Tax Court of Canada judge notes issues with R. v. Kuchta

A bit of important inside baseball for tax practitioners: at a Tax Court of Canada hearing in Hamilton on December 10 Mr. Justice D’Arcy announced to counsel that the decision in Kuchta v. R.  2015 TCC 289  which the parties had presented in a joint book of authorities, would not be followed or considered due to the comments of the Federal Court of Appeal in High-Crest Enterprises Limited v. Canada, 2017 FCA 88 and Birchcliff Energy Ltd. v. Canada, 2017 FCA 89 to the effect that the Tax Court decisions those appeals were from, were “nullities”.

The reason for the nullity of those TCC decisions was that the Chief Justice had reassigned them from Mr. Justice Jorré to other TCC judges for rendering decisions, after the hearings had taken place, although Jorré J. had presided over the hearings of those matters.

The decision in Kuchta, although never appealed to the FCA, had had exactly the same administrative history, as disclosed at paragraph 1 of the decision I linked above. For this reason, D’Arcy J. informed those present, his view was that Kuchta was similarly nullified.

Kuchta has already been cited once elsewhere by the TCC, in Colitto v. The Queen, 2019 TCC 88.

One other case I am aware of, Romanza Soins Capillaires et Corporels Inc. v. M.N.R., 2015 TCC 328, was similarly disposed of by the Tax Court but was also not appealed. It should be treated with similar suspicion by practitioners. Romanza Soins has twice been cited in other TCC decisions to date. Practitioners should therefore realize that these cases are potentially tainted, and also that Tax Court justices do not appear to be treating them consistently.

Written by Craig Burley

Craig is a tax lawyer in private practice in Hamilton, Ontario. Call Craig at (905) 296-3378 to discuss issues that you think may need independent tax advice. In addition to tax, Craig writes and works publicly on a number of other issues related to law, justice, and public affairs.