Bechthold Resources Ltd. v. Minister of National Revenue, (1986) 1 F.T.R. 123 (TD)

JudgeAddy, J.
CourtFederal Court (Canada)
Case DateJanuary 13, 1986
JurisdictionCanada (Federal)
Citations(1986), 1 F.T.R. 123 (TD)

Bechthold Resources Ltd. v. MNR (1986), 1 F.T.R. 123 (TD)

MLB headnote and full text

Bechthold Resources Limited v. Minister of National Revenue

(No. T-2937-85)

Indexed As: Bechthold Resources Ltd. v. Minister of National Revenue

Federal Court of Canada

Trial Division

Addy, J.

January 16, 1986.

Summary:

On January 17, 1985, a research and development company designated $30,000,000.00 under s. 194(4) of the Income Tax Act as monies received on the sale of securities. Section 194(1) of the Act made 50% of that amount the tax payable. The Minister of National Revenue levied an assessment for $15,000,000.00 on March 26, 1985, before the company's fiscal year ended (January 22, 1986) and before a return was required to be filed (July 22, 1986). Garnishee proceedings were commenced by issuing a "requirement to pay" on Canada Trust, who held the $15,000,000.00 in escrow. The company submitted that the Minister exceeded his jurisdiction in assessing the tax before a return was filed and applied under s. 18 of the Federal Court Act for certiorari to quash the assessment and the "requirement to pay". The Minister submitted that s. 29 of the Federal Court Act precluded the s. 18 application where the company failed to appeal under the Income Tax Act.

The Federal Court of Canada, Trial Division, dismissed the application. The court held that s. 29 precluded the application under s. 18, even where there was a lack of jurisdiction. The court opined that although an assessment was normally made only after a return was filed, the Income Tax Act made the $15,000,000.00 tax payable on or before the last day of the month following the date of designation.

Courts - Topic 4046

Federal Court of Canada - Jurisdiction - Trial Division - Requirement of lack of other appeals - A taxpayer applied under s. 18 of the Federal Court Act for certiorari to quash an assessment allegedly made without jurisdiction - The Federal Court of Canada, Trial Division, held that s. 29 precluded the application - The court stated that the assessment "can only be reviewed and set aside by way of a regular appeal, either to this court or to the Tax Court following confirmation of the assessment after the filing of a Notice of Objection or, with the consent of the Minister, directly to this court by way of appeal without the formality of a Notice of Objection" - See paragraphs 2 to 13.

Income Tax - Topic 7845

Returns, assessments and appeals - Assessments - Time for - A research and development company designated $30,000,000.00 under s. 194(4) of the Income Tax Act - Fifty percent of that amount was payable as tax - The Minister assessed the tax before the company's fiscal year ended and before a return was required to be filed - The Federal Court of Canada, Trial Division, stated that such an assessment was normally made only after an income tax return was filed, but since the tax was payable on or before the last day of the month following the designation, the Minister "might well have been entitled to assess the applicant as it did following receipt of the designation" - See paragraphs 14 to 28.

Income Tax - Topic 9205

Enforcement - When tax debt arises - A research and development company designated $30,000,000.00 under s. 194(4) of the Income Tax Act as monies received on the sale of securities - Fifty percent of that amount was payable as tax - The company submitted that the tax could only be assessed after the company filed a return and liability for the tax did not arise until that time - The Federal Court of Canada, Trial Division, stated that the Act was clear that the tax was payable on or before the last day of the month following the designation - See paragraphs 14 to 24.

Cases Noticed:

WTC Western Technologies Corporation v. M.N.R. (1986), 1 F.T.R. 119 (F.C.T.D.), disagreed with [para. 6].

M.N.R. v. Parsons et al. (1984), 84 D.T.C. 6345 (F.C.A.), folld. [para. 9].

R. v. Beaudry et al., 71 D.T.C. 5511, refd to. [para. 20].

Lambert v. Minister of National Revenue (1977), 14 N.R. 146; 76 D.T.C. 6373 (F.C.A.), refd to. [para. 21].

R. v. Cyrus J. Moulton Limited, 76 D.T.C. 6239 (F.C.T.D.), refd to. [para. 21].

Abrahams v. M.N.R., 66 D.T.C. 5451 (Ex. Ct.), refd to. [para. 22].

Statutes Noticed:

Income Tax Act, S.C. 1970-71-72, c. 63, sect. 194(1) [para. 17]; sect. 194(4), sect. 195(2), sect. 195(3) [para. 18]; sect. 195(4) [para. 19]; sect. 195(8) [para. 27]; sect. 222 [para. 24]; sect. 224(1) [para. 25].

Federal Court Act, R.S.C. 1970 (2nd Supp.), c. 10, sect. 18 [para. 1]; sect. 29 [para. 5].

Counsel:

Appearances: K.J. Anderson and W.J. Baillie, for the applicant;

J.A. Van Iperen, Q.C., for the respondent.

Solicitors of Record:

Anderson, Baillie & Co., Vancouver, B.C., for the applicant;

F. Iacobucci, Deputy A.G. for Canada, for the respondent.

This application was heard on January 13, 1986, at Vancouver, B.C., before Addy, J., of the Federal Court of Canada, Trial Division, who delivered the following judgment on January 16, 1986.

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    ...N.R. 371 ; 85 D.T.C. 5140 (F.C.A.), refd to. [para. 82]. Bechthold Resources Ltd. v. Minister of National Revenue, [1986] 3 F.C. 116 ; 1 F.T.R. 123 (T.D.), refd to. [para. 82]. Optical Recording Co. v. Minister of National Revenue, [1991] 1 F.C. 309 ; 116 N.R. 200 (F.C.A.), refd to. [......
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    ...Revenue, [1991] 1 F.C. 309 ; 116 N.R. 200 (F.C.A.), refd to. [para. 20]. Bechthold Resources Ltd. v. Minister of National Revenue (1986), 1 F.T.R. 123; 86 D.T.C. 6065 (T.D.), refd to. [para. 20]. Webster v. Canada (Attorney General) (2003), 312 N.R. 235 ; 57 D.T.C. 5701 (F.C.A.), re......
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    ...Revenue (1986), 1 F.T.R. 119; 86 D.T.C. 6027 (F.C.T.D.), consd. [para. 25]. Bechtold Resources Ltd. v. Minister of National Revenue (1986), 1 F.T.R. 123; 86 D.T.C. 6055 (F.C.T.D.), consd. [para. Wilfong, Re; Cathcart v. Lowery, 37 W.W.R.(N.S.) 612; 32 D.L.R.(2d) 477; 37 C.R. 319, consd. [pa......
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    ...v. M.N.R., [1984] 84 D.T.C. 6345; 54 N.R. 227 (F.C.A.), folld. [para. 12]. Bechthold Resources Limited v. Minister of National Revenue (1986), 1 F.T.R. 123, agreed with [para. Queen, The v. Beaudry et al., 71 D.T.C. 55, refd to. [para. 14]. Lambert v. The Queen, 76 D.T.C. 6373, refd to. [pa......
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12 cases
  • JP Morgan Asset Management (Canada) Inc. v. Minister of National Revenue et al., (2013) 450 N.R. 91 (FCA)
    • Canada
    • Canada (Federal) Federal Court of Appeal (Canada)
    • October 24, 2013
    ...N.R. 371 ; 85 D.T.C. 5140 (F.C.A.), refd to. [para. 82]. Bechthold Resources Ltd. v. Minister of National Revenue, [1986] 3 F.C. 116 ; 1 F.T.R. 123 (T.D.), refd to. [para. 82]. Optical Recording Co. v. Minister of National Revenue, [1991] 1 F.C. 309 ; 116 N.R. 200 (F.C.A.), refd to. [......
  • Roitman v. Canada, (2006) 353 N.R. 75 (FCA)
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    • June 27, 2006
    ...Revenue, [1991] 1 F.C. 309 ; 116 N.R. 200 (F.C.A.), refd to. [para. 20]. Bechthold Resources Ltd. v. Minister of National Revenue (1986), 1 F.T.R. 123; 86 D.T.C. 6065 (T.D.), refd to. [para. 20]. Webster v. Canada (Attorney General) (2003), 312 N.R. 235 ; 57 D.T.C. 5701 (F.C.A.), re......
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    ...v. M.N.R., [1984] 84 D.T.C. 6345; 54 N.R. 227 (F.C.A.), folld. [para. 12]. Bechthold Resources Limited v. Minister of National Revenue (1986), 1 F.T.R. 123, agreed with [para. Queen, The v. Beaudry et al., 71 D.T.C. 55, refd to. [para. 14]. Lambert v. The Queen, 76 D.T.C. 6373, refd to. [pa......
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    ...Revenue (1986), 1 F.T.R. 119; 86 D.T.C. 6027 (F.C.T.D.), consd. [para. 25]. Bechtold Resources Ltd. v. Minister of National Revenue (1986), 1 F.T.R. 123; 86 D.T.C. 6055 (F.C.T.D.), consd. [para. Wilfong, Re; Cathcart v. Lowery, 37 W.W.R.(N.S.) 612; 32 D.L.R.(2d) 477; 37 C.R. 319, consd. [pa......
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