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 – Applicant and respondent jointly seeking to have the meaning of “debt” defined in order to settle outstanding issues – What is the legal meaning of “debt” for purposes of the Income Tax Act, R.S.C., 1985, c. 1 (5th Supp.) – Whether Federal Court of Appeal was right to decline to hear a validly-instituted appeal in circumstances where Parliament has conferred to Barejo an appeal as of right and there was no abuse of process.

The parties submitted a pre-hearing question to the Tax Court under Rule 58 of the Tax Court of Canada Rules (General Procedure), S.O.R./90-688a regarding two contracts, entitled “Notes” and issued for $998 million by affiliates of two Canadian banks and guaranteed by them. The Notes were held by St. Lawrence Trading Inc. (“SLT”), an open-ended investment fund incorporated under the laws of the British Virgin Islands. The question was whether the Notes constituted debt for the purposes of the Income Tax Act. The issue raised concerns about whether Barejo Holdings ULC was required to include its share of SLT’s foreign accrual property income pursuant to s. 94.1 of the Act. The provision would only apply if the Notes constituted “debt” within the meaning of s. 94.1.