Tax Court of Canada


Income tax

Administration and enforcement

Motion to determine whether Minister could issue notice of determination of partnership granted

Determination of question. Minister of National Revenue issued partnership notices of determination to taxpayers, which concluded that partnerships were not valid and determined that losses reported by partnerships were nil for three years. Taxpayers appealed. Taxpayers brought motions to determine question of whether Minister could issue valid notice of determination in respect of purported partnership after concluding that no partnership existed. Motions granted. Proposed question under R. 58 of Tax Court of Canada Rules (General Procedure) would be determined at second stage of hearing. First two requirements of R. 58 of Rules were met, as question was question of law or mixed law and fact, which was raised in pleadings. Question raised very narrow legal question about validity of issuance of notices of determination in context of narrow set of facts. Determination of question before hearing may dispose of all or part of proceeding, or result in substantially shorter hearing or substantial savings in costs. Answering question in favour of taxpayers may invalidate notices of determination. If question were answered in favour of Minister, preliminary issue dealing with validity of notices would be addressed and would be res judicata. Hearing of appeals should be shortened by amount of time equal to time taken to argue question at second stage of hearing. Question had not been fully considered in other cases. Considering legislative scheme of partnership determination provisions, it could not be said that question had no reasonable prospect of success.

2078970 Ontario Inc. v. The Queen (2017), 2017 CarswellNat 5899, 2017 TCC 173, Henry A. Visser J. (T.C.C. [General Procedure]).

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