Sherway Centre Ltd. v. MNR, (2003) 300 N.R. 43 (FCA)

• Judge: Strayer, Evans and Pelletier, JJ.A.
• Court: Federal Court of Appeal (Canada)
• Case Date: November 26, 2002
• Jurisdiction: Canada (Federal)
• Citations: (2003), 300 N.R. 43 (FCA);2003 FCA 26

Sherway Centre Ltd. v. MNR (2003), 300 N.R. 43 (FCA)

MLB headnote and full text

Temp. Cite: [2003] N.R. TBEd. JA.051

Sherway Centre Limited (appellant) v. Her Majesty the Queen (respondent)

(A-707-01; 2003 FCA 26)

Indexed As: Sherway Centre Ltd. v. Minister of National Revenue

Federal Court of Appeal

Strayer, Evans and Pelletier, JJ.A.

January 21, 2003.

Summary:

Sherway Centre Ltd. appealed against income tax reassessments for the years 1989, 1990 and 1991. The Tax Court of Canada dismissed the appeal. See 2001 D.T.C. 1021. Sherway appealed.

The Federal Court of Appeal dismissed the appeal.

Income Tax - Topic 7845

Returns, assessments, payment and appeals - Assessments and reassessments - Time for - The Federal Court of Appeal held that Sherway could deduct inter­est paid on certain mort­gage bonds from its 1987 and 1988 income - The principle on which the deci­sion was based would have been equally appli­cable to the interest paid on the bonds in 1989, 1990 and 1991 - How­ever, Sherway did not object to the orig­inal reassessments for those years and the time for objecting expired - Section 152(4.3) of the Income Tax Act authorized or, at the taxpayer's request, required the Minister to reassess, outside the normal period, after a success­ful appeal had altered a taxpayer's balance in a particular tax year, "but only to the extent that the reassessment can reasonably be considered to relate to the change in the balance of the taxpayer for the particular year" - The Federal Court of Appeal held that s. 152(4.3) did not auth­orize the Min­ister to reassess 1989-1991 by extending the prin­ciple on which Sherway's success­ful appeal of its 1987 and 1988 reas­sess­ments was based - See paragraphs 19 to 28.

Income Tax - Topic 7872

Returns, assessments, payment and appeals - Objections - Time for - Section 165(1.1) of the Income Tax Act provided that, notwithstanding the periods prescribed in s. 165(1) within which a taxpayer could normally object to an assessment, when an assessment had been made under s. 152(4.3), the taxpayer could object within 90 days of mailing the notice of assess­ment, "but only to the extent that the rea­sons for the objection can reasonably be regarded as relating to any matter that gave rise to the assessment" - The Federal Court of Appeal held that the right to object under s. 165(1.1) did not extend to an objection to a reassessment under s. 152(4.3) when the reason for the objection could not have been the subject of a reassessment under s. 152(4.3) - See para­graphs 29 to 42.

Cases Noticed:

Minister of National Revenue v. Sherway Centre Ltd. (1998), 223 N.R. 93; 98 D.T.C. 6121 (F.C.A.), refd to. [para. 3].

Hill v. The Queen, [1996] 1 C.T.C. 2894 (T.C.C.), dist. [para. 23].

Minister of National Revenue v. Chevron Canada Resources Ltd. (1997), 97 D.T.C. 1173 (T.C.C.), revd. (1998), 232 N.R. 44; 98 D.T.C. 6570 (F.C.A.), refd to. [para. 33].

Statutes Noticed:

Income Tax Act, R.S.C. 1985 (5th Supp.), c. 1, sect. 152(4.3), sect. 152(4.4), sect. 165(1.1)(a), sect. 165(1.1)(e) [para. 18].

Counsel:

L. Meghji and G. Grenon, for the appel­lant;

J.S. Gill, Q.C., and Judith Sheppard, for the respondent.

Solicitors of Record:

Osler, Hoskin & Harcourt, Toronto, Ontario, for the appellant;

Morris Rosenberg, Deputy Attorney Gen­eral of Canada, Ottawa, Ontario, for the respondent.

This appeal was heard at Toronto, Ontario, on November 26, 2002, by Strayer, Evans and Pelletier, JJ.A., of the Federal Court of Appeal. Evans, J.A., delivered the following decision for the court on January 21, 2003.