Smerchanski v. Minister of National Revenue, (1974) 2 N.R. 197 (FCA)

• Judge: Thurlow, J., MacKay, D.J. and Bastin, D.J.
• Court: Federal Court of Appeal (Canada)
• Case Date: March 13, 1974
• Jurisdiction: Canada (Federal)
• Citations: (1974), 2 N.R. 197 (FCA)

Smerchanski v. MNR (1974), 2 N.R. 197 (FCA)

MLB headnote and full text

Smerchanski v. Minister of National Revenue

Indexed As: Smerchanski v. Minister of National Revenue

Federal Court of Appeal

Thurlow, J., MacKay, D.J. and Bastin, D.J.

March 13, 1974.

Summary:

This case arose out of an application by a taxpayer to set aside reassessments of income tax made against the taxpayer for the years 1945 to 1959. The taxpayer in 1964 was threatened with prosecution for tax evasion and the taxpayer agreed to assessments for the years 1945 to 1959 which totalled $951,610. The taxpayer claimed that the policy of the Income Tax Act prohibited a taxpayer from waiving his statutory rights respecting assessments and appeals. The Trial Division of the Federal Court of Canada dismissed the taxpayer's appeal from the reassessments of his income tax for the years 1945 to 1949. The Trial Division held that the taxpayer could validly waive his statutory rights to appeal the assessments.

On appeal to the Federal Court of Appeal the appeal was dismissed and the judgment of the Trial Division was affirmed. The Federal Court of Appeal held that the taxpayer could validly waive his statutory rights granted under the provisions of the Income Tax Act - see paragraphs 21 and 38. Bastin, D.J., dissenting, would have declared invalid the taxpayer's consent to the assessments because the consent was obtained by duress and because the Minister's actions were not authorized by the Income Tax Act and were an abuse of power - see paragraphs 55 and 56.

Income Tax - Topic 7928

Assessments and appeals - Waiver - Whether a taxpayer under investigation for tax evasion can validly waive his statutory rights respecting assessment and appeals - A taxpayer agreed to assessments which totalled $951,610. for the years 1945 to 1959 and the taxpayer waived his statutory rights to appeal the assessments - The Federal Court of Appeal held that the taxpayer could validly waive his statutory rights of appeal.

Cases Noticed:

Woon v. M.N.R., [1950] Ex.C.R. 18, dist. [para. 12].

M.N.R. v. The Lakeview Golf Club Limited, [1952] Ex.C.R. 522, dist. [para. 12].

Maritime Electric Company Limited v. General Dairies Limited, [1937] A.C. 610, dist. [para. 12].

Anctil v. Manufactures Life Insurance Company, [1937] A.C. 604, dist. [para. 12].

Carling Export Brewing and Malting Company Limited v. The King, [1899] A.C. 604, dist. [para. 12].

Inland Revenue Commissioners v. Brooks, [1915] A.C. 478, dist. [para. 12].

Jones v. Victoria Graving Dock Co., [1877] 2 Q.B.D. 314, folld. [para. 38].

Re West Devon Great Consuls Mine (1888), 38 Ch. D. 51, folld. [para. 38].

Johnston v. M.N.R., [1948] S.C.R. 486, folld. [para. 52].

Statutes Noticed:

Income Tax Act, R.S.C. 1952, c. 148, sect. 132(3) [para. 33].

Counsel:

A.J. Irving, for the appellant;

W. Williston, Q.C., Miss H. Henderson and G.J. Kroft, for the respondent.

This case was heard by the Federal Court of Appeal on February 11, 12, 13, 14 and 15, 1974. Judgment was delivered on March 13, 1974 and the following opinions were filed:

THURLOW, J. - see paragraphs 1 to 25;

MACKAY, D.J. - see paragraphs 26 to 43;

BASTIN, D.J. - see paragraphs 44 to 64.