Tax Court of Canada Update

June 08, 2020

Written By Jehad Haymour and Ed Kroft, Q.C.

Chief Justice Rossiter and Associate Chief Justice Lamarre of the Tax Court of Canada provided an update on the resumption of operations of the Tax Court to the members of the Canadian Bar Association Tax Court Bench and Bar Committee in a virtual meeting held on June 4, 2020. (Jehad Haymour is a member of the Canadian Bar Association Tax Court Bench and Bar Committee.)

The Chief Justice's update focused on two key matters: Anticipated summer hearings and a new settlement measure aimed at resolving appeals stalled by the shutdown of Tax Court operations.

Resumption of Tax Court Operations and Anticipated Hearings Schedule

The Tax Court is attempting to best utilize the normal Tax Court July/August holiday break period to schedule hearings as a means of reducing the backlog of cancelled hearings. The Chief Justice outlined the anticipated hearing schedule for the major centres (Vancouver, Calgary, Edmonton, Toronto, Ottawa, Montreal, Quebec City and Halifax) as follows:

• Informal Procedure trials may be set down starting the week of August 17, 2020.
• General Procedure trials (on the priority basis as outlined in last update) may be set down for the period commencing July 27, 2020.

Setting down appeals for hearing will be dependent upon:

1. The ability of Tax Court staff to return to work,
2. The existence of an appropriate level of Tax Court staffing to coordinate the efforts needed to meet these tight hearings timelines,
3. Respecting the timelines in place for giving notice to Informal Procedure litigants and the cooperation of the litigants,
4. Availability of courtroom facilities, and
5. Continued reduction in COVID-19 cases and the further relaxation of restrictions on mobility.

Upon return to the Tax Court offices, the Tax Court Hearings Coordinators will make efforts to send 30-day notices to Informal Procedure litigants. In addition, the Hearings Coordinator will contact General Procedure litigants to coordinate the setting down of General Procedure hearings (potentially starting as early as the end of June, if possible). As outlined previously, priority will be given to parties that had hearings cancelled or disrupted due to the shutdown of Tax Court operations.

Fast Track Settlement Conferences

The Chief Justice also announced a temporary measure for General Procedure matters, being a fast track settlement (FTS) conference initiative meant to reduce the backlog of cases by way of an expedited settlement conference approach. A Practice Note outlining the details related to the FTS conference process will be provided by the Tax Court later this month, but some details were conveyed to the Bench and Bar Committee.

The anticipated approach involves encouraging litigants to begin considering this temporary settlement conference approach. The Tax Court would like to see parties make FTS conference applications in June/July 2020, with the expectation that FTS conferences will be held in October/November 2020. Currently, the Tax Court anticipates only holding physical settlement conferences in Vancouver, Toronto and Montreal and the possibility also exists for FTS Conferences to be heard remotely.

The FTS conference procedure outlined by the Chief Justice was as follows:

• The parties interested in pursuing an FTS conference may jointly, by letter to the Tax Court, request that the Tax Court convene an FTS conference. Unlike other settlement conferences, an FTS conference can only be initiated by a joint application and no party may unilaterally apply. The joint letter will includes a summary outlining the key issues, the positions taken by the parties and why, the procedural steps taken in the litigation to date and the amount in issue. The purpose of the summary is to provide a Tax Court judge reviewing the FTS conference application with sufficient information to determine if such a settlement conference is appropriate for that particular appeal.
• The request for FTS conference is then assigned to a Tax Court Judge for further review.
• The assigned Tax Court judge will determine if the FTS conference is appropriate, given the litigation steps taken to date on the particular appeal. In making this determination, the Tax Court judge may contact each party independently or together to gather more information related to the summary provided. The closer the parties are to a trial date, the more likely it is that the Tax Court will find that a FTS conference should be held.
• If the assigned judge determines that an FTS conference is appropriate, the parties will be advised as to the procedures to be followed, timing of delivery of submissions and materials and the date for the hearing of the FTS conference. The reviewing Tax Court judge will be the judge that presides over the FTS conference and there will be very limited ability to alter the date of that FTS conference.
• The Tax Court judge presiding over the FTS conference will prepare for the settlement conference in the normal course, including reviewing the materials and the research related to the appeal.
• As is normally the case with settlement conferences, the judge that presides over the FTS conference will not be the trial judge that preside over the hearing of the Tax Court appeal, if the appeal is not settled.

Bennett Jones Insights

The Tax Court objective is to resume court operations in a manner that will allow it to address the backlog of stalled appeals as quickly as possible, but keeping in mind health and safety concerns.

Tax Court litigants must be prepared to assist in furthering this objective. The Chief Justice advised (and tax litigation counsel should heed this advice) that parties with a hearing cancelled or stalled should start lining up witnesses and preparing for an expedient trial that may resume or start by the end of July.

Also, consideration should be given as to whether your Tax Court appeal is at the appropriate stage and is of the type that the FTS conference initiative will present an opportunity to conclusively resolve the appeal. The Court will issue some guidance on the FTS conference initiative later this month, but now is a good time to revisit Tax Court appeals to be first off the mark, if such an FTS conference be advantageous.

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