Peter Kirkwood Holdings Ltd. v. Canada

Peter Kirkwood Holdings Ltd. v. Canada Court (s) Database Federal Court of Appeal Decisions Date 2003-12-16 Neutral citation 2003 FCA 481 File numbers A-180-03 Decision Content Date: 20031216 Docket: A-180-03 Citation: 2003 FCA 481 In Re: The Income Tax Act CORAM: LÉTOURNEAU J.A. NADON J.A. PELLETIER J.A. BETWEEN: PETER KIRKWOOD HOLDINGS LIMITED Appellant and HER MAJESTY THE QUEEN Respondent Docket: A-181-03 BETWEEN: PETER KIRKWOOD Appellant and HER MAJESTY THE QUEEN Respondent Heard at Vancouver, British Columbia on December 16, 2003. Judgment delivered from the Bench at Vancouver, British Columbia on December 16, 2003. REASONS FOR JUDGMENT OF THE COURT BY: NADON J.A. Date: 20031216 Docket: A-180-03 Citation: 2003 FCA 481 In Re: The Income Tax Act CORAM: LÉTOURNEAU J.A. NADON J.A. PELLETIER J.A. BETWEEN: PETER KIRKWOOD HOLDINGS LIMITED Appellant and HER MAJESTY THE QUEEN Respondent Docket: A-181-03 BETWEEN: PETER KIRKWOOD Appellant and HER MAJESTY THE QUEEN Respondent REASONS FOR JUDGMENT OF THE COURT (Delivered from the Bench at Vancouver, British Columbia on December 16, 2003) NADON J.A. [1] These are appeals and cross-appeals from the decision of Mr. Justice Little of the Tax Court of Canada dated March 14, 2003 which allowed, in part, the appellants' appeals from the Minister's assessments of their tax liability under section 160 of the Income Tax Act (the "Act"). [2] Before us the appellants abandoned all of their grounds of appeal save one, i.e. that the Minister was statute barred from proceeding against them by reason of section 32 of the Crown Liability and Proceedings Act and paragraph 45(1)(h) of the Limitations Act of the Province of Ontario. Specifically, the appellants say that the Minister was statute barred as of January 10, 1998, because of the expiry of the two-year limitation period provided in the Limitations Act. [3] In our view, the appellants cannot succeed on this ground. In The Queen v. Markovitch (2003) D.T.C. 5185 the Supreme Court of Canada made it clear that tax debts created under the Income Tax Act were not subject to provincial limitation periods. [4] We now turn to the cross-appeals. The Crown submits that Mr. Justice Little made two errors. First, it says that he incorrectly applied paragraph 160(1)(b)(ii) of the Act when he held that a section 160 assessment did not create a tax debt and that consequently the appellants could not be assessed for interest (on Roussy's tax debt) accrued after the date of the transfers. [5] In the memorandum which the appellants filed as respondents in the cross-appeals, and orally before us, they conceded, correctly in our view, that the judge was in error in so holding. [6] The Crown also submits that Mr. Justice Little erred in ordering the reassessment of Kirkwood Roussy in respect of its 1991 taxation year. We agree. Mr. Justice Little could not make that order, all he could order was for the Minister to recalculate Kirkwood Roussy's tax liability for the sole purpose of determining the appellants' tax liability under section 160 of the Act (see Gaucher v. Her Majesty the Queen (2000) 264 N.R. 369 at paragraphs 7-9). [7] For these reasons, the appeals will be dismissed. The Crown will be entitled to one set of costs plus its disbursements on both appeals. [8] As to the cross-appeals, they shall be allowed. Those parts of Mr. Justice Little's decision dated March 14, 2003 wherein he ordered the Minister to reassess Kirkwood Roussy (paragraph 25 of the reasons) and not to include any interest accrued after the date of the transfers in determining the appellants' tax liability (paragraph 26 of the reasons) will be set aside. There shall be no costs on the cross-appeals. (Sgd.) "Marc Nadon" J.A. FEDERAL COURT OF APPEAL NAMES OF COUNSEL AND SOLICITORS OF RECORD DOCKETS: A-180-03 & A-181-03 APPEALS FROM ORDERS OF THE TAX COURT OF CANADA DATED MARCH 14, 2003 STYLES OF CAUSE: Peter Kirkwood Holdings Limited v. Her Majesty the Queen Peter Kirkwood v. Her Majesty the Queen PLACE OF HEARING: Vancouver, British Columbia DATE OF HEARING: December 16, 2003 REASONS FOR JUDGMENT OF THE COURT: Létourneau J.A. Nadon J.A. Pelletier J.A. DELIVERED FROM THE BENCH BY: Nadon J.A. APPEARANCES: Christine Hung FOR THE APPELLANT Daniel Bourgeois FOR THE RESPONDENT SOLICITORS OF RECORD: Christine Hung Vancouver, British Columbia FOR THE APPELLANT Morris Rosenberg Deputy Attorney General of Canada Ottawa, Ontario FOR THE RESPONDENT