Canada v. Canada Trustco Mortgage Co.
The appeal was dismissed because the Crown failed to show that the Tax Court Judge made a reviewable error; there was no demonstrated clear and unambiguous policy in paragraph 20(1)(a) or the CCA scheme as a whole that would render the taxpayer's CCA claim a misuse or abuse for the purposes of subsection 245(4).
Source-derived case information.
- Citation
- 2004 FCA 67
- Parties
- Appellant: Her Majesty the Queen; Respondent: Canada Trustco Mortgage Company
- Court
- Federal Court of Appeal
- Jurisdiction
- Canada
- Judgment Date
- 11 February 2004
- Procedural Posture
- Appeal to the Federal Court of Appeal / Decision on Appeal; Reasons Delivered From the Bench
- Outcome
- Appeal dismissed with costs
- Legal Topics
- Capital Cost Allowance, Abuse/misuse of Statute, Section 245(4), Paragraph 20(1)(a)
- Source Language
- en
Source-derived case record
Summary, issues, holding and outcome
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Parties
Her Majesty the Queen
Appellant
Canada Trustco Mortgage Company
Respondent
Procedural Posture
Appeal to the Federal Court of Appeal / Decision on Appeal; Reasons Delivered From the Bench
Legal Issues
- 1 Whether the transactions constituted a misuse of a provision of the Income Tax Act or an abuse of the CCA scheme under subsection 245(4)
- 2 Whether the policy underlying paragraph 20(1)(a) and the CCA scheme requires CCA to be limited to the taxpayer's economic cost rather than the legal purchase price
- 3 Whether the Tax Court Judge made a reviewable error
Ratio Decidendi
The appeal was dismissed because the Crown failed to show that the Tax Court Judge made a reviewable error; there was no demonstrated clear and unambiguous policy in paragraph 20(1)(a) or the CCA scheme as a whole that would render the taxpayer's CCA claim a misuse or abuse for the purposes of subsection 245(4).
Court Disposition
Appeal dismissed with costs
Orders
- Appeal dismissed with costs
Full Case Text
Judgment text and source record
1 paragraphs
Canada v. Canada Trustco Mortgage Co. Court (s) Database Federal Court of Appeal Decisions Date 2004-02-11 Neutral citation 2004 FCA 67 File numbers A-262-03 Decision Content Date: 20040211 Docket: A-262-03 Citation: 2004 FCA 67 CORAM: ROTHSTEIN J.A. EVANS J.A. PELLETIER J.A. BETWEEN: HER MAJESTY THE QUEEN Appellant and CANADA TRUSTCO MORTGAGE COMPANY Respondent Heard at Toronto, Ontario, on February 11, 2004. Judgment delivered from the Bench at Toronto, Ontario, on February 11, 2004. REASONS FOR JUDGMENT OF THE COURT BY: EVANS J.A. Date: 20040211 Docket: A-262-03 Citation: 2004 FCA 67 CORAM: ROTHSTEIN J.A. EVANS J.A. PELLETIER J.A. BETWEEN: HER MAJESTY THE QUEEN Appellant and CANADA TRUSTCO MORTGAGE COMPANY Respondent REASONS FOR JUDGMENT OF THE COURT (Delivered from the Bench at Toronto, Ontario, on February 11, 2004) EVANS J.A. [1] We are not persuaded that the Tax Court Judge made a reviewable error when he concluded that, for the purpose of subsection 245(4) of the Income Tax Act, R.S.C. 1985, c. 1 (5th Supp.), the transactions in question in this case did not constitute a misuse of a provision of the Act, or an abuse of the capital cost allowance ("CCA") scheme as a whole. [2] Counsel for the Crown submitted that she was not seeking to recharacterize the transactions and did not allege that they were a sham. Rather, she said, the policy underlying paragraph 20(1)(a), and the CCA provisions as whole, is to permit taxpayers to claim CCA in respect of the "real" or "economic" cost that they incurred in acquiring an asset, and not the "legal" cost, that is, on the facts of this case, the purchase price paid by the taxpayer. [3] However, counsel was unable to refer to any source that satisfied us that there is a clear and unambiguous policy underlying paragraph 20(1)(a), or the CCA scheme when read as a whole, that renders it a misuse or an abuse of those provisions for the taxpayer to claim CCA in this case. [4] For these reasons, the appeal will be dismissed with costs. "John M. Evans" J.A. FEDERAL COURT OF APPEAL NAMES OF COUNSEL AND SOLICITORS OF RECORD DOCKET: A-262-03 STYLE OF CAUSE: HER MAJESTY THE QUEEN Appellant and CANADA TRUSTCO MORTGAGE COMPANY Respondent PLACE OF HEARING: TORONTO, ONTARIO DATE OF HEARING: FEBRUARY 11, 2004 REASONS FOR JUDGMENT OF THE COURT : (ROTHSTEIN, EVANS & PELLETIER JJ.A.) DELIVERED FROM THE BENCH BY: EVANS J.A. APPEARANCES: Ms. Deen C. Olsen FOR THE APPELLANT Mr. Al Meghji Ms. Monica Biringer FOR THE RESPONDENT SOLICITORS OF RECORD: Morris Rosenberg Deputy Attorney General of Canada Toronto, Ontario FOR THE APPELLANT OSLER, HOSKIN & HARCOURT LLP Toronto, Ontario FOR THE RESPONDENT