MacKenzie v. Minister of National Revenue, (1993) 65 F.T.R. 298 (TD)

• Judge: Cullen, J.
• Court: Federal Court (Canada)
• Case Date: June 01, 1993
• Jurisdiction: Canada (Federal)
• Citations: (1993), 65 F.T.R. 298 (TD)

MacKenzie v. MNR (1993), 65 F.T.R. 298 (TD)

MLB headnote and full text

E. Gordon MacKenzie (plaintiff) v. Her Majesty the Queen (defendant)

(T-2297-88)

Indexed As: MacKenzie v. Minister of National Revenue

Federal Court of Canada

Trial Division

Cullen, J.

June 10, 1993.

Summary:

In 1986, the Minister reassessed a tax­payer's income tax liability for the 1980, 1981, 1982 and 1983 taxation years by deeming the loss for each year for all farming business carried on by the taxpayer to be $5,000. The taxpayer objected and the Minister confirmed the assessments. The taxpayer appealed the reassessment to the Tax Court of Canada. The Tax Court dis­missed the appeal. The taxpayer applied for a declaratory relief.

The Federal Court of Canada, Trial Divi­sion, dismissed the action.

Income Tax - Topic 1136

Income from business or property - De­ductions for farming losses - A taxpayer was engaged in the land-assembly aspect of the oil business - The taxpayer pur­chased a farm and began to purchase and train horses for equestrian competition - When the oil business slowed, the taxpayer spent the majority of his time on the horse business - Nevertheless, the horse business lost substantial sums of money which the taxpayer deducted in calculating his income - However, under s. 31(1) of the Income Tax Act, a taxpayer whose chief source of income was neither farming nor farming and some other source of income, was limited to farm loss deductions of $5,000 - The Minister reassessed and limited the taxpayer's deduction to $5,000 - The Federal Court of Canada, Trial Division, dismissed the taxpayer's appeal - See paragraphs 22 to 31.

Income Tax - Topic 7955

Returns, assessments and appeals - Appeals to tax review board - From nil assessment - A taxpayer deducted certain farming losses in calculating his income - In 1986, the Minister reassessed the taxpayer for the 1980, 1981, 1982 and 1983 taxation years - The Minister deemed the taxpayer's farming business loss to be $5,000 in each of those years per s. 31(1) of the Income Tax Act - The taxpayer appealed - The Minister sub­mitted that the taxpayer could not appeal the reassessments for 1982 and 1983 because they were "nil notices", i.e., writ­ten notification that no tax was payable for those years - Therefore, as there was no assessment to vacate, vary or remit to the Minister, there could be no appeal - The Federal Court of Canada, Trial Division, dismissed the taxpayer's appeal in regard to the 1982 and 1983 taxation years - See paragraphs 16 to 21.

Cases Noticed:

Irving Oil Ltd. v. Minister of National Revenue (1988), 16 F.T.R. 253; 88 D.T.C. 6138 (T.D.), folld. [para. 20].

Bowater Mersey Paper Ltd. v. Minister of National Revenue (1987), 78 N.R. 233; 87 D.T.C. 5382 (F.C.A.), appld. [para. 21].

Moldowan v. Minister of National Rev­enue (1977), 15 N.R. 476; 77 D.T.C. 5213 (S.C.C.), appld. [para. 23].

Hadley v. Minister of National Revenue (1985), 85 D.T.C. 5058 (F.C.T.D.), consd. [para. 23].

Minister of National Revenue v. Connell (1988), 18 F.T.R. 75; 88 D.T.C. 6166 (T.D.), affd. 139 N.R. 204; 92 D.T.C. 6134 (F.C.A.), consd. [para. 25].

Morrissey v. Minister of National Rev­enue, [1989] 2 F.C. 418; 95 N.R. 140 (C.A.), refd to. [para. 27].

Poirier (Bankrupt) v. Minister of National Revenue (1992), 142 N.R. 156; 92 D.T.C. 6335 (F.C.A.), consd. [para. 25].

Statutes Noticed:

Income Tax Act, S.C. 1970-71-72, c. 63, sect. 31(1) [para. 22].

Counsel:

E. Gordon MacKenzie, represented him­self;

L.A.T. Williams, for the defendant.

Solicitors of Record:

John C. Tait, Q.C., Deputy Attorney Gen­eral of Canada, Ottawa, Ontario, for the de­fend­ant.

This matter was heard on June 1, 1993, in Calgary, Alberta, by Cullen, J., of the Fed­eral Court of Canada, Trial Division, who delivered the following decision in Ottawa, Ontario, on June 10, 1993.