Dilalla v. Canada (February 6, 2020 – 2020 FCA 39, Rennie (Author), De Montigny, Locke JJ.A.).
Précis: The taxpayer brought a motion to strike the Crown’s Reply. The motion was brought almost three years after the Reply was filed and after the completion of a number of additional procedural steps. The Tax Court dismissed the motion and Mr. Dilalla appealed to the Federal Court of Appeal. The Court of Appeal dimissed the appeal with costs holding that the Fresh Step Rule was applicable and had been properly applied by the Tax Court.
Decision: The taxpayer brought his motion to strike long after the Crown had filed its Reply:
 The Tax Court found that the appellant brought the motion far too late in the litigation process. The motion objecting to the Minister’s Reply came almost three years after it was filed, and more than two years after all pre-trial proceedings had been completed. The motion was brought ten months after the parties had filed a joint application representing that the appeal was ready to be set down for hearing. The appellant had brought two interlocutory motions and one appeal to this Court. All had been dismissed, one with the observation by the Tax Court judge that it was a delaying tactic and abusive.
The Court of Appeal concurred with the findings of the Tax Court:
 The appellant has not identified any such error in the Tax Court’s decision. The facts amply justify the decision not to grant leave to the appellant to file his motion. The fresh step rule is designed to ensure the orderly movement of litigation through to trial. The rule is based on the view that if a party pleads over to a pleading, it implies a waiver of any irregularity that might have been attacked. Here, the judge’s discretion was exercised consistent with the objective of this rule and filed evidence before him. It was also exercised in a manner consistent with existing jurisprudence which has applied the fresh step rule where a party seeks to strike a reply on the basis that the assumptions contained therein are conclusions of law instead of fact; Gerbro Inc. v. The Queen, 2014 TCC 179 at para 38; Kulla et al v. Her Majesty the Queen, 2005 TCC 136 at para 13.
 The thrust of the appellant’s argument before this Court was that the Tax Court had no jurisdiction to decide the Rule 8 motion. As the Reply failed to assert a material fact, specifically that the appellant had a subjective intention to make a profit, the Tax Court allegedly had no jurisdiction to consider Rule 8.
 This argument is devoid of merit. Any deficiency in the reply pleading bears on the validity of the reassessment, and has no relevance to the jurisdiction of the Tax Court.
 The appellant also contends that the reasons for the decision are inadequate. Again, there is no merit in this argument. The reasons fully and fairly explain the basis on which the judge exercised his discretion.
As a result the appeal was dismissed with costs.