The Federal Court of Appeal (FCA) recently released its reasons in MNR et al v. JP Morgan Asset Management (Canada) Inc.<\/i>\u00b8 2013 FCA 250.\u00a0 In lengthy reasons, the FCA takes the opportunity to express its exasperation with the many applicants who \u201ctime and time again\u201d come to the Federal Court in a steady \u201cflow of unmeritorious applications for judicial review in the area of tax.\u201d\u00a0 The decision sounds the death knell for taxpayers seeking recourse for alleged Canada Revenue Agency (CRA) improprieties by means of judicial review in the Federal Court.<\/p>\n
In general terms, the legislative scheme for tax matters in Canada bifurcates jurisdiction between the Tax Court of Canada, which has exclusive jurisdiction to deal with appeals of assessments, and the Federal Court of Canada, which has jurisdiction over matters relating to decisions and orders made by federal tribunals except to the extent that those matters are within the jurisdiction of the Tax Court.<\/p>\n
In JP Morgan Asset Management<\/i>, the FCA clearly states that the Federal Court does not have jurisdiction to address CRA misbehavior in respect of the issuance of an assessment.\u00a0 The reasons are two-fold:\u00a0 Firstly, the decision to issue an assessment and the content of the assessment (namely, the amount payable or determined) are not matters of ministerial discretion (see paragraphs 77-80). \u00a0Secondly, a judicial review is a method of last resort that may only be invoked where no other avenue for relief is available.\u00a0 In this regard, the FCA states that the Tax Court appeal process provides effective relief where an assessment is incorrect, where evidence should not be admitted to support an assessment, where there is an abuse of the Tax Court\u2019s process, or where there was a procedural defect in the process of assessing.\u00a0 If a taxpayer cannot or does not obtain relief through the Tax Court appeal process, a taxpayer may obtain relief through the provincial civil courts for such improprieties as negligence, fraud or misfeasance (see paragraphs 81-90).<\/p>\n
The FCA\u2019s reasoning will be unsatisfactory to tax litigants and practitioners, many of whom will strongly disagree with the FCA\u2019s view that adequate alternatives are available to taxpayers and, in particular, with the assertions that the Tax Court\u2019s process is adequate to remedy procedural defects in the raising of assessments and that civil litigation in the provincial courts is readily available to taxpayers.\u00a0 The steady stream of judicial review applications arguably demonstrates that tax litigants, on the advice of well-seasoned practitioners, are not able to obtain relief through the Tax Court\u2019s or the provincial civil courts\u2019 processes.<\/p>\n
In tax disputes, the Crown is privileged to rely on assumptions in lieu of evidence in the raising and defending of an assessment. It is also able to prioritize its considerable resources as it sees fit at a time when the cost of litigation poses an insurmountable barrier to access to justice for most ordinary Canadians.\u00a0 These factors, among others and coupled with the well-established legal principle that the process of assessing is distinct from the assessment itself and that CRA (mis)conduct is irrelevant to the correctness of the assessment in dispute, generally operate to foreclose relief for CRA impropriety via the Tax Court\u2019s and provincial courts\u2019 process.<\/p>\n
The issuance of an assessment that is subject to the Tax Court appeal process is the primary means by which CRA conduct has legal effect.\u00a0 As a result of the decision in JP Morgan Asset Management<\/i>, the last remaining door to judicial review has been firmly closed in the vast majority of tax disputes.<\/p>\n","protected":false},"excerpt":{"rendered":"
The Federal Court of Appeal (FCA) recently released its reasons in MNR et al v. JP Morgan Asset Management (Canada) Inc.<\/i>\u00b8 2013 FCA 250.\u00a0 In lengthy reasons, the FCA takes the opportunity to express its exasperation with the many applicants…<\/p>\n","protected":false},"author":9,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[52],"tags":[],"class_list":["post-967","post","type-post","status-publish","format-standard","hentry","category-tax-blog-general"],"_links":{"self":[{"href":"https:\/\/www.thor.ca\/blog\/wp-json\/wp\/v2\/posts\/967","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.thor.ca\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.thor.ca\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.thor.ca\/blog\/wp-json\/wp\/v2\/users\/9"}],"replies":[{"embeddable":true,"href":"https:\/\/www.thor.ca\/blog\/wp-json\/wp\/v2\/comments?post=967"}],"version-history":[{"count":1,"href":"https:\/\/www.thor.ca\/blog\/wp-json\/wp\/v2\/posts\/967\/revisions"}],"predecessor-version":[{"id":2740,"href":"https:\/\/www.thor.ca\/blog\/wp-json\/wp\/v2\/posts\/967\/revisions\/2740"}],"wp:attachment":[{"href":"https:\/\/www.thor.ca\/blog\/wp-json\/wp\/v2\/media?parent=967"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.thor.ca\/blog\/wp-json\/wp\/v2\/categories?post=967"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.thor.ca\/blog\/wp-json\/wp\/v2\/tags?post=967"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}