Goheen v. R. – FCA: Crown not required to amend pleadings to rely upon evidence disclosed by discovery of taxpayer – no reversible error

Goheen v. R. – FCA:  Crown not required to amend pleadings to rely upon evidence disclosed by discovery of taxpayer – no reversible error


Goheen v. Canada (May 1, 2019 – 2019 FCA 104, Stratas, Rennie (Author), Linden, JJ.A.).

Précis:   The taxpayer claimed a US $30,000 charitable donation which CRA denied on the basis of absence of donative intent and imposed gross negligence penalties.  During discoveries of the taxpayer it appeared that US $30,000 was subsequently deposited in the same account from which the alleged donation was made.  The Crown relied upon that evidence at trial and the Tax Court dismissed the taxpayer’s appeal.  The taxpayer appealed to the Federal Court of Appeal arguing, in part, that the Crown should have amended it pleadings if it intended to rely upon the US $30,000 deposit to support the disallowance of the alleged gift.  The Court of Appeal dismissed the appeal from the bench holding that the deposit was simply evidence of the taxpayer that was relied upon by the Crown to support its assessing position, i.e., absence of donative intent.  Costs were awarded to the Crown.

Decision:   The Court of Appeal was not sympathetic to the taxpayer’s arguments:

[13]  In our view, the appellant’s argument confuses a new theory or new set of assumptions with the evidence marshalled to support the Minister’s theory or assumptions. The Deposit was not a new theory or basis of reassessment; rather, it was additional, particularized evidence, in support of the Minister’s overarching theory. The Minister need not amend her pleadings every time an appellant produces new evidence that contradicts his own position. Nor do we accept the distinction that the appellant draws between a return on his investment as opposed to a return of his investment. Both are consistent with the Minister’s pleading that there was no donative intent.

[15]  We would also dismiss the argument that the Minister had the burden to prove the Deposit was, in fact, consideration flowing back to the appellant from Global. A taxpayer challenging an assessment must prove the facts upon which they rely and disprove the Minister’s assumptions related to those facts unless the assumed fact is particularly, or exclusively, within the Minister’s knowledge. Here, the Minister was not privy to the transaction and it would be incorrect to shift the burden to her as the facts underlying that transaction were within the appellant’s knowledge: see Transocean Offshore Ltd. v. Canada, 2005 FCA 104 at para. 35, 332 N.R. 21; Canada v. Anchor Pointe Energy Ltd., 2007 FCA 188 at paras. 35-36, [2008] 1 F.C.R. 839.


[16]  Finally, we reject the appellant’s argument that the onus shifted to the Minister on the basis of the appellant’s simple assertion that he had the requisite intent. There was no evidence or explanation from the appellant which, on a prima facie basis, justified shifting the onus to the Minister. To the contrary, the judge found the appellant’s evidence to be inconsistent, unreliable and not to be believed.

As a result the appeal was dismissed from the bench, with costs.