SmithKline Beecham Animal Health Inc. v. Minister of National Revenue, 2002 FCA 229

• Judge: Stone, Sharlow and Malone, JJ.A.
• Court: Federal Court of Appeal (Canada)
• Case Date: April 10, 2002
• Jurisdiction: Canada (Federal)
• Citations: 2002 FCA 229;(2002), 291 N.R. 113 (FCA)

SmithKline Beecham v. MNR (2002), 291 N.R. 113 (FCA)

MLB headnote and full text

Temp. Cite: [2002] N.R. TBEd. JN.053

SmithKline Beecham Animal Health Inc. (appellant) v. Her Majesty the Queen (respondent)

(A-86-01; 2002 FCA 229)

Indexed As: SmithKline Beecham Animal Health Inc. v. Minister of National Revenue

Federal Court of Appeal

Stone, Sharlow and Malone, JJ.A.

May 31, 2002.

Summary:

The Tax Court of Canada dismissed Smith­kline's application to compel the Crown to disclose certain information in preparation for an appeal of assessments under the Income Tax Act. Smithkline appealed.

The Federal Court of Appeal dismissed the appeal.

Practice - Topic 4252

Discovery - Examination - Range of - Questions related to issues between the parties - Smithkline manufactured pharma­ceutical products - It purchased an active ingredient from related corporations out­side of Canada - The Minister of National Revenue assessed Smithkline and increased its taxable income, alleging that it paid its suppliers a higher price than it would have if it had dealt with them at arm's length - Smithkline appealed to the Tax Court - During discovery, the Minister objected to questions regarding the profit margins of other pharmaceutical companies and re­fused to provide any financial information on the subject from the Canada Customs and Revenue Agency - A Tax Court judge refused to require the Minister to answer the questions - The Federal Court of Appeal dismissed an appeal - While Smith­kline might have had a basis for attempting to discover this information early in the discovery process, the "door to its dis­coverability" closed when Smithkline com­pleted its examination of the Minister's nominee without asking for it - See para­graphs 33 to 35.

Practice - Topic 4561

Discovery - Production and inspection of documents - General - Bars - [See Prac­tice - Topic 4252 ].

Practice - Topic 4573

Discovery - What documents must be produced - Documents relating to matters in issue - [See Practice - Topic 4252 ].

Cases Noticed:

Compagnie Financière & Commerciale du Pacifique v. Peruvian Guano Co. (1882), 11 Q.B.D. 55 (C.A.), refd to. [para. 24].

Invacare Corp. v. Everest & Jennings Canadian Ltd., [1984] 1 F.C. 856; 55 N.R. 73; 79 C.P.R.(2d) 138 (F.C.A.), refd to. [para. 25].

Boxer and Boxer Holdings Ltd. v. Reesor, Gillespie and Norvan Properties Ltd. (1983), 43 B.C.L.R. 352; 35 C.P.C. 68 (S.C.), refd to. [para. 25].

Ikea Ltd. v. Idea Design Ltd. and Mortimore (No. 2), [1987] 3 F.C. 317; 13 F.T.R. 306; 16 C.P.R.(3d) 65 (T.D.), refd to. [para. 25].

Oro Del Norte S.A. v. Minister of National Revenue, [1990] 2 C.T.C. 67; 90 D.T.C. 6373; 35 F.T.R. 107 (T.D.), refd to. [para. 25].

Ouellet v. Minister of National Revenue, [1994] 1 C.T.C. 2645; 94 D.T.C. 1315 (T.C.C.), refd to. [para. 26].

Owen Holdings Ltd. v. Minister of Nation­al Revenue, [1997] 3 C.T.C. 2286; 97 D.T.C. 380 (T.C.C.), refd to. [para. 26].

Owen Holdings Ltd. v. Minister of Nation­al Revenue, [1997] 3 C.T.C. 351; 97 D.T.C. 5401; 216 N.R. 381 (F.C.A.), refd to. [para. 27].

Special Risks Holdings Inc. v. Minister of National Revenue, [1983] 2 F.C. 743; [1983] C.T.C. 36; 46 N.R. 361; 83 D.T.C. 5046 (F.C.A.), refd to. [para. 29].

R. v. Stinchcombe, [1991] 3 S.C.R. 326; 130 N.R. 277; 120 A.R. 161; 8 W.A.C. 161, refd to. [para. 30].

Chingee et al. v. Chingee et al. (1998), 149 F.T.R. 113 (T.D.), refd to. [para. 36].

Statutes Noticed:

Tax Court of Canada Act Regulations (Can.), Tax Court of Canada Rules (Gen­eral Procedure), rule 82(1), rule 92, rule 95(1) [para. 22].

Tax Court of Canada Rules (General Pro­cedure ) - see Tax Court of Canada Act Regulations (Can.).

Authors and Works Noticed:

OECD Guidelines - see Organization for Economic Co-operation and Develop­ment, OECD Committee on Fiscal Affairs, Transfer Pricing and Multi­national Enterprises (1979).

Organization for Economic Co-operation and Development, OECD Committee on Fiscal Affairs, Transfer Pricing and Multinational Enterprises (1979), gen­erally [para. 6].

Counsel:

Jacques Bernier and Robyn M. Ryan Bell, for the appellant;

Robert McMechan and Tracey McCann, for the respondent.

Solicitors of Record:

Bennett Jones, Toronto, Ontario, for the appellant;

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

This appeal was heard on April 10, 2002, in Toronto, Ontario, by Stone, Sharlow and Malone, JJ.A., of the Federal Court of Appeal. Sharlow, J.A., delivered the follow­ing decision for the court on May 31, 2002.