Date: 20000914
Docket: A-457-98
| CORAM: DÉCARY, J.A. |
MCDONALD, J.A.
MALONE, J.A.
BETWEEN:
FEDDERLY TRANSPORTATION LTD.
Appellant
- and -
HER MAJESTY THE QUEEN
Respondent
REASONS FOR JUDGMENT
(Delivered Orally from the Bench on
Thursday, September 14, 2000 in Vancouver)
DÉCARY, J.A.
[1] The appeal and cross-appeal in this matter deal with the imposition of the Goods and Services Tax (GST) to a British Columbia corporation carrying on a trucking business. Part of that business consists of brokering contracts for independent truckers to haul loads on their trucks. The Tax Court Judge allowed the taxpayer's appeal only for the purpose of excluding from the imposition of the GST any reimbursement which the taxpayer received from the independent truckers with respect to the cost of a licence or insurance.
[2] At the very end of his reasons (reported at [1998] G.S.T.C. 77), the Judge made the following observation:
| "If the Appellant had called a responsible officer or employee as a witness, I would have relied less on assumptions and inferences for the facts necessary to decide this case". (page. 19) |
[3] He could have added: "If the Notice of Appeal and the Reply to the Notice of Appeal had not been so poorly phrased, I could have examined the issues raised on the appeal in a more satisfactory way."
[4] Judge Mogan, in our view, did the best he could in the circumstances. He was faced with pleadings that, to say the least, were erratic on both sides, and with a taxpayer who refused to testify and declined to produce any witness. A taxpayer who elects not to produce any witness, including himself, at the hearing of his appeal to challenge the assumptions made or the evidence brought forward by the Minister, is courting disaster. The appellant should feel fortunate that the Judge found partially in his favour despite the very little evidence that was adduced.
[5] On the pleadings and on the evidence which was before him, it was open to Judge Mogan to decide that there were two services being supplied in the instant case by the appellant, i.e. a brokerage service and an administrative service, and that only those expenses incurred in the supply of the brokerage service (i.e. the cost of the licence and of the insurance) could be zero-rated in application of the deeming provision of section 178 (now repealed) of the Excise Tax Act.
[6] Counsel for the appellant spent a great amount of time reading selectively from the transcript to convince us, first, that exhibit R-4 had not been properly filed and, second, that it was inadmissible hearsay. He also argued that had he known that the Judge would rely on that exhibit, he would have filed rebuttal evidence. Unfortunately for counsel, a reading of the full transcript makes it clear that the document was indeed filed and that counsel nevertheless chose not to attempt to contradict it through his own witness. It was not improper for the Judge, in the very unusual context in which this case developed, to rely on this exhibit which was nothing more than a sample of the contracts usually entered into by the appellant which had been given to the respondent's auditor by the appellant's bookkeeper in the course of the auditor's inspection pursuant to section 288 of the Act.
[7] The appeal by the taxpayer and the cross-appeal by Her Majesty the Queen will therefore be dismissed. There will be no order as to costs.
(Sgd.) "Robert Décary"
J.A.
September 14, 2000
Vancouver, British Columbia
Date: 20000914
Docket: A-457-98
CORAM: Décary, J.A.,
McDonald, J.A.,
Malone, J.A.
BETWEEN:
FEDDERLY TRANSPORTATION LTD.
Appellant
- and -
HER MAJESTY THE QUEEN
Respondent
Heard at Vancouver, British Columbia, on September 11, 2000.
JUDGMENT delivered orally from the Bench at Vancouver, British Columbia, on September 14, 2000
REASONS FOR JUDGMENT BY: Décary, J.A.
FEDERAL COURT OF APPEAL
NAMES OF COUNSEL AND SOLICITORS OF RECORD
| DOCKET: A-457-98 |
| STYLE OF CAUSE: Fedderly Transportation Ltd |
v.
Her Majesty the Queen
| PLACE OF HEARING: Vancouver, British Columbia |
| DATE OF HEARING: September 11, 2000 |
REASONS FOR JUDGMENT BY DÉCARY, J.A.
| CONCURRED IN BY: McDonald, J.A., and Malone, J.A. |
| DATED: September 14, 2000 |
APPEARANCES:
Mr. Timothy W. Clarke
| Ms. Kirstan Jenkins For the Appellant |
| Ms. Patricia Babcock For the Respondent |
SOLICITORS OF RECORD:
Bull, Housser & Tupper
Barristers & Solicitors
| Vancouver, BC For the Appellant |
Morris Rosenberg
Deputy Attorney
| General of Canada For the Respondent |