Date: 20001227
Docket: 97-3628-IT-G
BETWEEN:
ALAN McLARTY,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Application heard on December 19, 2000 at Ottawa, Ontario,
by telephone conference call before
the Honourable Judge D. W. Beaubier
Appearances
Counsel for the Appellant: Jehad Haymour and Carman McNary
Counsel for the Respondent: Deborah Horowitz and Wendy Burnham
Amended Reasons for Order and Order
Beaubier, J.T.C.C.
[1] The parties have consented to proceeding on January 17, 2001 at Calgary, Alberta to argue as to "Whether the promissory note provided as consideration by the Appellant is a contingent liability of the Appellant?", pursuant to paragraph 58(1)(a) of the Rules of General Procedure, and to an Order of the Court dated November 1, 2000. The question to be determined is a question of law. Rule 58 reads:
58. (1) A party may apply to the Court,
(a) for the determination, before hearing, of a question of law raised by a pleading in a proceeding where the determination of the question may dispose of all or part of the proceeding, substantially shorten the hearing or result in a substantial saving of costs, or
(b) to strike out a pleading because it discloses no reasonable grounds for appeal or for opposing the appeal,
and the Court may grant judgment accordingly.
(2) No evidence is admissible on an application,
(a) under paragraph (1)(a), except with leave of the Court or on consent of the parties, or
(b) under paragraph (1)(b).
(3) The respondent may apply to the Court to have an appeal dismissed on the ground that,
(a) the Court has no jurisdiction over the subject matter of an appeal,
(b) a condition precedent to instituting a valid appeal has not been met, or
(c) the appellant is without legal capacity to commence or continue the proceeding,
and the Court may grant judgment accordingly.
[2] Counsel for the Respondent has applied to the Court, pursuant to paragraph 58(2)(a) of the Rules, for leave to admit as evidence respecting the question the "promissory note" referred to in paragraphs 9, 10 and 11 of the Notice of Appeal and in paragraph 8 of the Reply. Counsel for the Appellant objects to this.
[3] The Court accepts the premise that one prerequisite to argument of the question is that facts material to the question of law not be in dispute. This is especially true in a tax case in this Court where:
1. The Minister is a third party to the transaction in question.
2. The pleadings are brief and may not contain all of the facts.
3. The Minister's assumptions create an onus on the Appellant and carry an import not found in other forms of litigation.
[4] In this case the promissory note sought to be admitted is obviously not a simple document. Moreover, the Appellant is not a party to it. He is an assignee of a portion of it and a maker of the assignment documents. The Appellant's counsels' alternative proposal is that, if the Court admits the promissory note, then other specified documents should also be admitted including the Private Offering Memorandum (described in the assumptions) and the Joint Venture Agreement. In the circumstances described in [3] this is a valid proposal. But it stretches beyond the bounds of pleadings into the field of evidence.
[5] Therefore the Court denies Respondent's counsels' motion to introduce the promissory note proposed because:
1. The Appellant is a mere assignee of it, and not a party to it.
2. There are intervening documents relied upon or executed by the Appellant respecting this promissory note that may affect its interpretation or the liability of the Appellant in this case. They should also be before the Court with the promissory note if the promissory note is permitted. They constitute contested evidence and not pleadings or agreed facts.
[6] On this basis the Court orders that:
1. The motion is returnable for hearing at 9:30 a.m. on January 17, 2001 at the Federal Court of Canada, Canadian Occidental Tower, 3rd Floor, 635-8th Avenue South West, Calgary, Alberta.
2. The promissory note described in the Notice of Appeal, and any other evidence, shall not be admitted either in support of the motion or against it.
Signed at Saskatoon, Canada, this 27th day of December, 2000.
"D.W. Beaubier"
J.T.C.C.