Creteco-Gunner Corporation v. R. – FCA: Taxpayer not denied procedural fairness in Tax Court - appeal dismissed

Creteco-Gunner Corporation v. R. – FCA:  Taxpayer not denied procedural fairness in Tax Court -  appeal dismissed

Creteco-Gunner v. Minister of National Revenue (March 27, 2019 – 2019 FCA 58, Dawson (author), Webb, Near JJ.A.).

Précis:   The taxpayer was assessed EI and CPP in respect of its workers.  It appealed to the Tax Court and the appeal was dismissed from the bench.  It further appealed to the Federal Court of Appeal raising two arguments:

  1. The Tax Court Judge had denied the taxpayer procedural fairness in not assisting with the taxpayer’s conduct of its case.
  2. The Tax Court Judge relied upon a document marked for identification only.

The Court of Appeal rejected both arguments and dismissed the appeal with costs.

Decision:   The Court of Appeal had little sympathy for the procedural fairness argument:

[4]  I reject the submission that the Tax Court breached the principles of procedural fairness for the following reasons. First, I accept the respondent’s submission that the appellant was given full notice of the case to be met through the replies that were filed to the notices of appeal. I note that the appellant did not point to any matters that arose at the hearing that did not flow directly from the respondent’s case as set out in the replies. Similarly, the documents produced at the hearing by the respondent were related to the assumptions set out in the replies. Second, neither the Tax Court of Canada Rules of Procedure respecting the Canada Pension Plan, SOR/90-689, nor the Tax Court of Canada Rules of Procedure respecting the Employment Insurance Act, SOR/90-690, contain any requirement that the parties disclose documents or exchange lists of witnesses in advance of the hearing. Third, the appellant’s agent did not ask the Tax Court for any adjournment. In the circumstances of this case, I see no obligation on the part of the Tax Court to suggest an adjournment. Finally, the Court did not err by failing to allow rebuttal evidence. The appellant had full notice of the respondent’s position that the appellant operated as G-Force Deployment Group or G-Force Industrial Deployment Action and had the opportunity to introduce evidence to rebut the Crown’s assumption when it adduced its evidence. The appellant did not, and instead sought to adduce new evidence that was simply confirmatory of its case in chief. Evidence which is simply a rebuttal of evidence led as part of the defence case, and which could have been led in chief, generally should not be admitted as rebuttal evidence. I see no unfairness in the circumstances of this case.

Similarly the Court of Appeal rejected the argument based on the document marked for identification only:

[6]  I reject these submissions as well. The information contained in the document marked for identification was also adduced in oral evidence by the appeals officer who testified for the respondent. In any event, in light of the many findings of fact made by the Tax Court this evidence was not in any way determinative of the result. The appellant’s argument regarding the balance of probabilities is similarly misplaced. The Tax Court made a number of findings of fact supporting the conclusion that the workers were engaged in insurable and pensionable employment with the appellant. These findings were supported by both documentary evidence and oral testimony. No palpable or overriding error has been made out, nor has any error been demonstrated in the Court’s finding that the appellant’s sole witness was not a credible witness. The Court concluded that the appellant’s witness was intentionally vague in some of his testimony and that he intentionally attempted to mislead the Court about both his role and the appellant’s role as the employer of the workers. Finally, in its written submissions the appellant argues that in a previous decision the Tax Court had found the appellant to have had no taxable supplies during the reporting periods at issue in that case, however the Tax Court failed to consider this prior result when it decided the present case. I accept the respondent’s submission that the fact that the appellant had no taxable supplies during a particular period is not relevant to the issue of whether the workers were employed by the appellant during the periods here in issue.

In the result the appeal was dismissed with costs.