Consumers' Gas Co. v. MNR, (1983) 52 N.R. 106 (FCA)

• Judge: Urie, Stone, JJ., and Lalande, D.J.
• Court: Federal Court of Appeal (Canada)
• Case Date: December 15, 1983
• Jurisdiction: Canada (Federal)
• Citations: (1983), 52 N.R. 106 (FCA)

Consumers' Gas Co. v. MNR (1983), 52 N.R. 106 (FCA)

MLB headnote and full text

Consumers' Gas Company Ltd. v. M.N.R.

(A-985-82)

Indexed As: Consumers' Gas Co. Ltd. v. Minister of National Revenue

Federal Court of Appeal

Urie, Stone, JJ., and Lalande, D.J.

December 15, 1983.

Summary:

Consumers' Gas Co. commonly relocated portions of its pipelines at the request of customers, who reimbursed Consumers' Gas for all or part of the relocation costs. Consumers' Gas appealed from the refusal of the Minister of National Revenue to permit the adding of the relocation costs to undepreciated capital cost. The Federal Court of Canada, Trial Division, in a judgment reported [1983] 1 F.C 314, allowed the appeal. The Minister appealed, claiming in part that, if the relocation costs could be added to undepreciated capital cost, the amount reimbursed should be included in income.

The Federal Court of Appeal dismissed the appeal and held that the relocation costs could be added to undepreciated capital cost. The court refused to consider whether the reimbursements were income, because the Minister raised the issue only on appeal and not in the pleadings.

Income Tax - Topic 1178

Income from business or property - Deductions - Capital cost allowance - Capital cost - What constitutes - Consumers' Gas Co. commonly relocated portions of its pipelines at the request of customers, who reimbursed Consumers' Gas for all or part of the relocation costs - The Federal Court of Appeal held that Consumers' Gas was entitled to add the relocation costs to its undepreciated capital cost - See paragraph 34.

Practice - Topic 1617

Pleadings - Defence - Issues to be raised must be pleaded - Consumers' Gas Co. commonly relocated portions of its pipelines at the request of customers, who reimbursed Consumers' Gas for all or part of the relocation costs - The trial court ruled that Consumers' was entitled to add the relocation costs to undepreciated capital cost - On appeal the Minister argued for the first time that, if the relocation costs could be added to undepreciated capital costs, the reimbursements should be added to income - The Federal Court of Appeal held that the Minister could not raise the issue of whether the reimbursements were income, because the issue had not been pleaded - See paragraphs 10 to 29.

Practice - Topic 1622

Pleadings - Defence - Statutes - Requirement of pleading - The Minister of National Revenue on appeal for the first time raised reliance on a particular section of the Income Tax Act - The Federal Court of Appeal held that the Minister could not rely upon the section, because reliance on the section was not pleaded - See paragraphs 26 to 29.

Practice - Topic 9012

Appeals - Restrictions on argument on appeal - Issues not raised at trial or in pleadings - The Federal Court of Appeal refused to hear an issue raised on appeal for the first time by the Minister of National Revenue, because the issue was not raised in the pleadings or at trial and the court could not be satisfied beyond reasonable doubt that all requisite evidence had been adduced to enable the taxpayer to rebut the Minister's new position either at trial or on appeal - See paragraphs 30 to 32.

Cases Noticed:

Canadian Pacific Limited v. M.N.R., [1978] 2 F.C. 439; 19 N.R. 541, appld. [para. 8].

Littler v. M.N.R., [1978] C.T.C. 235; 20 N.R. 541, appld. [para. 26].

R. v. Transworld Shipping Ltd. (1975), 61 D.L.R.(3d) 304, appld. [para. 27].

Kingsdale Securities Co. Ltd. v. M.N.R., [1975] C.T.C. 10, appld. [para. 30].

Counsel:

Gaston Jorre and B. Moon, for the appellant the Minister;

M.S. Bistrisky, for the respondent.

This case was heard on November 15, 1983, at Toronto, Ontario, before Urie, Stone, JJ., and Lalande, D.J., of the Federal Court of Appeal.

On December 15, 1983, Urie, J., delivered the following judgment for the Federal Court of Appeal: