Legal Issue: Appeal against the Tax Court's interlocutory decision which allowed the Crown to amend its reply to the appellant’s notice of appeal and to withdraw certain admissions.
Key Points:
Tax Court's Decision: Granted the Crown's motion to amend its reply and introduce a new argument supporting the assessment under appeal. The decision also permitted the withdrawal of several admissions previously made by the Crown.
Appellant's Objections:
El Ad Ontario Trust objected to the withdrawal of admissions, arguing the Tax Court erred by not considering the interests of justice in its decision.
The appellant accepted the amendment introducing a new argument as it was expressly permitted by subsection 152(9) of the Income Tax Act.
Federal Court of Appeal's Decision:
Dismissed the appeal, upholding the Tax Court's decision.
The Court found the Tax Court correctly applied legal tests for granting amendments, including the withdrawal of admissions.
It determined that the amendments would assist in resolving the real questions in controversy, without causing injustice compensable by costs.
The appeal was dismissed with costs to the respondent.
Conclusion:
The Federal Court of Appeal's decision reaffirms the discretion of the Tax Court in allowing amendments to pleadings, including the withdrawal of admissions, when it serves the interests of justice and does not result in injustice to the other party. This case highlights the importance of flexibility in legal proceedings to address the real issues at stake.
