Registration
SOR/2004-103 27 April, 2004

TAX COURT OF CANADA ACT

Rules Amending the Tax Court of Canada Rules of Procedure Respecting the Excise Tax Act (Informal Procedure)

Whereas, pursuant to subsection 22(3) (see footnote a) of the Tax Court of Canada Act, the rules committee of the Tax Court of Canada published a copy of the proposed Rules Amending the Tax Court of Canada Rules of Procedure Respecting the Excise Tax Act (Informal Procedure), substantially in the annexed form, in the Canada Gazette, Part I, on August 30, 2003, and invited any interested person to make representations with respect to the proposed Rules;

Therefore, the rules committee of the Tax Court of Canada, pursuant to section 20 (see footnote b) of the Tax Court of Canada Act and subject to the approval of the governor in council, hereby makes, effective on the date of publication in the Canada Gazette, the annexed Rules Amending the Tax Court of Canada Rules of Procedure Respecting the Excise Tax Act (Informal Procedure).

Ottawa, December 16, 2003

Column 1	Column 2
Alban Garon Chief Justice	Donald G.H. Bowman Associate Chief Justice
Robert Emond Chief Administrator of the Courts Administration Services
Michael J. Bonner	Edwin G. Kroft
Louise Lamarre Proulx	Ian MacGregor
Campbell J. Miller	Maurice A. Régnier

P.C. 2004-500 27 April, 2004

Her Excellency the Governor General in Council, on the recommendation of the Minister of Justice, pursuant to subsection 20(1) (see footnote c) of the Tax Court of Canada Act, hereby approves the annexed Rules Amending the Tax Court of Canada Rules of Procedure Respecting the Excise Tax Act (Informal Procedure).

RULES AMENDING THE TAX COURT OF CANADA
RULES OF PROCEDURE RESPECTING THE EXCISE
TAX ACT (INFORMAL PROCEDURE)

AMENDMENTS

1. The long title of the Tax Court of Canada Rules of Procedure Respecting the Excise Tax Act (Informal Procedure) (see footnote 1) is replaced by the following:

RULES OF PRACTICE AND PROCEDURE OF THE TAX COURT OF CANADA IN RESPECT OF APPEALS UNDER PART IX OF THE EXCISE TAX ACT (INFORMAL PROCEDURE)

2. The definitions "Registrar" and "Registry" in section 2 of the Rules is replaced by the following:

"Registrar" means the person appointed as Registrar of the Court by the Chief Administrator of the Courts Administration Service in consultation with the Chief Justice. (greffier)

"Registry" means the Registry established by the Chief Administrator of the Courts Administration Service at the principal office of the Court at 200 Kent Street, 2nd Floor, Ottawa, Ontario K1A 0M1 (telephone: (613) 992-0901 or 1-800-927-5499; fax: (613) 957-9034; website: www.tcc-cci.gc.ca) or at any other local office of the Court specified in notices published by the Court. (greffe)

3. (1) Subsection 4(1) of the Rules is replaced by the following:

4. (1) An appeal referred to in section 3 shall be made in writing and set out, in general terms, the reasons for the appeal and the relevant facts. An appeal may be brought by a notice in the form set out in Schedule 4, but no special form of pleadings is required.

(2) The heading before subsection 4(7) and subsections 4(7) and (8) of the Rules are repealed.

4. The Rules are amended by adding the following after section 4:

Appellant's Address for Service of Documents

5. Subsection 9(1) of the Rules is replaced by the following:

9. (1) Costs on an appeal shall be at the discretion of the judge by whom the appeal is disposed of in the circumstances set out in section 18.3009 of the Act, which provides:

"18.3009 (1) If an appeal referred to in section 18.3001 is allowed, the Court shall reimburse to the person who brought the appeal the filing fee paid by that person under paragraph 18.15(3)(b). The Court may, in accordance with the rules of Court, award costs to that person if the judgment reduces the amount in dispute by more than one half and

(a) in the case of an appeal under Part V.1 of the Customs Act, the amount in dispute does not exceed $10,000;

(b) in the case of an appeal under the Excise Act, 2001

(i) the amount in dispute does not exceed $25,000, and
(ii) the total of sales by the person for the prior calendar year did not exceed $1,000,000; or

(c) in the case of an appeal under Part IX of the Excise Tax Act,

(i) the amount in dispute does not exceed $7,000, and
(ii) the aggregate of supplies for the prior fiscal year of the person did not exceed $1,000,000.

(2) The Court may, in deciding under subsection (1) whether to award costs, consider any written offer of settlement made at any time after the notice of appeal is filed."

6. Paragraphs 10(a) to (d) of the Rules are replaced by the following:

(a) for the preparation of a notice of appeal or for advice relating to the appeal, $185;

(b) for preparing for a hearing, $250;

(c) for the conduct of a hearing, $375 for each half day or part of a half day; and

(d) for the taxation of costs, $60.

7. The Rules are amended by adding the following after section 10:

10.1 Unless otherwise directed by the Court, where an appellant is represented or assisted by an advisor other than counsel, disbursements in respect of services referred to in section 10 may be allowed on the taxation of party and party costs in an amount not to exceed one half of the amounts listed in section 10.

10.2 (1) Such other disbursements may be allowed as were essential for the conduct of the appeal, if it is established that the disbursements were made or that the party is liable for them.

(2) There may be allowed all services, sales, use or consumption taxes and other like taxes paid or payable on any counsel fees and disbursements allowed if it is established that such taxes have been paid or are payable and are not otherwise reimbursed or reimbursable in any manner whatever, including, without restriction, by means of claims for input tax credits in respect of such taxes.

8. Subsections 11(3) and (4) of the Rules are repealed.

9. The Rules are amended by adding the following after section 13:

Costs in Vexatious Proceedings

13.1 Where a judge has made an order under section 19.1 of the Act, costs may be awarded against the person in respect of whom the order has been made.

10. Section 14 of the Rules is replaced by the following:

14. An application by the Attorney General of Canada to remove an appeal from the informal procedure to the general procedure shall be by motion and the Court may give such directions as are necessary for the subsequent conduct of the appeal. There shall be no additional filing fee for proceeding in the general procedure, unless the Court so directs.

11. Subsection 15(1) of the Rules is replaced by the following:

15. (1) Where a person who has appealed under Part IX of the Excise Tax Act has not elected in the notice of appeal that section 18.3001 and sections 18.3003 to 18.302 (Informal Procedure) of the Act shall apply, that person may, within 90 days from the date on which the reply is served or within such additional time as the Court may, on motion for special reasons, allow, make such an election.

12. (1) Subsection 16(2) of the French version of the Rules is replaced by the following:

(2) La demande présentée en application du paragraphe (1) peut se faire conformément au modèle figurant à l'annexe 16(1) — OPPOSITION ou à l'annexe 16(2) — REQUÊTE, selon le cas.

(2) Subsection 16(3) of the Rules is replaced by the following:

(3) An application made under subsection (1) shall be made by filing with the Registrar, in the same manner as appeals are filed under subsections 4(3) and (5), three copies of the application made to the Minister accompanied by three copies of the notice of objection or the request, as the case may be, and three copies of the Minister's decision, if any.

(3) The footnote to subparagraph 16(5)(a)(i) of the Rules is replaced by the following:

^* Subsection 301(1.1) of the Excise Tax Act provides:

"(1.1) Any person who has been assessed and who objects to the assessment may, within ninety days after the day notice of the assessment is sent to the person, file with the Minister a notice of objection in the prescribed form and manner setting out the reasons for the objection and all relevant facts."

13. Subsection 16.1(2) of the Rules is replaced by the following:

(2) An application under subsection (1) shall be made by filing with the Registrar, in the same manner as appeals are filed under subsections 4(3) and (5), three copies of the application accompanied by three copies of the notice of appeal.

14. The Rules are amended by adding the following after section 18:

19. (1) Failure to comply with these rules shall not render any proceedings void unless the Court so directs, but such proceedings may be set aside either in whole or in part as irregular and may be amended or otherwise dealt with in such manner and on such terms as, in the opinion of the Court, the circumstances of the case require.

(2) Where a person makes an application to set aside a proceeding for irregularity, the objections intended to be put forward shall be stated clearly in the application.

(3) The Court may, where and as necessary in the interests of justice, dispense with compliance with any rule at any time.

(4) Where matters are not provided for in these rules, the practice shall be determined by the Court, either on a motion for directions or after the event if no such motion has been made.

Contempt of Court

20. (1) A person is guilty of contempt of court who

(a) at a hearing of the Court fails to maintain a respectful attitude, remain silent or refrain from showing approval or disapproval of the proceeding;

(b) wilfully disobeys a process or order of the Court;

(c) acts in such a way as to interfere with the orderly administration of justice or to impair the authority or dignity of the Court;

(d) is an officer of the Court and fails to perform his or her duties;

(e) is a sheriff or bailiff and does not execute a writ forthwith or does not make a return thereof; or

(f) contrary to these rules and without lawful excuse,

(i) refuses or neglects to obey a subpoena or to attend at the time and place appointed for his or her examination for discovery,
(ii) refuses to be sworn or to affirm or to answer any question put to him or her,
(iii) refuses or neglects to produce or permit to be inspected any document or other property, or
(iv) refuses or neglects to answer interrogatories or to make discovery of documents.

(2) Subject to subsection (6), before a person may be found in contempt of court, the person alleged to be in contempt shall be served with an order, made on the motion of a person who has an interest in the proceeding or at the Court's own initiative, requiring the person alleged to be in contempt

(a) to appear before a judge at a time and place stipulated in the order;

(b) to be prepared to hear proof of the act with which the person is charged, which shall be described in the order with sufficient particularity to enable the person to know the nature of the case against the person; and

(c) to be prepared to present any defence that the person may have.

(3) A motion for an order under subsection (2) may be made ex parte.

(4) An order may be made under subsection (2) if the Court is satisfied that there is a prima facie case that contempt has been committed.

(5) An order under subsection (2) shall be personally served, together with any supporting documents, unless otherwise ordered by the Court.

(6) In a case of urgency, a person may be found in contempt of court for an act committed in the presence of a judge in the exercise of his or her functions and condemned at once, provided that the person has first been called on to justify his or her behaviour.

(7) A finding of contempt shall be based on proof beyond a reasonable doubt.

(8) A person alleged to be in contempt may not be compelled to testify.

(9) Where the Court considers it necessary, it may request the assistance of the Attorney General of Canada or any other person in relation to any proceedings for contempt.

(10) Where a person is found to be in contempt, a judge may order, in addition to any other order made in respect of the proceedings, any or all of the following:

(a) that the person be imprisoned for a period of less than two years;

(b) that the person pay a fine;

(c) that the person do or refrain from doing any act;

(d) that the person's property be sequestered; and

(e) that the person pay costs.

15. Schedule 4 to the Rules is replaced by the following:

SCHEDULE 4

NOTICE OF APPEAL (INFORMAL PROCEDURE)
(SECTION 4)

- - - - - - - - - - - - - - - - - - -

TAX COURT OF CANADA

BETWEEN:

(name)

Appellant,

and

HER MAJESTY THE QUEEN,

Respondent.

NOTICE OF APPEAL

TAKE NOTICE THAT (name) appeals to the Court from (identify the assessment(s) (which include(s) a reassessment and an additional assessment) under appeal, including the date of the assessment(s) and the period to which the assessment(s) relate(s)).

A. Reasons for the appeal. Here state why you say the assessment(s) is (are) wrong.

B. Statement of relevant facts in support of the appeal.

I ELECT to have the informal procedure provided by sections 18.3001 and 18.3003 to 18.302 of the Tax Court of Canada Act apply to this appeal.

16. Schedule 8 to the Rules is replaced by the following:

SCHEDULE 8

NOTICE OF DISCONTINUANCE
(INFORMAL PROCEDURE)
(SECTION 8)

- - - - - - - - - - - -- - - - - - -

TAX COURT OF CANADA

BETWEEN:

(name)

Appellant,

and

HER MAJESTY THE QUEEN,

Respondent.

NOTICE OF DISCONTINUANCE

TAKE NOTICE THAT the appellant discontinues the appeal from (identify the assessment(s) (which include(s) a reassessment and an additional assessment) under the appeal, including date of assessment(s) and the period to which the assessment(s) relate(s)).

17. Schedule 16(1) to the Rules is replaced by the following:

SCHEDULE 16(1) — OBJECTION

APPLICATION FOR EXTENSION OF TIME FOR THE
FILING OF A NOTICE OF OBJECTION (INFORMAL
PROCEDURE) (SUBSECTION 16(2))

- - - - - - - - - - - -- - - - - - -

TAX COURT OF CANADA

BETWEEN:

(name)

Applicant,

and

HER MAJESTY THE QUEEN,

Respondent.

APPLICATION FOR EXTENSION OF TIME FOR THE
FILING OF A NOTICE OF OBJECTION

I HEREBY apply for an order extending the time within which a notice of objection to an assessment (here identify the assessment(s) (which include(s) a reassessment and an additional assessment) and the period to which the assessment(s) relate(s)) may be filed.

Here state why it was not possible to file the notice of objection within the time specified for doing so and any other relevant reasons in support of the application.^*

^* PLEASE NOTE that three copies of this application accompanied by three copies of the application made to the Minister, three copies of the notice of objection and three copies of the Minister's decision, if any, must be filed with the Registrar of the Tax Court of Canada in the same manner as appeals are filed under subsections 4(3) and (5).

18. The footnote to schedule 16(2) to the Rules is replaced by the following:

^* PLEASE NOTE that three copies of this application accompanied by three copies of the application made to the Minister, three copies of the request and three copies of the Minister's decision, if any, must be filed with the Registrar of the Tax Court of Canada in the same manner as appeals are filed under subsections 4(3) and (5).

19. Schedule 16.1 to the Rules is replaced by the following:

SCHEDULE 16.1

APPLICATION FOR EXTENSION OF TIME WITHIN
WHICH AN APPEAL MAY BE INSTITUTED
(INFORMAL PROCEDURE)
(SUBSECTION 16.1(1))

- - - - - - - - - - - -- - - - - - -

TAX COURT OF CANADA

BETWEEN:

(name)

Applicant,

and

HER MAJESTY THE QUEEN,

Respondent.

APPLICATION FOR EXTENSION OF TIME WITHIN WHICH AN APPEAL MAY BE INSTITUTED

I HEREBY apply for an order extending the time within which an appeal may be instituted (identify the assessment(s) (which include(s) a reassessment and an additional assessment) and the period to which the assessment(s) relate(s)).

Here set out the reasons why the appeal to the Court was not instituted before the expiration of 90 days after the day the notice of assessment was sent and any other relevant reasons in support of the application.^*

^* PLEASE NOTE that three copies of this application accompanied by three copies of a notice of appeal must be filed with the Registrar of the Tax Court of Canada in the same manner as appeals are filed under subsections 4(3) and (5).

20. The English version of the Rules are amended by replacing the words "Chief Judge" with the words "Chief Justice" wherever they occurs in the following provisions:

(a) subsection 12(1); and

(b) subsection 17(2).

REGULATORY IMPACT
ANALYSIS STATEMENT

(This statement is not part of the Rules.)

Description

The Tax Court of Canada Act provides that rules regulating the pleadings, practice and procedure in the Tax Court are established by a rules committee, subject to the approval of the Governor in Council.

The attached amended Rules were prepared by the rules committee and concern the Tax Court of Canada Rules Respecting the Excise Tax Act (Informal Procedure).

Many of the amendments to the Rules reflect the coming in force of the Courts Administration Service Act (S.C. 2002, c. 8), pursuant to which the Tax Court of Canada was granted the status of a superior court of record. Rules have been created to address the issues of contempt of court and costs in vexatious proceedings. References in the English version of the rules to "Chief Judge" have also been amended to read "Chief Justice".

The Rules addressing the issue of costs have been amended. The allowance for services of counsel has been increased to reflect the increased cost of litigation. A new rule has also been created whereby disbursements related to the services of an advisor other than counsel are permitted on a lesser scale.

Other amendments are of a technical nature. Section 4 is amended to clarify the manner of instituting an appeal. Section 14 is amended to state that where a matter is transferred to the General Procedure, there shall be no additional filing fee unless the Court orders otherwise. A new section 19 has been added to address situations where the Rules are silent on a particular point of procedure. Other amendments take account of previous legislative changes that have not been reflected in the Rules.

Alternatives

No other alternatives were considered as the Tax Court of Canada Act requires the Court's rules to be amended by way of regulation.

Benefits and Costs

The majority of the amendments to these Rules are of a technical nature and will have little impact on the manner in which appeals proceed. The amendments to the costs provisions of the Rules reflect the increased cost of litigation as well as the fact that appellants under this procedure are often represented by or assisted by advisors who are not legal counsel. It is expected that these changes will have little financial impact.

Consultation

The amendments were published in substantially the same form in the Canada Gazette, Part I, of August 30, 2003, following which no comments were received.

Contact

J. David Power
Legal Counsel and Administrative Officer
Courts Administration Service
200 Kent Street, 2nd Floor
Ottawa, Ontario
K1A 0M1
Telephone: (613) 947-0322
Fax: (613) 943-8449
E-mail: david.power@cas-satj.gc.ca

Footnote a

R.S., c. 51 (4th Supp.), s. 7

Footnote b

S.C. 2002, c. 8, s. 78

Footnote c

S.C. 2002, c. 8, s. 78

Footnote 1

SOR/92-42

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