Tax Court of Canada


Income tax

Administration and enforcement

Prospects of two judges opining on credibility of same witnesses was neither fair, nor in interests of justice

Taxpayer was reassessed for income tax and GST concerning unreported income for four taxation years. Thereafter, taxpayer was also criminally charged with tax evasion for which criminal trial was held, and taxpayer was acquitted on all counts. During criminal proceedings, large body of evidence was seized during various searches of taxpayer’s residence and office, which was ruled inadmissible, and trial proceeded without admission of tainted and excluded evidence. However, while evidence obtained by search warrant during second audit phase was excluded, other evidence was allowed. Taxpayer brought appeals pertaining to Minister’s reassessment but taxpayer also wanted determination pertaining to Rule 58 of Tax Court of Canada Rules about admissibility of evidence which Minister relied upon. Application for determination of certain questions pertaining to Rule 58 of Tax Court of Canada rules. Application dismissed. In circumstances of present case, discretion to order determination of Rule 58 question was declined, because determination of relevant issues would require testimony before motion judge which would most likely need to be repeated before trial judge. Any evidence that was not excluded would be subject of continued viva voce evidence reheard before trial judge and even exclusion of “search warrant” obtained evidence would not obviate need for hearing evidence from same witnesses at trial. Prospects of two judges, after considerable testimony, opining on credibility and weight of same witnesses in same appeals was neither fair, nor consistent to parties nor interests of justice. Properly established preliminary voir dire by trial judge regarding admissibility of this body of factual evidence as more efficacious and efficient method of dealing with exclusion of impugned evidence.

McCartie v. The Queen (2018), 2018 CarswellNat 5271, 2018 TCC 185, Randall S. Bocock J. (T.C.C. [General Procedure]).

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