Case information

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Case summaries are prepared by the Office of the Registrar of the Supreme Court of Canada (Law Branch). Please note that summaries are not provided to the Judges of the Court. They are placed on the Court file and website for information purposes only.

Taxation – Income tax – Goods and services tax – Contracts – Settlement agreement – Whether a settlement contract as to income tax and GST liability reached between the Canada Revenue Agency and a taxpayer is enforceable against the Canada Revenue Agency – How is such a contract to be interpreted – according to its own terms or according to the intentions of one of the parties only? – Whether property transfer tax, payable as a normal part of property purchase transactions in a number of Canadian jurisdictions, including British Columbia, is deductible in the year of purchase as an expense or whether it must be capitalized along with the purchase price – Excise Tax Act, R.S.C. 1985, c. E-15 – Income Tax Act, R.S.C. 1985, c. 1.

The applicant taxpayer and the Canada Revenue Agency entered into a settlement agreement whereby if the Minister of National Revenue reassessed the applicant in accordance with the terms of the settlement agreement, the taxpayer waived its rights of objection and appeal. The settlement agreement did not set out the final amounts owing by the applicant, just how various amounts at issue were to be increased or decreased on final assessment. Despite the waiver, the applicant brought appeals against its reassessments made under the Excise Tax Act for its reporting periods ending February 28, 2007; April 30, 2007 and April 30, 2008, and under the Income Tax Act for its 2007, 2008 and 2009 taxation years. The applicant argued that the settlement agreement contemplated adjustments to the amounts set out in the original and amended tax returns filed by the taxpayer, whereas the Canada Revenue Agency took the position that the adjustments were to the amounts in its reassessment of the taxpayer.

Motions brought by the respondent to quash the applicant’s appeals were granted by the Tax Court of Canada and an appeal by the applicant was dismissed by the Federal Court of Appeal.