Joe Monaco and I spend a good deal of time handling cases before the Tax Court of Canada because sometimes the CRA just will not listen to reason. Before filing an appeal, however, the client should understand something about the process. To that end, the following table provides a simplified outline of a General Procedure income tax appeal.
| Step | Description | Timing |
|---|---|---|
| Notice of Appeal | A taxpayer (the appellant) commences an appeal to the Tax Court by filing a notice of appeal and paying the appropriate filing fee. Among other things, the notice of appeal sets out the material facts relied on (but not the evidence), the issues to be decided, the statutory provisions relied on and the reasons why the appeal should be allowed (why the appellant should succeed). | Within 90 days of the confirmation of the taxpayer’s notice of objection or a reassessment following objection; or more than 90 days after serving the notice of objection (where no confirmation or reassessment has yet been issued). |
| Service of notice of appeal | The Tax Court registrar serves the notice of appeal on the Department of Justice—the CRA’s lawyer (the respondent)—and sends a certificate of service to the appellant | “Forthwith” after the notice of appeal is filed |
| Reply | The respondent (CRA/Justice) must file a reply to the notice of appeal. Among other things, the reply states the facts that are admitted by the respondent, the facts that are denied, the facts of which the respondent has no knowledge and puts in issue, the findings or assumptions of fact made by the Minister when making the assessment, any other material fact, the issues to be decided and the reasons why the appeal should be dismissed (why the respondent should succeed). | The respondent must file the reply within 60 days after service of the notice of appeal and serve it within 5 days after the expiry of that 60-day period. |
| Answer | The appellant may (but need not) file an answer. Among other things, the answer identifies the new facts raised in the reply that are admitted, the new facts that are denied, the new facts of which the appellant has no knowledge and puts in issue and any other reasons the appellant intends to rely on. If the appellant does not file an answer, then he or she is deemed to deny all of the allegations of fact made in the reply. | Within 30 days after service of the reply. |
| List of documents | Each party must file and serve a list of documents identifying all of the documents of which the party has knowledge at that time that might be used in evidence by the party. A party need not list every relevant document unless the parties otherwise agree or the court so orders. In general, however, both sides will ask for all relevant documents at the examination for discovery. | Within 30 days after the close of pleadings. In practice, however, the exchange of the list can take months until the Court intervenes to impose a specific deadline. |
| Examinations for discovery | Each party is entitled to ask the other party any relevant question about the case either in written form or orally in front of a court reporter while the person answering questions is under oath. Discoveries should narrow the issues between the parties and allow each side to understand the other’s case. | No specific deadline. In practice, the Court will often intervene to impose a deadline on the parties. |
| Undertakings | Frequently, a party cannot answer a question asked at an examination for discovery or produce a document requested. As a result, the party will “undertake” to provide an answer or produce the document at a later date. In addition, each party has an ongoing obligation to provide information subsequently obtained that corrects or completes an answer given on discovery. | “Forthwith” after discovery. In practice, the Court will often impose a deadline on the parties for completing undetakings. The obligation to correct or complete answers subsists until the hearing. |
| Discovery of non-parties. | Sometimes neither party has all of the information needed to answer questions asked at a discovery. As a result, one or both parties can apply to the Court for an order requiring a third-party to attend and give answers under oath respecting matters relevant to the appeal. | No specific deadline. |
| Written offer of settlement | A written offer of settlement is usually made to try to settle the appeal without a hearing. A party who makes such an offer and who succeeds at trial will usually try to rely on having made a written settlement offer to obtain a higher award of costs (reimbursement for having had to proceed to trial). | At any time. |
| Joint application | The parties can apply jointly to the Court for a hearing date. | After the close of pleadings. In practice, the parties will not apply for a trial date until after discoveries are complete. |
| Pre-hearing conference | The parties can apply to the Court for a pre-hearing conference at which a judge (who will not hear the appeal) can provide a frank assessment of each side’s case in front of the parties and with counsel present. The purpose of the conference is to encourage settlement or to narrow the issues between the parties. Where the parties have requested three or more days for a hearing, the Court will usually order a conference to try to reduce the length of the trial. | After the appeal has been set down for hearing. |
| Hearing | The Tax Court sits in cities across Canada including Hamilton and St. Catharines. In Hamilton, the Court will usually use space at the John Sopinka Court House. | As and when ordered by the Court. |
