http://decisions.fca-caf.gc.ca/fca-caf/decisions/en/item/223729/index.do
Paletta v. Canada (February 13, 2017 – 2017 FCA 33, Pelletier, Rennie, Woods (author) JJ.A.).
Précis: The taxpayer applied in the Tax Court for a Rule 58(1) application to determine whether penalties attributable to neglect, carelessness or wilful default were applicable in his tax appeal. Owen J. of the Tax Court refused the application on the basis that the matter was best determined at trial. The taxpayer appealed to the Federal Court of Appeal which dismissed the appeal from the bench, with costs, finding no reversible error in the decision of Justice Owen.
Decision: Justice Woods made short work of the appeal:
[6] Central to the decision of the Tax Court was the rejection of the appellant’s submission that it would be possible to have a fairly short hearing of the Rule 58 determination. According to the Tax Court reasons at paragraph 32, the statute barred issue required an appreciation of “all of the circumstances surrounding the filing positions taken by the Appellant in his returns for the Taxation Years.” At paragraph 43, the judge concluded that the “Appellant’s suggested approach to the evidence would not provide a fair and just adjudication of the statute-barred issue.” There is no palpable and overriding error in this conclusion.
[7] The appellant also submits that the Tax Court was in error when it stated that the appellant bore part of the burden of proof relating to the correctness of the tax filings. According to the appellant, this error affected the decision because the Tax Court did not appreciate that the preliminary determination could save the appellant time, costs, delays and stress.
[8] The problem with this submission is that the decision of the Tax Court did not turn the onus of proof. The essence of the decision was that the statute barred issue requires detailed evidence, and that the same evidence is also at the heart of the substantive issue.
[9] The appellant also submitted that the Tax Court erred in law in failing to consider all the relevant factors for purposes of Rule 58. The Tax Court did not make any reversible error in this respect. Since the judge rejected the appellant’s approach to the evidence required on the statute barred issue, it was open to him to conclude that proceeding under Rule 58 would not be appropriate.
Accordingly the appeal was dismissed from the Bench with costs.