxpayer's chief source of income was neither farming, nor a combination of farming and other income (which was relevant to the Minister's claim that the deduction of farming losses by the taxpayer was restricted by s. 31(1)). Collier J. stated that to allow the motion would "be tantamount to allowing the Minister to appeal his own assessment, a notion which has been specifically been rejected by the courts" (p. 6286) and added (p. 6286):

"The proposed amended statement of claim restricts the plaintiff's pleadings to a different issue than the one which formed the basis of the assessment. Despite the fact that the defendant is not taken by surprise by this issue, the plaintiff is bound by its assessment and should not be permitted to change it at this late stage."

DeConinck v. The Queen, [1985] 1 CTC 36 (FCTD)

"The scope and intendment of the Rule is clearly to the effect that any pre-trial amendment shall be allowed where necessary for the purpose of determining the real question in controversy between the parties, but upon terms designed to protect the parties with respect to discovery and preparation for trial". An amendment was allowed where there was nothing to indicate that the amendment could cause serious prejudice to the other side, and any inconvenience occasioned thereby could be compensated by costs.

The Queen v. Chrapko, 84 DTC 6544, [1984] CTC 594 (FCTD), rev'd 88 DTC 6487, [1988] 2 CTC 342 (FCA)

The failure of the Minister to identify s. 67 in his re-assessment, in his pleadings or in his examination for discovery is a basis for disallowing an employee's travelling costs precluded the Minsiter from later invoking s. 67.

Rule 433

Cases

Laird v. The Queen, 87 DTC 5142 (FCTD)

The grant of judgment in default of defence is discretionary.

Rule 440 [Want of Prosecution]

Cases

Murphy v. The Queen, 87 DTC 5375, [1987] 2 CTC 162 (FCTD)

The remedy of dismissing an action for lack of prosecution is a very drastic one and an action should be dismissed for procedural reasons only in the clearest of cases. Here, the two circumstances that saved the action (which had been commenced in 1977) were (1) that the prejudice to the defence which resulted from the delay related to the issue of damages, and the issues of liability and damages could be tried separately (counsel having said that he could go to trial on the question of liability by December 1987), and (2) the plaintiff had recently retained new counsel and there was reason to accept the theory that the previous delays were due to the difficulties the plaintiffs had with their former counsel.

Rule 448(1)

Cases

The Queen v. Special Risks Holdings Inc., 83 DTC 5046, [1983] CTC 36 (FCA)

Where the issue, as revealed by the pleadings, in an action was whether corporation 1 was controlled at the relevant time by the respondent or by corporation 2, it should be ordered that the following documents be listed as "relating to any matter in question in the cause": (1) documents relating to negotiations between the respondent and corporation 3 as to the acquisition of corporation 1's shares, it being assumed for this purpose that there had been transactions between the respondent, corporation 3 and corporation 2 concerning corporation 1's shares; and (2) documents and agreements between corporation 3 and the respondent respecting control of corporation 2.

Locations of other summaries Wordcount
Tax Topics - General Concepts - Tax Avoidance 91

Rule 455 [Discovery]

Cases

Roseland Farms Ltd. v. The Queen, 90 DTC 6512, [1990] 2 CTC 348 (FCTD)

In an action where the issue was whether a corporation controlled by an unidentified non-resident shareholders had realized a gain on the disposition of real estate on income or capital account, and where the plaintiff pleaded that in the year in which the company wished to sell its holdings its principal shareholder could not come to Canada, the Crown was entitled to disclosure of the identity of such shareholders.

Rule 465(1)(b)

Cases

Indalex Ltd. v. The Queen, 84 DTC 6018, [1984] CTC 51 (FCTD), aff'd on other grouns 84 DTC 6492, [1984] CTC 373 (FCA)

aff'd on other grounds 84 DTC 6492, [1984] CTC 373 (FCA)

The Ontario case law, to the effect that a former employee may not be examined unless he resigned expressly for the purpose of avoiding examination, is applicable.

Rule 465(1)(c)

Cases

Smith v. The Queen, 81 DTC 5351, [1981] CTC 476, 81 DTC 5344 (FCTD)

The Court ordered the examination for discovery of a departmental officer of the Ministry of National Revenue who prepared an appraisal which was a major factor in the Department's position on the V-Day value of the taxpayer's real estate.

Rule 465(15)

Cases

Indalex Ltd. v. The Queen, 84 DTC 6018, [1984] CTC 51 (FCTD), aff'd on other grouns 84 DTC 6492, [1984] CTC 373 (FCA)

The plaintiff's officer was under an obligation to make reasonable inquiries of related parties. Where such inquiries had been made and had been met by a refusal to provide any assistance or information, no order for further examination under Rule 465(19) was made.

Carruthers v. The Queen, 82 DTC 6009, [1982] CTC 5 (FCTD)

Questions by the plaintiff taxpayer, to a valuator who had been retained by the Minister to value shares, concerning the details of the valuation performed by him were permitted. (The defendant objected because the valuator's answers tended to disprove the defendant's contentions as to the valuation day value of the shares in question).

Rule 465(19)

Cases

The Queen v. Indalex, 84 DTC 6492, [1984] CTC 373 (FCA)

An application under Rule 465(19) for a second discovery was premature because it was launched prior to the completion of the original discovery under Rule 465(1)(b).

Indalex Ltd. v. The Queen, 84 DTC 6018, [1984] CTC 51 (FCTD), aff'd on other grouns 84 DTC 6492, [1984] CTC 373 (FCA)

The Federal Court does not have the authority to compel an individual non-resident who is not a party to the action to submit to examination for discovery.

Lipper v. The Queen, 80 DTC 6248 (FCTD)

Rule 465(19) "is not limited to the re-examination of a witness already examined for discovery, nor apparently to an employee or agent of a party." The taxpayer, who had purchased a 1/88 interest in a movie limited partnership in respect of which some of his capital cost allowance claims had been disallowed, stated on examination for discovery that he was unable to answer the questions of the Crown concerning the potential profitability of the films which the limited partnership had purchased, and Walsh, J., ordered that the movie promoter ("Shosteck") who had sold the films be examined for discovery. Walsh J. stated:

"[I]t would appear that Shosteck is in possession of highly pertinent information which the plaintiff Lipper cannot or will not provide and that his examination for discovery may be very useful in giving necessary factual information to assist in the final determination of the issues. While not a party to the action he is hardly a disinterested third party, and his examination is not in the nature of a fishing expedition."

Rule 469

Cases

In re Gastel, 82 DTC 6043, [1982] CTC 61 (FCTD)

"An interim and interlocutory injunction pursuant to Rule 469 can only be sought in an action, that is aproceeding commenced by Statement of Claim", and a Court file that was opened by the filing of a s. 223 certificate is not an action. Nonetheless, an order staying indefinately the sale of goods seized under a writ of fi fa was granted.

Rule 474

Cases

Wright v. The Queen, 87 DTC 5138, [1987] 1 CTC 218 (FCTD)

"Rule 474 can only be used where (1) all the essential facts are admitted, (2) the question is one of law and (3) the decision to be rendered is likely to finally dispose of the matter or at least a substantial part of the action. The procedure is only appropriate where there is consensus between the parties and the Court on the need for preliminary determination."

Rule 482

Cases

Yager v. The Queen, 85 DTC 5494, [1985] 1 CTC 89 (FCTD)

A valuation report was sufficiently detailed since it would have permitted a court, in the absence of dispute, to adopt it and derive guidance from it in determining the valuation question in issue.

Locations of other summaries Wordcount
Tax Topics - General Concepts - Fair Market Value - Shares 64

Rule 483(4)

Cases

Special Risks Holdings Inc. v. The Queen, 84 DTC 6054, [1984] CTC 71 (FCTD), aff'd 84 DTC 6215, [1984] CTC 563 (FCA)

"It is inherent in the good faith application of the Rule that further discoveries of documents will not be sought or further investigations made thereafter, save in preparation for trial, but not of a nature to require postponement of same." A motion for further discovery that was filed only 6 days before the day that had been set for trial, and which consequently would have delayed the trial if successful, was dismissed as being an abuse of the process of the Court.

Locations of other summaries Wordcount
Tax Topics - General Concepts - Abuse of Process extremely late motion for further discovery 83
Tax Topics - Income Tax Act - Section 231.2 42

Rule 1102(1)

Cases

The Queen v. Optical Recording Corp., 87 DTC 5248 (FCA)

The discretion to receive evidence "should be exercised only if the Court is satisfied that the evidence was not discoverable before the end of trial by reasonable diligence and that the evidence is wholly creditable and practically conclusive on an issue in the action".

Rule 1104(1)

Cases

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

On appeal the Crown was precluded from raising for the first time in the action an argument that capital cost reimbursements were income in the hands of the taxpayer, because the Court of Appeal was not satisfied beyond a reasonable doubt that all the requisite evidence that might bear on this argument had been adduced at trial to enable the taxpayer to rebut this argument. In fact, counsel for the taxpayer stated that if he had understood from the pleadings that this argument would be raised, he would have called expert accounting evidence to support his client's treatment of the reimbursements as contributed capital.

Rule 1211(1)

Cases

Lipsey v. MNR, 85 DTC 5080, [1984] CTC 675 (FCTD)

A discontinuance is valid and operative, at the latest, at the time of service of the notice of discontinuance.

Rule 1718(3)

Cases

The Queen v. Central Tobacco Mfg. (1980), Ltd., 85 DTC 5300, [1985] 1 CTC 357 (FCTD)

It was determined that it was not desirable to separate the principal action, which concerned amounts due under the Excise Tax Act, from the counterclaim, which was devoted to damages for the seizing of the defendant's assets in an attempt to secure payment of the amount assessed and penalty, since to do so would require duplication of some of the evidence.

Rule 2104

Cases

In re Benk Development Ltd., 79 DTC 5320 (FCTD)

At common law, as well as under the Rules, a sheriff may not seize book or other unsecured debts under a writ of fi. fa.

Rule 2400

Cases

In re Beaudry, 79 DTC 5234 (FCTD)

Rule 2400 is intra vires the regulatory power conferred on judges of the Federal Court by s. 46 of the Federal Court Act.