Stover v. R. - TCC: Tax Court declines to set aside consent judgment

Stover v. R. - TCC:  Tax Court declines to set aside consent judgment

Stover v. The Queen (October 21, 2016 – 2016 TCC 235, Favreau J.).

Précis:   Mr. Stover, in consultation with his lawyer, Mr. Crowe, agreed in late 2015 to a consent judgment dismissing his appeal of his 2005 and 2006 taxation years.  His intention was to make an application for fairness relief to what is now called the Taxpayer Relief Committee.  When he became aware in 2016 that abandoning his appeal had resulted in his accepting liability under the disputed assessments he applied to the Tax Court to set aside the consent judgment dismissing his appeal.  The Tax Court held that the interest of finality of court decisions held sway in this application and accordingly dismissed it with costs.

Decision:  While Mr. Stover claimed not to have understood the consequences of the consent judgment dismissing his appeal the Court was not satisfied that this merited setting aside the judgment:

[27]        In this instance, there is no allegation of fraud and the applicant was represented by an experienced lawyer. Literature concerning the terms and conditions of the Taxpayer Relief provisions can easily be obtained, had the applicant decided to learn more about it before taking the decision to apply for this relief.

[28]        More importantly, no new fact arose or was discovered after the “deemed” judgment. What we have here is an error in law resulting from a misunderstanding of the process of application for relief from a tax liability to the Fairness Committee or a designated officer of the CRA.

[29]        Justice Doherty of the Court of Appeal for Ontario considered in Mujagic v. Kamps, 2015 ONCA 360 (CanLII), a rule similar to section 172 of the Rules. In paragraph 9 of his decision, he wrote:

. . . The distinction between fact and law is well-established. Facts come from evidence, including new testimony and exhibits. Law comes from statute books and case law. The law is applied to the facts to produce a result. Rule 59.06(2)(a), by its plain meaning, speaks to "facts arising or discovered" and not to jurisprudential changes. New facts, like all facts, are found in evidence, not in the statute books or case law.

[30]        In my view, the finality of Court decisions and the efficiency of the administration of justice should prevail over the sympathetic circumstances from the applicant’s perspective.

Accordingly the application was dismissed with costs.