Citation: 2006TCC668
Date: 20061205
BETWEEN:
and
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Motion heard on December 4, 2006, at Vancouver, British Columbia
Before: The Honourable Justice D.W. Beaubier
Appearances:
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REASONS FOR ORDER ANDORDER
Beaubier, J.
[1] This motion for a date to hear a motion pursuant to Tax Court of Canada Rules (General Procedure), paragraph 58(1)(a), was made by Appellant's counsel pursuant to Chief Justice Bowman's statement respecting that procedure in Gregory v. Her Majesty the Queen [2000] DTC 2027, paragraph 12. It was heard at Vancouver, British Columbia on December 4, 2006.
[2] The question which the proposed motion asks is as follows:
Did the Applicant, which employed at least five full-time and one or more part-time employees throughout its 2003 and 2004 taxation years, necessarily employ throughout those years "more than five full-time employees", within the meaning of paragraph (c) of the definition of "personal services business" in subsection 125(7) of the Income Tax Act (Canada)?
[3] Paragraph 9 of the Reply to the Notice of Appeal reads:
9. In so confirming the Appellant's tax payable for the 2003 and 2004 taxation years, the Minister relied on the foregoing assumptions of fact and on the additional assumptions of fact:
a) the Appellant employed 7 persons in its business throughout each of its 2003 and 2004 taxation years: 5 full-time employees and 2 part-time employees.
[4] The Appellant's counsel referred to paragraph (c) of the definition of "personal services business" in subsection 125(7) of theIncome Tax Act("Act"), which is key to parts of the assessment in this appeal. It reads:
"personal services business" - "personal services business" carried on by a corporation in a taxation year means a business of providing services where ...
(c) the corporation employs in the business throughout the year more than five full-time employees, or ...
[5] Using a query raised by Rothstein, J.A. in Lerric Investments Corp. v. Her Majesty The Queen 2001 DTC 5169, paragraph 18 that "all that is necessary is that the employer employs more than five full-time employees," the Appellant proposes that the phrase "five full-time employees" might also be phrased "five employees full-time."
[6] But in assumption 8(n) the Minister assumed:
8. In so reassessing the Appellant's tax payable for the 2003 and 2004 taxation years, the Minister relied on the following assumptions of fact:
...
n) during its 2003 and 2004 taxation years, the Appellant did not employ in its business throughout each of those years more than five full-time employees;
[7] Thus, the Minister's pleadings in assumption 8(n) and 9(a) are in conflict if one accepts the Appellant's counsel's proposed interpretation.
[8] Pursuant to paragraph [7] of these reasons, the motion to grant a date is denied because the pleadings are not sufficiently clear to deal with the proposed motion on the pleadings alone pursuant to Rule 58. It is a matter for the Hearing Judge.
[9] Costs are in the cause.
Signed at Vancouver, British Columbia this 5th day of December 2006.
"D.W. Beaubier"
COURT FILE NO.: 2006-1940(IT)G
STYLE OF CAUSE: 489599 B.C. Ltd. v. The Queen
PLACE OF HEARING: Vancouver, British Columbia
DATE OF HEARING: December 4, 2006
REASONS FOR JUDGMENT BY: The Honourable Justice D.W. Beaubier
DATE OF JUDGMENT: December 5, 2006
APPEARANCES:
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Counsel for the Appellant: |
Gordon S. Funt |
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Counsel for the Respondent: |
Karen A. Truscott |
COUNSEL OF RECORD:
Firm: Fraser Milner Casgrain
For the Respondent: John H. Sims, Q.C.
Deputy Attorney General of Canada
Ottawa, Canada