Minister's counsel could not revoke, rescind or avoid pre-existing settlement

Tax - Income tax - Administration and enforcement

Taxpayer was reassessed in 2009 and his claimed capital cost allowance was disallowed. Appeals were filed shortly after and general parameters of settlement were discussed. Taxpayer sought to set aside minutes of settlement and prevent filing of notice of discontinuance. Following receipt of advice by court that appeal was discontinued, taxpayer filed supplementary appeal. Taxpayer’s motion to set aside notice of discontinuance and to reinstate initial appeal was dismissed. Minister’s motion to dismiss appeals and that supplementary appeal was otherwise resolved and dismissed by Court was granted. Facts did not support allegations of fraud on Court at time of filing of discontinuance, recklessness in respect of truth or knowledgeable misrepresentation. Sequence of occurrences, actions and related facts outlined did not satisfy necessary test for utilization of Court’s discretionary jurisdiction to set aside discontinuance. Post-facto and untimely disavowal by single taxpayer, entirely caused by omission of litigation counsel, and subsequent advice of same to Minister’s counsel, could not revoke, rescind or avoid pre-existing settlement reflected in minutes of settlement and discontinuance and fully performed by notices of reassessment. Omissions by litigation counsel clearly impacted solicitor-client relationship, but their time of discovery was simply too late to allow Court to exercise its discretion to invalidate Minutes and resolution of settled litigation. Taxpayer appealed. Appeal dismissed. Tax Court did not err in law or commit any palpable and overriding error. Findings of law and mixed fact and law in reasons were substantially agreed with.

Davies v. Canada (2019), 2019 CarswellNat 3112, 2019 FCA 191, Gauthier J.A., David Stratas J.A., and Laskin J.A. (F.C.A.); affirmed (2016), 2016 CarswellNat 10841, 2016 CarswellNat 1399, 2016 TCC 104, 2016 CCI 104, Randall S. Bocock J. (T.C.C. [General Procedure]).

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