https://decisions.fca-caf.gc.ca/fca-caf/decisions/en/item/421983/index.do
Tedesco v. Canada (September 20, 2019 – 2019 FCA 235, Nadon, Webb (Author), Woods JJ.A.).
Précis: On a motion of the Crown, the Tax Court struck the appeals of the limited partners of TSI I Limited Partnership (TSI) after the general partner filed a notice of discontinuance on behalf of TSI. The limited partners appealed to the Federal Court of Appeal which allowed the appeal with one set of costs in both the Tax Court and the Court of Appeal.
Decision: The Court of Appeal held that there was nothing abusive about allowing the limited partners to continue their appeals:
[29] In this particular case, TSI had raised the issue of whether the determinations made by the Minister were statute-barred. That issue could have been (and presumably would have been) addressed and determined if TSI’s appeal scheduled for May 2, 2016 would have been held. However, since that appeal was discontinued, there has been no judicial determination of whether the determinations were made within the time period as set out in subsection 152 (1.4) of the Act or after the expiration of this time period.
[30] In C.U.P.E., Arbour J. also made the following comments in relation to the doctrine of abuse of process and the integrity of the adjudicative process:
51 Rather than focus on the motive or status of the parties, the doctrine of abuse of process concentrates on the integrity of the adjudicative process. Three preliminary observations are useful in that respect. First, there can be no assumption that relitigation will yield a more accurate result than the original proceeding. Second, if the same result is reached in the subsequent proceeding, the relitigation will prove to have been a waste of judicial resources as well as an unnecessary expense for the parties and possibly an additional hardship for some witnesses. Finally, if the result in the subsequent proceeding is different from the conclusion reached in the first on the very same issue, the inconsistency, in and of itself, will undermine the credibility of the entire judicial process, thereby diminishing its authority, its credibility and its aim of finality.
[31] It would not be a waste of judicial resources to have this statute-barred issue determined in relation to the appeals filed by the appellants, nor could it lead to any possible inconsistency, since there has been no determination by the Tax Court of this issue.
[32] In this case, there are two possibilities – either the determinations made by the Minister were made within the time periods as prescribed in subsection 152(1.4) of the Act, or they were not. If a court were to find that the determinations were made after the expiration of the time period as set out in subsection 152(1.4) of the Act, the consequences that would arise in relation to the reassessments of the appellants’ 2000 and/or 2001 taxation years would have to be determined by the court.
[33] It should be noted that in the replies filed by the Minister in relation to the appeals filed by the appellants, the Minister indicated that the reassessments were issued under subsection 152(1.7) of the Act. Since subsection 152(1.7) of the Act applies “[w]here the Minister makes a determination under subsection (1.4)”, there is an issue of whether this subsection will apply if the determination is made after the expiration of the time period as prescribed in subsection 152(1.4) of the Act.
[34] As a result, in my view, it would not be an abuse of process for the appellants to raise the issue of whether the determinations were made after the expiration of the time period as prescribed in subsection 152(1.4) of the Act and, if so, how this would affect the reassessments of the appellants that were issued under subsection 152(1.7) of the Act.
Thus the appeals of the limited partners were allowed with one set of costs in both the Tax Court and the Court of Appeal.