Process

The CRA and the Crown like to say (or at least sometimes they act as if), in the objection and Tax Court appeal process, all that matters is whether the assessment in issue is correct. Justice J.E. Hershfield, in Wood v. The Queen, 2008 TCC 105, begged to differ.

The Crown, at the commencement of the hearing of this appeal, sought leave to amend its Reply:

[4] […] Since the amendment was not consented to, leave of the Court was required. Leave to amend was denied. The proposed amendment (notice of which was first given to the Appellant just weeks before the hearing) purported to change the assumptions made by the Minister to ones that related to other requirements of the subject provision, namely that the program was not a full-time program and the Appellant’s husband was not a full-time student. It was now admitted that the College was a designated educational institution.

[5] The Respondent had no witness to attest to the assumptions actually made and to the reasons for the reassessment and confirmation. A letter from the auditor was said to be available. I ruled against its admission on the basis that it was hardly the best evidence and it would afford no opportunity for cross-examination. The circumstances of this case do not warrant a relaxation of the rules of evidence on this point. A complete reversal of the basis for an assessment made at the 11th hour in a matter where the Appellant has no legal representation requires the presence of the Minister’s agent to address obvious questions and concerns.

The Crown now bore the onus of proof in the trial, but it had no way of introducing its documents into evidence because it had not summoned any witnesses. Could it call the Appellant as a witness for that purpose? The judge decided it would be improper to allow the Crown to call the unrepresented taxpayer:

[12] As stated above, it is the Respondent, who now at the 11th hour asserts a new factual issue, that must call evidence. Documentation of the program curriculum, hours and the like, that were presumably relied on by the Respondent at some point prior to the hearing, were for the Respondent to identify at the trial through its witnesses – the persons who examined and relied on such evidence in the first place – not the evidence of a student’s spouse even if she is the adverse party. The relevant testimony would be that of the person, presumably the auditor, who knows the source of the documents and why they should be taken as reliable and given weight. Indeed, as already suggested, someone from the College might have been brought to testify – someone with actual first hand knowledge of the new facts in issue. Allowing the Respondent to examine the Appellant would have the effect of allowing an ill-fated last gasp attempt to avoid the inevitable consequence of being less than fully prepared for a ruling that reversed the burden of proof. Allowing the Respondent to examine the Appellant, who lacked legal sophistication and acumen and was without counsel, would, in my view, have inevitably required the intervention of the Court. Acquiescing to the application of a Rule that would have allowed an attempt to have the Appellant attest to the Respondent’s evidence is not something this Court should encourage. For these reasons, I did not allow the Respondent to call the Appellant.

Given that the Crown could not introduce any evidence, the taxpayer’s appeal was allowed.

We often suggest to taxpayers who must appear before the Tax Court in an informal procedure appeal that they represent themselves after some suitable tutoring from us. The Tax Court judges generally bend over backwards to ensure that an unrepresented litigant gets a fair trial, and Wood confirms our experience in that regard. It should also be noted that, if Ms. Wood had been represented, the outcome for her would likely have been less favourable. The Crown had given notice of its intention to amend its pleadings. The judge might have allowed the amendments if the taxpayer had been represented, in which case the appellant might very well have lost her appeal.