T-1413-77
Donald D. Tucker (Plaintiff)
v.
The Queen (Defendant)
Trial Division, Mahoney J.—Ottawa, October 12,
1978.
Income tax — Practice — Assessment for 1971, 1972 and
1973 taxation years appealed pursuant to subsec. 165(1) —
Three notices of objection filed but treated as single document
— Letter accompanying notices of objection invoking para.
165(3)(b) not filed — Three separate statements of defence
filed — Agreement reached after discovery — Court asked to
give effect to agreement by granting three consent judgments
— Procedural difficulties corrected by the Court — Income
Tax Act, S.C. 1970-71-72, c. 63, ss. 165(1),(3), 175(1),(3).
Plaintiff appealed the assessment of his 1971, 1972 and 1973
income tax returns using the form prescribed in subsection
165(1). In transmitting the notices of objection, plaintiff's
counsel, in a covering letter, stated that he had been instructed
to appeal to the Federal Court and to waive reconsideration by
the Minister, and indicated that those provisions of the letter be
considered part of the three notices of objection. The three
notices of objection were filed by the Deputy Attorney General,
but notwithstanding section 175, were treated as a single
document. The letter of transmittal, invoking paragraph
165(3)(b), was not filed. The defendant then filed three sepa
rate statements of defence. After examinations for discovery,
defendant accepted plaintiff's position. The Court is now
requested to grant three separate consent judgments in the
same action allowing the appeal in each year without costs.
Held, the three separate consent judgments are granted but
the procedural deficiencies are such that the Court does not
want the record of this action to stand as a precedent for those
taxpayers wishing to avail themselves of paragraph 165(3)(b)
of the Income Tax Act. The Court orders nunc pro tune that
each of the notices of objection be treated as originating a
separate action. Paragraph 165(3)(b) requires that the proce
dure be initiated by an indication "in the notice of objection";
that request is an essential prerequisite to the commencement
of an action in this fashion and must be included in the
documentation filed for that purpose. The Court, therefore,
orders nunc pro tune that counsel's letter be filed as part of the
notice of objection. Subsection 175(3) imposes on an appeal
commenced in this fashion the same requirements of the Rules
of Court as apply when it is commenced by statement of claim.
ACTION.
COUNSEL:
James R. Chalker, Q.C. for plaintiff.
John R. Power for defendant.
SOLICITORS:
Chalker, Green & Rowe, St. John's, for
plaintiff.
Deputy Attorney General of Canada for
defendant.
The following are the reasons for order ren
dered in English by
MAHONEY J.: While I have no wish to impede
the parties giving effect to the settlement they
have reached in this matter, the procedural defi
ciencies are such that I should not want the record
of this action to stand as a precedent for those
taxpayers wishing to avail themselves of paragraph
165(3)(b) of the Income Tax Act, S.C. 1970-71-
72, c. 63.'
By three notices of objection, the plaintiff
appealed the assessment of his 1971, 1972 and
1973 income tax returns using the form prescribed
by subsection 165(1). In transmitting the notices
of objection, the plaintiff's counsel, in a covering
letter, stated:
We have been further instructed by our client to advise you
that he wishes (a) to appeal immediately to the Federal Court
and (b) to waive reconsideration by the Minister of the three
above-mentioned Reassessments. For the purposes of Section
165(3)(b) of the Income Tax Act, please consider the foregoing
provisions of this paragraph as being part and parcel of the
three enclosed Notices of Objection.
The three notices of objection were filed in the
Court's Registry by the Deputy Attorney General
of Canada on the Minister's behalf. They were,
' 165. (1) A taxpayer who objects to an assessment under
this Part may, within 90 days from the day of mailing of the
notice of assessment, serve on the Minister a notice of objection
in duplicate in prescribed form setting out the reasons for the
objection and all relevant facts.
(3) Upon receipt of a notice of objection under this section,
the Minister shall,
(b) where the taxpayer indicates in the notice of objection
that he wishes to appeal immediately ... to the Federal
Court and that he waives reconsideration of the assessment
and the Minister consents, file a copy of the notice of
objection ... in the Registry of the Federal Court ...
and he shall thereupon notify the taxpayer of his action by
registered mail.
notwithstanding the provisions of section 175 2
treated as a single originating document. The
letter of transmittal, invoking paragraph
165(3)(b), was not filed.
The defendant then filed three separate state
ments of defence. To his credit, a deputy clerk of
process did note the peculiarity of the same
defendant filing three statements of defence in the
same action. Unfortunately, he accepted counsel's
assurances as to its propriety.
Examinations for discovery ensued with the
result that the defendant now accepts the plain
tiff's position. The Court is now asked to grant
three separate consent judgments in the same
action allowing the appeal in each year without
costs.
Plainly each of the notices of objection ought to
have been treated as originating a separate action.
I propose to so order nunc pro tunc.
Paragraph 165(3)(b) clearly requires that the
procedure be initiated by an indication "in the
notice of objection". Here it is not so contained
although counsel obviously appreciated that
requirement. While I am not, in the face of Minis
ter's concurrence, prepared to find the plaintiff's
compliance with that requirement insufficient, it
seems that it would be most prudent to include the
2 175. (1) An appeal to the Federal Court under this Act,
other than an appeal to which section 180 applies, shall be
instituted,
(a) in the case of an appeal by a taxpayer,
(ii) by the filing by the Minister in the Registry of the
Federal Court of a copy of a notice of objection pursuant
to paragraph 165(3)(b);...
(3) An appeal instituted under this section shall be deemed
to be an action in the Federal Court to which the Federal Court
Act and the Federal Court Rules applicable to an ordinary
action apply ... except that:
(a) the Rules concerning joinder of parties and causes of
action do not apply except to permit the joinder of appeals
instituted under this section;
(b) a copy of a notice of objection filed in the Registry of the
Federal Court by the Minister pursuant to paragraph
165(3)(b) shall be deemed to be a statement of claim or
declaration that was filed in the Registry of the Federal
Court by the taxpayer and served by him on the Minister on
the day on which it was so filed by the Minister; ...
request in the notice of objection, signed by the
taxpayer, rather than ask that something con
tained in a letter of transmittal, signed by his
counsel, be deemed to be so included. In any case,
that request is an essential prerequisite to the
commencement of an action in this fashion and
must be included in the documentation filed for
that purpose. I therefore propose to order, again
nunc pro tunc, that a copy of counsel's letter of
June 11, 1976, be filed as part of the notice of
objection in each of the actions.
In the circumstances, it is unnecessary for me to
comment on the content of the particular notices
of objection. I do, however, feel it useful to point
out that subsection 175(3) of the Income Tax Act
imposes on an appeal commenced in this fashion
the same requirements of the Rules of Court as
apply when it is commenced by statement of claim.
The prescribed form of notice of objection is not
particularly apt for that purpose. It contains a
considerable volume of immaterial prescribed ver
biage with which the Court must live and about
which the taxpayer can do nothing. The contents
of the "statement of facts and reasons" are, how
ever, entirely within the taxpayer's control. If he
wishes to adopt this procedure, he would be well
advised to have regard to the Rules of Court in
setting forth his facts and reasons. The content
should, for all practical purposes, be the same in
both form and substance as if that portion of the
notice of objection were a statement of claim.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.