Date: 20040123
Docket: A-527-03
Citation: 2004 FCA 30
CORAM: STRAYER J.A.
BETWEEN:
PATRICIA TOSSELL
Appellant
and
HER MAJESTY THE QUEEN
Respondent
REASONS FOR ORDER
STRAYER J.A.
[1] Patricia Tossell, the appellant herein, and Larry Peterson were divorced in 1995 or 1996. By Informal Procedure, Tossell filed two income tax appeals in 1998 and 2000 in respect of assessment of payments received by her from her ex-husband in 1995 and 1996. Peterson filed an appeal in 2000 in respect of 1995, 1996 and 1997 under the General Procedure, involving in part at least the same payments.
[2] In February, 2002 the Respondent filed a motion for an order pursuant to subsection 174(3) of the Income Tax Act joining Tossell as a party in Peterson's appeal so that all the issues concerning these payments could be determined in one proceeding where both interested taxpayers would be represented. (Generally speaking, a finding that the payments were non-taxable for him and taxable in her hands, or vice-versa, would affect both of the ex-spouses).
[3] Mogan J. of the Tax Court of Canada made such an order on March 26, 2002. He joined Tossell as a party to Peterson's appeal. He directed that the matter for determination in this proceeding would be the four questions set out in the Respondent's motion to join. He also appeared to recognize that it would be only Peterson's appeal before the Court and that any other issues in that appeal would be dealt with subsequent to the hearing on the four questions involving matters of mutual interest. No mention was made of Tossell's appeal being heard at the same time.
[4] The hearing so ordered took place on September 15-17, 2003. Counsel for the Respondent in a letter of August 14, 2003 to the Tax Court Registrar clearly stated that it was only the reference under section 174 which was to be heard in September, and neither of Tossell's Informal Procedure Appeals were to be heard then.
[5] However, the style of cause of the reasons for judgment includes Peterson's appeal and Tossell's two appeals. According to the trial judge Mogan J. the understanding at the opening of the appeal was that evidence would be presented with respect to the four questions identified in the order joining Tossell to Peterson's appeal. Also at the opening, counsel for the Respondent and for Peterson (no mention is made of counsel for Tossell) confirmed to the Court that the only issues remaining to be decided were those four questions. There was also one agreed statement of facts filed by all parties.
[6] On October 8, 2003, Mogan J. issued separate judgments in respect of each party. In these judgments he allowed Peterson's appeals with costs in respect of 1995, 1996 and 1997, and dismissed Tossell's two appeals without costs in respect of 1995 and 1996.
[7] Tossell has filed an appeal from that judgment. In essence she says that the trial judge erred in his determination of the four questions. She also objects to him having dismissed her appeals in their entirety. She apparently never accepted the position that the four questions would finally determine all matters in her appeals. She says she was led to believe that her appeals were not being heard at the September, 2003 hearing (she refers to the August 14, 2003 letter from counsel for the Respondent cited above). She says that she had wanted to call additional witnesses in respect of her appeals but had abandoned that plan due to her understanding that her appeals were not to be heard n September, 2003. As the order of Mogan J. of March 26, 2002 only made her a party to Peterson's appeal she objects to her appeal having been heard and disposed of in the September, 2003 process.
[8] Her appeal here only names Her Majesty as respondent. The Respondent brings this motion to have the appeal quashed on the basis that "it does not appeal the determination made under section 174 . . . which is final and conclusive". In the alternative, the Respondent asks that Peterson be added as a party to the appeal.
[9] I am mystified by the suggestion that the appeal does not appeal the section 174 determination. The appeal is stated to be from a Tax Court judgment of October 8, 2003 bearing the docket numbers of Tossell's dismissed appeals. It is clear from the content of , and reasons for, that judgment, that it includes a section 174 determination and I have little doubt that counsel for the Respondent understands to what it refers. Tossell is also of the view, as I understand it, that there were other issues in her appeals which should not have been disposed of in what was supposed to be a proceeding confined to the four questions. She says there was further evidence she wished to submit on these other issues. From the record I believe this aspect of her appeal should proceed as well.
[10] I believe that the appeal should be allowed to proceed but subject to ensuring that all interested parties are represented. If the appellant were to succeed in establishing, for example, that the payments were not taxable in her hands this would mean that in principle they were taxable in her ex-husband's hands, but presumably that could not bind Peterson unless he is a party. The Respondent would therefore be prejudiced by what would be only a partial appeal of the decision based on the joint Tax Court Reasons of October 8, 2003.
[11] I am therefore going to order that Peterson be made a respondent in this appeal. Counsel for the Respondent will be responsible for providing Peterson with the necessary documents and the appeal will therefore proceed on the basis that within 45 days after the required documents are served on Peterson the parties will file an agreement as to the contents of the appeal book.
[12] This order is given on condition that the Respondent be responsible to pay any costs awarded in favour of Peterson in the appeal.
(s) "B.L. Strayer"
J.A.
NAMES OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: A-527-03
STYLE OF CAUSE: Patricia Tossell v. Her Majesty the Queen
MOTION DEALT WITH IN WRITING WITHOUT APPEARANCE OF PARTIES
REASONS FOR ORDER OF THE HONOURABLE MR. JUSTICE STRAYER
DATED: January 23, 2004
WRITTEN REPRESENTATIONS:
Ms. Patricia Tossell
Sault Ste Marie, Ontario ON HER OWN BEHALF
Ms. Justine Malone
Department of Justice
Ottawa, Ontario FOR THE RESPONDENT
SOLICITORS OF RECORD:
Ms. Patricia Tossell
Sault Ste Marie, Ontario ON HER OWN BEHALF
Mr. Morris Rosenberg
Deputy Attorney General of Canada
Ottawa,Ontario FOR THE RESPONDENT