LBL Holdings Limited v. Canada (January 20, 2016 – 2016 FCA 17, Trudel (author), De Montigny, Gleason JJ. A.).
Précis: The Crown’s Reply was struck in the Tax Court and the Crown filed a Fresh Reply. The taxpayer moved to strike portions of the Fresh Reply, relying in part on affidavit evidence it filed before the Tax Court, but was only partially successful. It appealed to the Federal Court of Appeal on those portions of the Fresh Reply where it had been unsuccessful. The Court found no error on the part of the Tax Court Judge and dismissed the appeal from the bench with costs.
Decision: The Court found that the decision of the Tax Court Judge not to strike the impugned provisions was not assailable:
 Although LBL is correct to note that submission of evidence by affidavit is not prohibited in motions pursuant to paragraphs (1)(a), (b), and (c) of Rule 53, we have reviewed the affidavits in question and find that they do not assist in determining whether the impugned portions of the Fresh Reply should be struck in accordance with this test.
 It appears that LBL seeks to essentially argue its case on the merits, and in particular to challenge the Minister’s asserted facts by introducing contrary evidence, at this interlocutory stage. We agree with the respondent that a motion to strike is not the appropriate forum. Indeed, to delay a trial with repeated challenges to pleadings would seem to frustrate the purpose of promoting judicial efficiency. As Bowman, C.J. wrote for the Tax Court:
If the respondent wishes to challenge the facts alleged, a section 53 motion is not the place in which to do so. It is at trial where a judge hearing the evidence can determine the correctness, relevancy and weight to be assigned to the evidence adduced in support of the allegations. (Sentinel Hill Productions (1999) Corporation v. The Queen, 2007 TCC 742,  5 C.T.C. 2690) at paragraph 6.
 The Tax Court judge conducted a careful examination of the portions of the Fresh Reply challenged by LBL. He found that paragraphs 12(d), 12(j), and 12(y) constituted assertions of fact and not, as LBL argued, conclusions of mixed fact and law that would be impermissible in pleadings as material facts.
 He found, further, that paragraphs 18, 19, 23, and 24, all under the heading of “Statutory Provisions, Grounds Relied on, and Relief Sought”, were sufficiently supported by the facts the Crown pleads that a judge may reach the conclusions set out in those paragraphs. In other words, none of the portions of the Fresh Reply that were not struck manifest the kind of radical deficiency that would justify striking pleadings at this early stage.
As a result the appeal was dismissed from the bench with costs.