http://decisions.fca-caf.gc.ca/fca-caf/decisions/en/item/229681/index.do
Struck v. Canada (April 3, 2017 – 2017 FCA 69, Nöel C.J., Webb (author), Woods JJ.A.).
Précis: Mr. Struck was assessed in respect of the disposition of shares and real property to his son. He appealed to the Tax Court. Subsequently he entered a settlement with the Crown which specified the amounts of both the gain on the disposition of the shares and the real property. His appeal to the Federal Court of Appeal was ultimately confined to his allegation that he was entitled to a reserve on the disposition of real property under section 40 which was not allowed on the consent judgment. The Court of Appeal held that he was not entitled to appeal from the consent judgment where he had agreed on the amount of the gain on the real property and had not claimed any amount for a reserve on that settlement. As a result the appeal was dismissed with costs.
Decision: Ultimately the decision of the Court of Appeal was not complex:
[19] As a result of this section, the gain from the disposition of a property, for the purposes of the ITA, will reflect any reserve that a particular taxpayer is entitled to claim and chooses to claim. The combined effect of sections 38, 39 and 40 of the ITA, is that by agreeing to a particular amount as the taxable capital gain, Mr. Struck was also agreeing to the capital gain (which is simply two times the amount of the taxable capital gain and which was also identified in the Consent to Judgment), but more importantly for the purposes of this appeal, Mr. Struck was also agreeing to the amount of the gain, which was determined without any claim for a reserve. If a reserve were to now be claimed, the amount of the gain for 2005 from the dispositions of the properties would be reduced which would also reduce the capital gain and the taxable capital gain for 2005, since these amounts are simply the amount of the gain and one-half of that amount, respectively. Since the amount of the taxable capital gain has been conclusively determined by the Tax Court, Mr. Struck is precluded from advancing an appeal that would change this amount and the Tax Court Judge did not commit any error in quashing his appeal in relation to this claim for a reserve.
As a result the appeal was dismissed with costs.