Category Archives: Tax Court of Canada Rules

Findings of Fact in Criminal or Civil Trials in Tax Court

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Findings of Fact in Criminal or Civil Trials in Tax Court

Samaroo v The Queen, 2016 TCC 290

This was a preliminary motion in the nature of a voire dire.  The matter before the Court was in relation to findings of fact in a criminal proceeding, under issue estoppel or abuse of process in the context of an acquittal.

The Court held that the findings of fact in the criminal proceedings are not binding and no party was precluded from adducing further evidence before the Tax Court of Canada but admitted certain evidence as evidence of the Appellants.   The Court also ordered a variance in the order of presentation of evidence and argument pursuant to Tax Court of Canada Rules (General Procedure) Rule 135(2).


The Appellants (individuals and a corporation) brought a preliminary motion concerning the admissibility of exclusion of evidence.  Evidence to be excluded is from factual findings in a previous criminal trial for income tax evasion involving SOME of the appellants resulting in an acquittal– R v. Samaroo, 2011 BCPC 503 – and subsequent orders for civil proceedings for malicious prosecution – Samaroo v. Canada Revenue Agency, 2016 BCSC 531.  The parties took different views as to the issues determined by these proceedings (para 4).

The parties took different views as to the issues determined by these proceedings (para 4).  The Minister took the position that the findings and issues cannot be divorced from the differing standard and burden of proof in Criminal proceedings (para 6).

The Appellant also sought an order excluding further evidence being introduced to challenge the findings of those proceedings on the basis of issue estoppel or abuse of process (para 2).


The legal basis for excluding evidence was proposed to be either issue estoppel or abuse of process.

Issue Estoppel

The elements of issue estoppel, which is a discretionary remedy, are:

  • Issue Symmetry – same questions of issues have been decided;
  • Finality – the judicial decision said to create the estoppel is final; and
  • Mutuality – the parties to the judicial decisions or their privies are the same parties to the proceedings in which estoppel is raised.

The Court held that finality and mutuality exist, leaving issue symmetry.  The first step in applying issue estoppel is for the court to determine whether the pre-conditions have been met and, if met, the court must determine whether the discretionary remedy out to be granted (para 12) – Danyluk v. Ainsworth Technologies Inc, [2001] SCJ No 46 at para 33.  The discretion NOT to grant the remedy looks at whether there is anything in the circumstances that would result in an injustice if issue estoppel were granted and must consider the realities of each case (para 13) – Schweneke (2000), 47 0R (3d) 97 (CA) at paras 38 and 43.  This requires the Court to consider the fairness of the prior proceeding AND the fairness of using the results of that proceedings to determine the issues in the subsequent proceeding (para 14).  The policy goal is to “balance the public interest in the finality of litigation with the public interest in ensuring that justice is done on the facts of a particular case” (para 34).

Abuse of Process

The Court should not allow a party to re-litigate the same question twice where doing so results in a misuse of the court’s procedures, thereby compromising the integrity of the justice system and bringing the administration of justice into disrepute (para 15).   The same criteria that apply to prevent issue estoppel from operating also apply to prevent abuse of process – Toronto (City) v. CUPE Local 79, 2003 SCC 63, para 53.  Both aim at ensuring the fairness of the judicial decision-making process.  For example, if the stakes in the original proceeding were too small to generate a robust response but the subsequent stakes are higher, the administration of justice is better served by allowing the second proceeding to move forward (para 17) – Toronto (City) v. CUPE Local 79, 2003 SCC 63 para 53 This too is a discretionary remedy that considers fairness – Golden v. R., 2008 TCC 173 para 29 – but also balances finality, efficiency, and authority of the judicial decisions – Golden para 42.


Issue Estoppel

  • Varying standards of proof, burdens of proof, and outcomes/verdits;
    • Where acquittal in the prior criminal proceeding was based on reasonable doubt, issue estoppel does not apply to subsequent civil proceedings due to differences in standards of proof (para 31);
  • The focus of the analysis is on the issues determined, not the outcome  as conviction or acquittal (paras 32 and 34);
  • Different doctrines of issue estoppel apply to criminal and civil proceedings (para 33);
    • The burden of proof shift when comparing civil and tax court proceedings is important – the taxpayer in tax appeals has the burden to demolish the Minister’s assumptions (para 36) – [16];
  • The extent of the deference under judicial comity is a matter to be determined case by case, but does not apply where the factual  matrix, issues, or evidentiary basis is different (paras 37-39);
    • The purposes of criminal trials and tax appeals are fundamentally different and not a re-litigation but a distinct mandated legal process evaluating and determining different legal rights and obligations (para 40);

Abuse of Process

  • the maintenance of the TCC’s exclusive statutory jurisdiction to determine the validity and correctness of the tax assessment is a primary concern with abuse of process (para 42);
    • The court should not give exclusionary effect to findings, rather the findings admitted to give them voice but permitting contrary or enhancing evidence to be called (para 48);
  • The interests of the parties are not determinative, rather the integrity of the justice system is (para 44);

Proof in Tax Appeals

  • The Appellant bears the initial onus to demolish the Minister’s assumptions by at least a prima facie case on a balance of probabilities, Hickman Motors Ltd v. R, [1997] 2 SCR 336, para 92-93;
  • If successful, the onus shifts to the Minister to rebut the prima facie case and to prove the assumptions on a balance of probabilities, Hickman Motors Ltd v. R, [1997] 2 SCR 336, para 94-95;
  • However, the court may shift the initial burden to the Minister where doing so would not compromise the integrity, enforceability, and credibility of the self-reporting taxation system and the following factors apply (para 58):
    • knowledge of the pertinent facts skew in favor of the Minister;
    • Imposition of the initial onus on the taxpayer would result in procedural unfairness; or
    • strictly putting the initial onus on the taxpayer does not give sufficient consideration to the need to put the onus on the person making an affirmative assertion;
Utilization of Findings of Past Proceedings in This case
  • The findings comprised admissible evidence, while the weight to be given to this evidence remained the TCC’s allowing a reconciling of the varying processes, standards of proofs, and purposes (para 61);
  • Where the findings do not address all assumptions of tax years, the Appellant bears the initial burden (para 62);
  • The final burden’s remain unchanged (paras 70-71);

Sas Ansari, BSc BEd PC JD LLM PhD (exp) CPA In-Depth Tax 1, 2 &3

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Discovery Questions in Tax Court Appeals – Proper and Relevant?

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Discovery Questions in Tax Court Appeals – Proper and Relevant?

506913 N.B. Ltd. v The Queen, 2016 TCC 286

One of the issues was the application of Tax Court of Canada Rules (General Procedure), Rules 107(3) and 95(1).

Justice Boyle, after reviewing Rule 95(1) in both French and English, considered the use of the word “proper” and “relevant” to be no more than a drafting slip “compliments of the mythical Department of Legal Redundancies Department” as the French version only expresses a relevancy test (para 8).  Rule 107(3) imposes a “pertinence” test which is different than a “relevance” test (para 8).  As such, the TCC refused to follow the decision in Stanfield v. The Queen, 2007 TCC 480 (paras 53 – 58) in so far as “proper” and “relevant” were seen as separate requirements (para 9).   Rather, Justice Boyle quoted with approval 569437 Ontario Inc. v. Canada, [1994] T.C.J. No. 531 (QL), as quoted with emphasis in Shell Canada Ltd. v. Canada, [1996] T.C.J. No. 1313 (QL):

. . . the standard for propriety of a question . . . is whether the information solicited by a question may be relevant to the matters which at the discovery stage are in issue on the basis of pleadings filed by the parties.

Scope of Questioning on Discovery 

The Court referred to the decisions in Baxter v. The Queen, 2004 TCC 636 (paras 12-13), Shell Canada Ltd. v. Canada, [1996] T.C.J. No. 1313 (QL) (para 9),  Canadian Imperial Bank of Commerce v. The Queen, 2015 TCC 280 (paras 14-18, 270, 271, 362, and 363), and Canada v. Lehigh Cement Limited, 2011 FCA 120 (paras 24, 29, 30, 34, 37, 40, and 44), to summarize the law as follows (para 11):

(a)     The general principles applicable to questions on discovery do not provide a magic formula applicable to all situations.

(b)     The scope of questioning permitted on discovery is defined by the pleadings of the parties. These pleadings set out the facts, issues and positions which are all proper matters for discovery. A questioning party needs only be able to satisfy the motions judge that the information sought may be relevant to such a matter, construing the pleadings with fair latitude and in the factual and procedural context of the particular case.

(c)      The threshold level of relevancy upon discovery is quite low and is not likely difficult to meet in light of the goal of discovery — openness — and its purpose of fairly, reasonably and expeditiously moving appeals forward to a hearing.

(d)     Relevancy at this stage is extremely broad and must be generously, broadly and liberally construed. Very wide latitude should be given to permit the fullest inquiry as to all matters which can reasonably be considered to possibly affect the issues between the parties. This has been described as a semblance of relevancy, which I take to mean the question need only reasonably appear to possibly be relevant.

(e)      A question is relevant if it may lead to a train of inquiry which may directly or indirectly advance the party’s own case or damage that of the other party.

(f)      Only questions concerning matters that are clearly or completely irrelevant should be rejected at the discovery stage. Where there is doubt about the relevancy of a question, the principal goal of openness favours requiring the question to be answered.

(g)     A motions judge should permit questions that are broadly related to the matters/issues in dispute. Touching the matters in question suffices.

(h)     A motions judge should not fetter the discretion of the judge who will preside at trial and will be required and best able to decide relevancy as part of the admissibility of the evidence into the record in the context of the evidence as a whole. An inadvertent error by a motions judge determining relevancy at discovery may lead to serious problems or even injustice at trial. It is the trial judge’s determination that attains deference. Trial judges rightly give very little deference to a motions judge’s determination. Discovery and the admitting of evidence are distinctly different aspects of an appeal.

(i)      A motions judge should not second‑guess counsel conducting a discovery by minutely examining each question. A question can be relevant at the discovery stage even if, considered in isolation, it may seem irrelevant. The relevance of a question may be tied to other evidence not before the motions judge.

(j)      It is permitted to ask questions to ascertain the other party’s legal position.

(k)     It is not a valid objection that the examining party already knows the answer to the question. I do not read this as allowing counsel to repeat endlessly what is a substantively identical question at the same examination. That a question may be similar to one already asked does not make it substantively identical. Words and phrases may mean different things to different people. Different words and phrases have different meanings.

(l)      It is not a valid objection that the other party will no longer be relying upon a particular provision, position or characterization.

(m)    The Court will not automatically disallow a question as not relevant merely because it concerns matters outside the fiscal periods in issue in the appeal.

(n)     Motions judges should not permit questions that are patently irrelevant questions, abusive questions, questions designed to embarrass or harass the person or party, questions designed to delay the process, or questions forming part of fishing expeditions of vague and far-reaching scope.

(o)     A relevant question may be disallowed if answering it would constitute undue hardship on the other party.

(p)     The above summary is not exhaustive.


The Court concluded, in this case, that:

  • With respect to amended replies, the appellant is given full rights they would have had on initial examination for discovery (full and complete examination) with no limitation on the scope of discovery, as the respondent would not have sought leave to amend replies if the distinct and specific amendments were not necessary “as they were kind of, almost, mostly, pretty much already addressed in its existing replies” (paras 12-14);
  • Refusal to answer questions on the basis that “the questions were not related to the amendments” was considered to be “quite cheeky” and not proper (para 14);
  • It is proper to ask repetitive or overlapping questions where examination is resumed after a long adjournment, additional examination is permitted or ordered,  as basic introductory, contextualization, or refresher questions (para 17);
  • Where significant, substantive amendments are made, counsel if permitted to question as to the impact of the amendments through repetitive or overlapping questions, particularly where the overlap between new and old positions is set out in the pleadings (para 18);
  • Identical questions will have to be answered in relation to all new matters raised in amendments, including “how the new answers may differ from the prior answers in respect of the old matters previously pleaded and examined on” (para 19);
  • Asking questions as to the factual basis of legal conclusions is proper and relevant (para 29);


Sas Ansari, BSc BEd PC JD LLM PhD (exp) CPA In-Depth Tax 1, 2 &3

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