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Administrative law - Appeal - Judicial review - Statutes - Interpretation - Taxation - Assessment - Whether, for the purpose of the application of s. 18.5 of the Federal Courts Act, R.S.C. 1985, c. F-7, there is a distinction between assessments under s. 152 of the Income Tax Act, R.S.C. 1985, c. 1 (5th Supp.), (the "Act") and assessments under s. 160 of the Act, on the basis that the former are "primary tax liability" assessments and the latter are "vicarious tax liability" assessments - Whether assessments under s. 150 of the Act are subject to judicial review for alleged unreasonable delay although s. 160(2) provides that the assessments may be made "at any time".

In 1989, the Respondents sold their shares in their corporation ("York") to a third party. Prior to the share transfer, York paid approximately $13.5 million to the various Respondents as directors' fees, retiring allowances, managements fees, dividends, and loans, leaving assets to cover the estimated income tax liability of York. The share purchaser planned to use York's cash to purchase seismic data for which it would claim a tax deduction. When less of a deduction was allowed, the Minister of National Revenue issued a notice of assessment against York for its taxation year ending 1989, for an amount of $3,247,074.05, including penalties and interest. In February 2001, the Minister issued assessments under s. 160 of the Act against the Respondents relating to York's 1989 taxation year, claiming that as there had been non-arm's length transfers of property, the Respondents were jointly and severally liable for the taxes owed by York, which now amounted to $6,664,634.60. The Respondents filed notices of objection in May 2001, which went unanswered, and in February 2005 filed an application for judicial review. They sought an order that the s. 160 assessments and proceedings taken were unlawful, or alternatively, quashing the assessments. They argued that the delay in issuing the assessments caused them significant prejudice and amounted to an abuse of process. The Crown argued that the notice of application should be struck because the Tax Court of Canada and not the Federal Court has exclusive jurisdiction to invalidate a tax assessment. The Federal Court allowed the Crown's motion for an order striking out the application for judicial review of the Respondents' income tax assessments. The Federal Court of Appeal allowed the Respondents' appeal, set aside the Order and dismissed the Appellants' motion to strike the application for judicial review, with Rothstein J.A. dissenting.