Date: 20000217
Docket: A-480-98
CORAM: ROBERTSON J.A.
ROTHSTEIN J.A.
SEXTON J.A.
BETWEEN:
CANADIAN PACIFIC LIMITED
Appellant
- and -
HER MAJESTY THE QUEEN
Respondent
Heard at Ottawa, Ontario, on Thursday, February 17, 2000
Judgment delivered from the Bench at Ottawa, Ontario, on Thursday, February 17, 2000
REASONS FOR JUDGMENT BY: ROBERTSON J.A.
Date: 20000217
Docket: A-480-98
CORAM: ROBERTSON J.A.
ROTHSTEIN J.A.
SEXTON J.A.
BETWEEN:
CANADIAN PACIFIC LIMITED
Appellant
- and -
HER MAJESTY THE QUEEN
Respondent
REASONS FOR JUDGMENT
(Delivered from the Bench at Ottawa, Ontario
on Thursday, February 17, 2000)
ROBERTSON J.A.
On February 9, 1999 this Court dismissed the appellant taxpayer"s appeal from a judgment, rendered in the Tax Court, on the basis that the facts and legal principles were not sufficiently distinguishable from those in Canada v. Shell Canada Ltd. [1998] 3 F.C. 64 (C.A.). At the same time this Court granted the taxpayer leave to appeal to the Supreme Court in light of the fact that the latter had, in the interim, granted the taxpayer in Shell Canada leave to appeal. On June 21, 1999 the taxpayer filed an application for leave in the Supreme Court for an order granting the taxpayer leave to expand the scope of its appeal to include, inter alia, the applicability of the relatively new general anti-avoidance provision found in section 245 of the Income Tax Act.
In response to that application the respondent Minister of National Revenue asked that the matter be remitted to the Tax Court of Canada. On October 15, 1999 the Supreme Court rendered judgment in Shell Canada and reversed the decision of this Court. On November 10, 1999 the Supreme Court disposed of the taxpayer"s application by ordering that the appellant"s case be remitted to this Court to be dealt with in accordance with the Supreme Court"s reasons in Shell Canada . The taxpayer now moves for judgment in its favour based on that decision. The Minister seeks to have the matter remitted to the Tax Court of Canada.
The taxpayer"s appeal involves two borrowings: the New Zealand dollar borrowing and the Australian dollar borrowing. The Minister has accepted that the appeal should be allowed in respect of the New Zealand borrowing and admits that the analysis of the Supreme Court"s decision in Shell Canada applies to the Australian borrowing, except to the extent that the Supreme Court did not deal with section 245 as it might apply to the Australian borrowing. Specifically, the Minister adopts the position that the new section 245 is applicable to the Australian dollar borrowing and that the matter should be remitted to Judge Bonner of the Tax Court to be determined on the basis of the existing record.
In our view the matter should be remitted to Judge Bonner for two reasons. First, it does not appear that his findings of fact were made with section 245 in mind. Because section 245 is a relatively recent enactment, it would be helpful to have the Tax Court determine the necessary factual findings that are required by that section It would be helpful to this Court to be able to have confidence that all necessary factual findings have been made with respect to the application of that section. Second, with respect to this relatively new and complex anti-avoidance provision, we think it more appropriate for this Court to act in an appellate capacity rather than in one that requires the making of primary legal determinations. In short, this Court would benefit from Judge Bonner"s analysis.
In accordance with the remittance order of the Supreme Court of Canada, the appeal is allowed with respect to the New Zealand borrowing. That matter will be remitted to the Minister for reassessment on the basis that the taxpayer is entitled to the relief sought. With respect to the Australian borrowing, the matter is remitted to Judge Bonner to make such factual and legal determinations as he considers necessary solely with respect to section 245. There shall be no costs on the motion.
"J.T. Robertson"
J.A.