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GOODS AND SERVICES TAX (GST) - Tax Court of Canada - Motions - Admissions

Monday, October 28, 2019 @ 8:23 AM  

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Motion by the appellant Georgeson Shareholder Communication Canada Inc. (Georgeson) for judgment allowing its appeal and vacating the assessments made by the Minister of National Revenue. Georgeson’s business consisted of a proxy solicitation business and an asset reunification business. The appeal related to the asset reunification business. The Minister assessed Georgeson under s. 296 of the Excise Tax Act in respect of its goods and services tax/harmonized sales tax (GST/HST). The Minister increased the net tax owed by Georgeson for the assessed periods on the basis that Georgeson failed to charge and collect GST/HST on payments (commissions) it received from clients located in Canada in conducting its asset reunification business. The Minister determined that the commissions were paid with respect to services that were taxable supplies. The only issue raised by Georgeson in its appeal was whether it was required to charge and collect GST/HST for those services. Georgeson sought to obtain a judgment allowing the appeal based on admissions made by the respondent in her pleadings and during examination for discovery. Georgeson took the position that s. 170.1 of the Tax Court of Canada Rules (General Procedure) was not limited to rendering judgments on admissions only where there were multiple issues in appeal. Georgeson further submitted that the admissions were sufficient for the Court to allow its motion and grant a judgment on admissions. The respondent agreed that, under s. 170.1 of the Rules, it was possible to obtain a judgment on admissions where there was only one issue in an appeal. However, the respondent submitted that the admissions did not sufficiently cover all the requisite elements for the issue to be disposed of without a trial. The respondent took the position that the law with respect to financial services was not sufficiently clear to allow judgment on admissions and that there was a serious question of law to be argued. The respondent also submitted that there was a serious question of fact outstanding.

HELD: Motion dismissed. A party could apply for a judgment on admissions pursuant to s. 170.1 of the Rules when there was only one issue in appeal. However, the application of s. 170.1 of the Rules was limited to situations where, because of the admissions, there was nothing in controversy in the appeal before the Tax Court of Canada. If there was controversy, the use of s. 58(1), and not 170.1, of the Rules was appropriate. A party in a Tax Court of Canada proceeding ought not to be entitled to circumvent the exercise of the Court’s discretion under s. 58(1) of the Rules by bringing a motion for judgment on admissions and seeking a question of law, fact, or mixed law and fact argued and determined on the hearing of such a motion. There was controversy in this case. The law was not settled on a specific issue which was at the centre of the case. To the Court’s knowledge, the courts had not yet determined whether, for the purpose of the application of the Excise Tax Act, the constituent elements of a supply made under a contract between a supplier of the service and the recipient could be considered as part of a single supply made to another recipient. Therefore, there was an argument to be made by the parties on that issue. Furthermore, because of the positions taken by the parties on that issue, the relevant facts could not be identified. It was therefore impossible to determine whether the admissions were sufficient for the Court to render a judgment on admissions.

Georgeson Shareholder Communication Canada Inc. v. Canada, [2019] T.C.J. No. 157, Tax Court of Canada, S. Ouimet J., September 4, 2019. Digest No. TLD-October282019001