[1] The appellants brought an action in the Federal Court to enforce what they claimed was a an agreement reached in November of 1995 to settle an income tax appeal. Their action was dismissed on April 4, 2002: MacDonald v. Canada, 2002 D.T.C. 6890 (F.C.T.D.).

[2] The Judge concluded that, although the parties had reached agreement on some issues, there was no consensus ad idem on one issue, namely the methodology for allocating losses among partners. The Judge held that to be an essential aspect of the agreement. That meant that it could not be severed so as to permit the Court to enforce the parties' agreement on the other issues.

[3] Whether the allocation of partnership losses was an essential element of the agreement is either a question of fact or a question of mixed law and fact. The Judge's conclusion on that point will not be disturbed by this Court in the absence of palpable and overriding error. There is no such error in this case.

[4] This appeal will be dismissed with costs.

"Karen R. Sharlow"

J. A.

FEDERAL COURT OF APPEAL

NAMES OF COUNSEL AND SOLICITORS OF RECORD

DOCKET: A-236-02

STYLE OF CAUSE: ROGER K. MACDONALD AND WILLIAM CAMPELL v.

THE QUEEN IN RIGHT OF CANADA

PLACE OF HEARING: Calgary, Alberta

DATE OF HEARING: March 23, 2004

REASONS FOR JUDGMENT OF THE COURT: Rothstein, J.A.

Sharlow, J. A.

Malone, J.A.

DELIVERED

FROM THE BENCH BY: SHARLOW, J.A.

DATED: March 23, 2004

APPEARANCES:

Mr. Martin Zimmerman FOR THE APPELLANTS

Mr. David Stam FOR THE RESPONDENT

SOLICITORS OF RECORD:

Zimmerman & Company FOR THE APPELLANTS

Calgary, Alberta

Morris A. Rosenberg FOR THE RESPONDENT

Deputy Attorney General of Canada

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