http://decisions.fca-caf.gc.ca/fca-caf/decisions/en/item/143156/index.do
Karam v. Canada (Attorney General) (March 15, 2016 – 2016 FCA 86, Pelletier (author), Dawson, Gauthier JJ. A.).
Précis: Mr. Karam was unsuccessful in the Tax Court which concluded that his share of the gain on a sale of real property was business income. He did not appeal that decision but launched a judicial review application in the Federal Court where he sought to restrain the Minister’s collection activity to the amount of “profit” stated in the notice of confirmation he received in response to his notice of objection. Both parties admitted that the “profit” set out in the notice of confirmation was an error and did not reflect the assessment under appeal in the Tax Court. The Federal Court dismissed the application for judicial review as being a collateral attack on the decision of the Tax Court. Mr. Karam appealed to the Federal Court of Appeal which dismissed the appeal from the bench with costs.
Decision: The Court of Appeal dispatched Mr. Karam’s appeal from the bench with few words:
[2] The basis of the appellant’s argument is that the notice of confirmation provided by the Minister on November 17, 2010 provides the legally correct basis of the appellant’s liability for income tax and that the Minister’s collection activity is limited to the amount of tax owing when that basis of assessment is given effect.
[3] The difficulty with this argument is that it amounts to a collateral attack on the reassessment issued by the Minister as well as on of the Tax Court of Canada decision’s dismissing the appellant’s appeal from that reassessment (2013 TCC 354).The amount of tax payable by a taxpayer is assessed by the Minister (ss. 152(1) of the Income Tax Act, R.S.C. 1985, c. 1 (5th Supp.) “the ITA”) and is communicated to the taxpayer in a notice of assessment (ss. 152(2)) or reassessment (ss. 152(4)). Any challenge to the amount of tax payable must proceed by way of an appeal from the assessment or reassessment to the Tax Court of Canada which has exclusive original jurisdiction over appeals from assessments (ss. 165(7) of the ITA and ss. 12(1) of the Tax Court of Canada Act, R.S.C. 1985, c. T-2.
[4] The appellant concedes, as he must, that the correctness of the amount of tax for which he was liable could have been raised before the Tax Court of Canada but, for reasons best known to the appellant, that was not done. Given this right of appeal, section 18.5 of the Federal Courts Act, R.S.C. 1985, c. F-7 deprives this Court of jurisdiction in this matter.
Costs were awarded to the Crown in an amount agreed upon by the parties.