Minister of National Revenue v. Gunnar Mining Limited, [1970] CTC 152, 70 DTC 6135

JACKETT, P.:—This is an appeal from an order of the Tax Appeal Board dated September 30, 1969, whereby the Board purported to amend a judgment delivered by the Board on September 24, 1963 so that the judgment, which had previously dismissed the appellant’s appeals from its assessments under Part I of the Income Tax Act for its 1958, 1959 and 1960 taxation years, allowed such appeals in part; and it is also an appeal from the judgment as so amended.

The sole ground for the appeal is that the Board had no power, jurisdiction or authority to make the order by which it purported to amend its decision.

Both parties take the position that the Court has jurisdiction to hear his appeal and I am satisfied that this is so. If the Board had power to deliver the judgment as it appeared to be after the amending order, which judgment first came into existence on December 30, 1969, it was by virtue of Section 59 of the Income Tax Act, as read with Section 92 thereof;* [1] and, by virtue of Section 60 thereof, ‘‘The Minister . . . may, within 120 days from the day on which the Registrar of the Tax Appeal Board mails the decision on an appeal under section 59 to the Minister . . . , appeal to the Exchequer Court of Canada’’. In my view, this right of appeal extends to a case where the attack is based on a lack of jurisdiction in the Tax Appeal Board to deliver the judgment attackedt and, that being so, it follows that it extends to a case where, as I conceive it to be here, the attack is really based on a contention that, while the matter falls within the Board’s jurisdiction, that Court had no power or authority to deliver the Judgment under attack.

On one view, the only facts relevant to the disposition of this appeal are that, after duly hearing an appeal that was within its jurisdiction, the Board, on September 24, 1963, delivered a judgment reading,

The appeal is dismissed.

and that, after hearing an application by the appellant for a further order, on December 30, 1969, the Board made an order reading as follows:

It is ordered that the Judgment of the Board herein dated September 24, 1963 dismissing the appellant’s appeal in respect of its 1958, 1959 and 1960 taxation years is hereby amended to read as follows:

“The appeal with regard to the 1958, 1959 and 1960 taxation years is hereby allowed in part for the purpose only of referring the relevant assessments back to the Minister for reassessment taking into account the capital cost allowance and deferred exploration and development expense agreed upon between the Minister and the appellant at or prior to the hearing of the appeal before the Board on March 19, 1963, as being the amounts to which the appellant is entitled in respect of the said taxation years, the appeal with regard to the 1958, 1959 and 1960 taxation years to be dismissed in all other respects.”

And it is further ordered that the Judgment amended as set out above shall also be dated September 24, 1963, and shall have effect as and from that date.

In order to appreciate the argument, however, I must, before dealing with the question in issue, attempt to explain the somewhat complicated events that resulted in the unusual order that is under attack in this appeal.

by proceedings by way of certiorari. and prohibition. A tribunal exercising a limited statutory jurisdiction has no authority to give a binding decision upon its own jurisdiction and where it wrongfully assumes jurisdiction it follows, as a general rule, that, since what he has done is null, there is nothing to appeal from. But here we have a statute and this is only pertinent on the point of the meaning and effect of the statute.

It has always seemed to me that the proceeding by way of appeal would be the most convenient way of questioning the judgment of any judicial tribunal whose judgment is alleged to be wrong, whether in point of wrongful assumption of jurisdiction, or otherwise. There is no appeal, of course, except by statute and, I repeat, the question arising upon this point is entirely a question of the scope and effect of this statute.

To appreciate the events that led up to the application to the Tax Appeal Board that resulted in the order or judgment of the Board from which this appeal was taken, it is necessary to have in mind several features of the Income Tax Act.

In the first place there is the peculiarity of capital cost allowance that it is only deductible in computing the income for any year to the extent claimed by the taxpayer (Regulation 1100) and the peculiarity of the deduction for “pre-production expenses” that it is only deductible in computing the income for any year to the extent of the amount that would otherwise be the taxpayer’s income for the year (e.g. Section 83A(8)), so that deductions will not be made under either of these heads, in computing income for a year, to the extent that a taxpayer otherwise escapes taxation for the year because it has no ‘ ‘ income ” or by reason of exempting provisions in the Act. Such allowances or deductions not deducted or deductible in any year remain available for use in a subsequent year when they are required.

In the second place, one must have in mind the broad outline of the procedure for determination and payment of the tax under Part I of the Income Tax Act. This may be summarized, to the extent relevant, as follows :

(a) a corporation is required to file its tax return for a year within six months from the end of the year (Section 44(1) (a)) and the Minister is required to examine the return and “assess” with all due despatch and is authorized to re-assess or make additional assessments within four years from the original assessment (and in certain other cases that are not relevant here) (Section 46) ;

(b) a corporation is required to make monthly payments on account of tax (Section 50) and to pay the balance of the assessed tax within thirty days after the assessment ;

(c) the first step to be taken by a taxpayer who objects to an assessment is to send a notice of objection to the Minister and, upon receipt of such a notice, the Minister is required to reconsider the assessment and vacate, confirm or vary the assessment or re-assess’’ (Section 58)—(a re-assessment made pursuant to Section 58 is not invalid because it is not made within the four years contemplated by Section 46 (Section 58(4)) ;

(d) the second step open to an objecting taxpayer is an appeal to the Tax Appeal Board (Section 59), which Board may dispose of an appeal inter alia by “dismissing it’’, or “allowing it” and either vacating or varying the assess- ment or referring the assessment back to the Minister for reconsideration and re-assessment (Section 92) ;

(e) after the decision of the Board, either party may appeal to the Exchequer Court (Section 60), which may dispose of the appeal by ‘‘dismissing it’’, or ‘‘allowing it’’ and either vacating or varying the assessment, restoring the assessment, or referring the assessment back to the Minister for reconsideration and re-assessment (Section 100) ;

(f) finally, there is an appeal from the decision of the Exchequer Court of Canada, which appeal is governed by the Exchequer Court Act and the Supreme Court of Canada Act.

The third feature of the Act, which one should have in mind when trying to appreciate what happened in this case, is that, while the Minister is required to refund overpayments of tax after assessment (Section 57(1)), the interest payable on such refunds is computed at 3 per cent (Section 57(3)) unless, by a decision of the Minister under Section 58 on a notice of objection, or by a decision of the Tax Appeal Board, the Exchequer Court or the Supreme Court, it is finally determined that the tax is less than the amount assessed under Section 46, in which event the interest is computed at 6 per cent (Section 57(3a)).

I turn now to what happened in this case.

It would appear that, in making its return for the years in question, the taxpayer did not deduct all the capital cost allowance or pre-production expenses that were available to it because, presumably, other substantive claims made by it, if accepted by the Minister, made such deductions unnecessary or unavailable. The Minister, however, did not accept such other substantive claims and, by its notice of objection, the appellant, in addition to asking for reconsideration of such claims, put forward claims in the alternative for capital cost allowance.* [2] The Minister, however, in disposing of the notices of objection under Section 58 merely confirmed the assessments.

The taxpayer then appealed to the Tax Appeal Board, and by its notice of appeal to the Board, carefully spelled out not only its main substantive claims but also its alternative claims to capital cost allowance and for deduction of pre-production expenses. When the matter came on for hearing before the Board, counsel for the parties made it clear that the parties were in agreement that, if the taxpayer did not succeed on its main substantive claims, it was nevertheless entitled to capital cost allow- wance, deduction of pre-production expenses, or both, and that, in the event that the Board decided against the taxpayer on such main questions, the judgment of the Board should be that the assessment be referred back to the Minister for reconsideration and re-assessment on the basis that it was not entitled to the main relief sought but was to be allowed capital cost allowance, deduction of pre-production expenses, or both. When the Tax Appeal Board, after a hearing that was thereafter restricted to the main substantive claims of the taxpayer, came to deliver judgment, it decided against the taxpayer on such claims and dismissed the appeal, overlooking the agreement of the parties that there should nevertheless be a reference back.

Following that judgment, counsel for the taxpayer wrote to counsel for the Minister on January 16, 1964, as follows:

We have been instructed to appeal the adverse decision rendered by the Tax Appeal Board on September 24, 1963 with respect to the above Company’s appeal from its assessments for the years 1958, 1959 and 1960.

You will recall that at the opening of the Tax Appeal Board hearing we agreed, and so stated to the Board, that if the Company was unsuccessful in its principal contentions, any income during the years under appeal otherwise subject to tax could be reduced first, by capital cost allowances and if required, secondly, by deferred exploration deductions (to the extent of the amounts available for this purpose) before reaching the actual net figure on which tax was payable. Further, and for the same reasons, it was agreed, and the Board was so advised, that no charge for interest on late or deficient instalment payments with respect to the 1960 assessment would be properly payable.* [3]

My notes indicate that we instructed Mr. Weldon in rendering his decision to refer the matter back to the Minister for re-assessment, in any event, in order that effect could be given to these agreements.

The decision of the Board simply dismisses the appeals and confirms the relevant re-assessments.

I would prefer to keep the Notice of Appeal to the Exchequer Court as simple as possible and hence to avoid reference in it to the matters dealt with in the following paragraphs of the Notice of Appeal to the Tax Appeal Board.

(a) Paragraph 10 of the Allegations of Fact.

(b) Paragraph 3 of the Statement of Reasons.

(c) Sentences 2 and 3 of Paragraph 4 of the Statement of Reasons.

(d) Paragraphs 5, 6 and 8 of the Statement of Reasons.

If you can now indicate the Department’s agreement to reassessment of the years in question in any event on the same basis as the agreements reached before the hearing at the Tax Appeal Board level, simplicity in the Notice of Appeal to the Exchequer Court could be achieved.

Could you let me have your views on this matter.

To this letter, counsel for the Minister replied on January 17, 1964, as follows:

This will acknowledge receipt of your letter of January 16th, 1964, and will confirm the verbal message the writer left with your secretary today.

We agree that in the event the Appellant, Gunnar Mining Limited, is unsuccessful with respect to the principal issue in these appeals which concerns the treatment afforded on assessment of the interest income received by the taxpayer on short term obligations and certain profits from the sale of sulphuric acid, then the Minister will be prepared to re-assess and to reduce the income, first by capital cost allowances and if required, secondly, by deferred exploration deductions (to the extent of the amounts available for this purpose) before reaching the actual net figure on which tax was payable. In addition, in the event that the Crown is successful in this appeal, no charge on late or deferred instalment payments with respect to the 1960 assessment will be properly payable.* [4]

We trust this will enable you to omit the sentences and paragraphs contained in the Notice of Appeal to the Tax Appeal Board and listed on the second page of your letter of January 16th.

Thereafter, the appeals to this Court and the appeal to the Supreme Court of Canada proceeded without reference to the questions of capital cost allowance and pre-production expenses and each appeal resulted simply in the taxpayer’s appeal being dismissed.

After the decision of the Supreme Court of Canada, two self- explanatory letters were written by the Department of National Revenue to the solicitors for the taxpayer. The first was written on March 22, 1968, by Mr. T. Z. Boles, who had acted as counsel for the Minister on the appeal to the Tax Appeal Board, and reads as follows :

Following the judgment of the Supreme Court of Canada in the appeal of the above taxpayer, I have been advised by an appeal assessor of the Department of National Revenue of his proposed re-assessments to allow the taxpayer the deduction of additional capital cost allowance pursuant to an undertaking to that effect given by officials of the Department of National Reve- nue prior to the hearing of the appeal by the Tax Appeal Board and later by the Exchequer Court.

The proposed re-assessments, I am advised, will result in a substantial refund payable to the taxpayer. The question then arises whether such a refund of overpayment of tax is made under the provisions of Section 57(3) or of Section 57 (3a) of the Income Tax Act. If subsection (3) applies, interest at 3% will be paid on the refund whereas under subsection (3a) interest at the rate of 6% will be applied.

In the Notices of Objection and Notices of Appeal to the Tax Appeal Board, the Appellant claimed as an alternative the right to claim additional capital cost allowance in the event that the Tax Appeal Board dismissed the Appellant’s appeal on the main issue involving the right to deduct certain interest payments. This alternative claim was referred to by you in your opening statement at the hearing before the Tax Appeal Board. However, the Minutes of Judgment as given by Mr. Weldon, the presiding member of the Tax Appeal Board, were entered and issued in the following terms: “Appeal dismissed” with no reference whatsoever to the alternative claim. An appeal was taken from these assessments to the Exchequer Court and from the judgment of that Court to the Supreme Court of Canada. The only issue before the Exchequer Court and therefore the only one dealt with by that Court, concerned the disallowance of the interest payments, and as the appeal to the Supreme Court was from the judgment of the Exchequer Court the Supreme Court dealt only with the same issue.

Under these circumstances, I have concluded that the reassessments which the Department of National Revenue now propose to make will not be made pursuant to the provisions of subsection (8a) of Section 57 of the Income Tax Act. The Minister of National Revenue reconsidered the assessments upon receipt of the Notices of Objection as directed by Section 58 of the Income Tax Act and having done so confirmed such assessments. The Minister having so exercised his power and the Courts having upheld the assessments, the Minister, in my opinion, has not the power or authority to reconsider his original decision. In addition, as the judgments of the Tax Appeal Board, Exchequer Court and Supreme Court of Canada respectively make no reference to a claim for additional cost allowance but merely find that the assessments in question were properly made, no re-assessments under the terms of those judgments were necessary. Therefore if it is finally determined because of a claim for additional capital cost allowance that the tax payable by this taxpayer is less than the amount originally assessed under Section 46 of the Income Tax Act, it is not as a result of a decision of the Minister of National Revenue under Section 58 or of any Court decision but arises only to implement an undertaking given by officials of the Department of National Revenue.

I have considered your suggestion that possibly the Minutes of Judgment of the Tax Appeal Board could be amended to refer the assessments back to the Minister for re-assessment. In my view, this would create an impossible situation. If a judgment in those terms had been issued and entered by the Tax Appeal Board originally, it is difficult to predict on what grounds an appeal to the Exchequer Court would have been taken and what the position of the Minister would have been with regard to a cross-appeal. In any event, I believe that the Tax Appeal Board does not have the power to amend this judgment under these circumstances. This question was considered by the Supreme Court of Canada in the case of Paper Machinery Limited et al. v. Ross Engineering Corp. et al., [1934] 2 D.L.R. 239. In the judgment of the Court at page 240, Justice Rinfret states the following:

“The question really is therefore whether there is power in the Court to amend a judgment which has been drawn up and entered. In such a case, the rule followed in England is, we think,—and we see no reason why it should not also be the rule followed by this Court—that there is no power to amend a judgment which has been drawn up and entered, except in two cases: (1) Where there has been a slip in drawing it up, or (2) Where there has been an error in expressing the manifest intention of the Court (Re Swire (1885), 30 Ch.D. 239; Preston Banking Co. v. Allsup & Sons, [1895] 1 Ch. 141; Ainsworth v. Wilding, [1896] 1 Ch. 673). In a very recent case

(MacCarthy v. Agard, [1933] 2 K.B. 417) the authorities were all reviewed and the principle was re-asserted. In that case, although, indeed, all the Judges expressed the view that the circumstances were particularly favourable to the applicant, but because neither of the conditions mentioned were present, the Court of Appeal came to the conclusion that it has no power to interfere. (The rule as stated was approved by the Privy Council in Firm of R.M.K.R.M. v. Firm of M.R.M.V.L., [1926] A.C. 761 at p. 771).”

The recent English case referred to in the above judgment (MacCarthy v. Agard), the principle was stated as follows:

“So far as I am aware, the only cases in which the court can interfere after passing and entering of the judgment are these:

(i) Where there has been an accidental slip in the judgment as drawn up—in which case the court has power to rectify it under Order XXVIII, r. 11; (ii) when a court itself finds that the judgment as drawn up does not correctly state what the court actually decided and intended.”

I am forwarding a copy of this letter to the Appeal Section of the Department of National Revenue with a request for instructions.

I am returning the transcript of the evidence before the Tax Appeal Board which you kindly loaned to me.

The second was written by an assessment officer on April 2, 1968 and reads as follows:

We have been advised by the Department of Justice that any refund which will be issued in respect of the 1958, 1959 and 1960 taxation years, will bear interest of 3% rather than 6% per annum pursuant to Section 57 (3) of the Income Tax Act.

Re-assessments of these years will be prepared as soon as their acceptance in writing has been received.

At that stage the taxpayer took the matter up with the Deputy Minister of National Revenue in Ottawa and, finally, after correspondence and interviews, received a letter from the Deputy Minister dated November 6, 1968, reading as follows:

The matter of re-opening this taxpayer’s 1958, 1959 and 1960 assessments which we discussed some months ago has been considered further.

For the reasons given to you by Mr. T. Z. Boles in his letter of March 22, 1968 I do not believe that the decision of the Tax Appeal Board can be re-opened to permit re-assessments under Section 92 of the Income Tax Act. It is also now too late to reassess under Section 46(4) of that Act.

I am prepared to recommend to the Minister that a submission be made to the Treasury Board under Section 22 of the Financial Administration Act to remit income taxes to the extent of $457,963.90.

There is no statutory authority, however, to pay any interest in respect of the tax being remitted. Because of the time limits, Section 57 of the Income Tax Act is not applicable.

For your information, attached is a calculation showing how the amount of $457,963.90 was determined.

By notice of motion dated November 7, 1969, the taxpayer made the motion to the Tax Appeal Board that resulted in the order amending the judgment that gave rise to this appeal. Mr. Weldon, the member of the Tax Appeal Board who heard the motion, gave reasons for granting it, which read, in part, as follows :

Gunnar’s appeal in respect of its 1958, 1959 and 1960 taxation years came on for hearing before me at the City of Toronto on March 19, 1963. At the conclusion of the hearing of the appeal I reserved judgment and, subsequently, dealt with the two matters in dispute therein in the above-mentioned judgment dated September 24, 1963, which held, first, that the interest income earned by Gunnar’s short term investments purchased out of revenue derived from the operation of its uranium mine was not, itself, derived from the operation of the mine for the purpose of Section 83(5) of the Income Tax Act, R.S.C. 1952, chap. 148, and secondly, that the profit derived from the sale of sulphuric acid from the appellant’s sulphuric acid plant was, similarly, not income derived from the operation of a mine for the purpose of said Section 83(5) of the Act. The said appeal was thereupon dismissed and the relevant assessments confirmed by said judgment dated September 24, 1963. It is now quite apparent, and was, according to the material now before the Board, so apparent shortly after the issuance of the said judgment to counsel who acted for the parties at the original hearing of the appeal on March 19, 1963, namely, R. M. Sedgewick, Esq., Q.C., for the appellant Gunnar and T. Z. Boles, Esq., for the Minister, that, in view of the appellant’s alternative pleading in its Notice of Appeal dated December 26, 1962 and the Board’s unfavourable disposition, from its standpoint, of the two matters in dispute in the appeal, outlined above, the said judgment dated September 24, 1963 should clearly have allowed Gunnar’s appeal in part in respect of its 1958, 1959 and 1960 taxation years—instead of simply dismissing it—for the specific purpose only, after dismissing the appellant’s appeal in respect of the said two main issues in the appeal, of referring the relevant assessments back to the Minister for re-assessment, thereby giving him the opportunity of taking into account the capital cost allowance and deferred exploration and development expense which had previously been agreed to between the Minister and the appellant as being the amounts to which the appellant was entitled in respect of the said taxation years.

As I apprehend the situation in which the appellant now finds itself :

1. The Deputy Minister frankly concedes that Gunnar has overpaid its tax in respect of its 1958, 1959 and 1960 taxation years by the total sum of $469,934.67, and has indicated his willingness to recommend to the Minister that a submission be made to the Treasury Board under Section 22 of the Financial Administration Act, R.S.C. 1952, chap. 116, to remit the said sum of $469,934.67 to Gunnar less the sum of $11,970.77 representing a capital cost allowance adjustment in respect of its 1962 taxation year.

2. The Deputy Minister, however, does not concede that the appellant—having failed to convince the Board in its appeal that it had been incorrectly assessed with regard to the two matters outlined earlier herein—had effectively claimed in its Notice of Appeal, in the alternative, the right to deduct capital cost allowance and deferred exploration and development expense as of September 24, 1963, the date of the Board’s judgment.

3. It appears to be perfectly sound to state that—“if” the judgment issued by me on September 24, 1963 had gone one step further and had referred the relevant assessments in respect of the appellant’s 1958, 1959 and 1960 taxation years back to the Minister for re-assessment thereby giving him the opportunity of taking into account, as of the said date of September 24, 1963 (that date is important because the ultimate purpose of this motion is to establish the appellant’s right to interest at 6% on the amounts of overpayment of tax totalling the sum of $469,934.67 calculated in accordance with subsections (3) and

(3a) of Section 57 of the Act covering interest on overpayments of tax), the capital cost allowance and deferred exploration and development expense which had previously been agreed to between the Minister and the appellant as being the amounts to which the appellant was entitled in respect of the said taxation years—the appellant could then have brought itself within Section 57 (3a) of the Act by pointing to a decision of this Board (a court of record) wherein it was determined that the taxes payable by it in connection with its 1958, 1959 and 1960 taxation years were less than the respective amounts assessed by the relevant assessments under Section 46 of the Act from which an appeal was taken, the Board’s decision making it appear that there had been overpayments of tax for the three taxation years in question.

4. In his above-quoted letter dated November 6, 1968, the Deputy Minister stated that there was no statutory authority to pay any interest (it should be carefully observed that the Act provides for interest at 3% under Section 57(3) on an ordinary overpayment of tax but interest at 6% under Section 57 (3a) where the overpayment is apparent from a decision of the Minister or from one of the three courts mentioned therein) in respect of the tax of $469,934.67 being remitted in connection with the appellant’s 1958, 1959 and 1960 taxation years explaining that Section 57 of the Act was not applicable “because of the time limits”.

5. The Deputy Minister had earlier stated in his letter—“It is also now too late to re-assess under Section 46(4) of the Act”.

6. It has not been possible for me to conclude from the material before me on this motion or from the submissions made by Mr. Bowman on behalf of the Minister in reply to the submissions made by Mr. Kelsey on behalf of the appellant, whether or not the Minister would have been willing to re-assess Gunnar if he had considered himself duly empowered to do so under the Act. The Deputy Minister simply stated the fact, as mentioned in paragraph 5 above, that it was too late to re-assess under Section 46(4) of the Act.

7. It is interesting to note that there is provision under Section 46(4) of the Act for the Minister to re-assess at any time if the taxpayer has filed with him a waiver in prescribed form within 4 years from the day of mailing of a notice of an original assessment. Unfortunately, by the time the battle lines were drawn in this matter, it was too late for the appellant to file the prescribed waiver mentioned above.

8. It should be observed that, unless there are some basi? questions of entitlement involved, capital cost allowances and deferred exploration and development expenses would seem to be purely routine administrative matters which are regularly dealt with by the Minister’s officials. Accordingly, it would appear to be reasonable to conclude that the amendment sought herein by the appellant to my judgment dated September 24, 1963 is plainly administrative in its nature.

9. After carefully reviewing the Deputy Minister’s letter dated November 6, 1968, I cannot help but think that, having satisfied himself that the appellant was entitled to a refund of tax amounting to the sum of $469,934.67 in respect of its 1958, 1959 and 1960 taxation years, he should, at the outset, have decided whether or not the appellant was entitled on the facts of the matter to interest at 3% on the said amount being remitted under Section 57(3) of the Act, and only then have fallen back on his alleged lack of statutory authority to re-assess under Section 46(4) of the Act. By so doing, he would possibly have cleared the way, so to speak, for the Board to amend its judgment dated September 24, 1963 for the purpose of bringing the appellant within both subsections (3) and (8a) of Section 57 of the Act on a consent basis. When all has been said and done, the only reason—that is apparent to me—for not allowing interest at 6% on the sum of $469,934.67 being remitted to the appellant is, unquestionably, the technical statutory objection relied on by the Minister which has arisen through the effluxion of time in a long drawn out litigation and which can readily be overcome by the amendment to judgment dated September 24, 1963, sought by the appellant in its present motion.* [5]

10. It should be carefully noted that the amending judgment now being contemplated does not involve the adducing of new evidence or any further adjudication on the part of the Board.

11. I should like to record in these reasons and to emphasize the fact that, if the matter had been impressed on me more pointedly at the hearing of the appeal, I would have been quite willing to frame the judgment issued by me on September 24, 1963 to comply with the form of judgment now being sought by the appellant. So, in the result, the Board is being asked in this motion to correct a matter which did come up at the hearing of the appeal, which is administrative in its nature, which does not require the adducing of new evidence or further adjudication on the part of the Board, and which does not seem to be in dispute so far as the Minister’s position has been made clear to me.

It should be noted: that the re-assessments mentioned in Mr. Boles’ letter dated March 22, 1968, were never issued; that the Deputy Minister’s letter to the appellant’s solicitors dated November 6, 1968, quoted earlier herein, was obviously intended to provide a final answer to Mr. Sheppard’s 3 letters of June 11, July 4 and August 30, 1968, listed above, and to close out the matter in so far as the Minister was concerned; that re-assessments covering the matters now in dispute were promised by T. Z. Boles, Esq., on behalf of the Minister away back on January 17, 1964, as evidenced by Mr. Boles’ letter of that date; that, if the said re-assessments had been issued, as promised, the appellant would then have had a clear right under the Act to resort to the courts to obtain an adjudication of its rights; that the waiver provision in Section 46(4) of the Act was plainly intended for the sole benefit and protection of taxpayers and was not intended to prevent an assessment sought by a taxpayer, and that, subject only to that provision, since Parliament obviously intended to give the Minister the broadest possible powers of assessment under Section 46, the way appears to have been left open thereunder for him to make an assessment at any time at the request and with the consent of the taxpayer involved having regard to the Minister’s almost impregnable position under subsection (7) of Section 46 which purports to cure any error, defect or omission therein. It has not been possible for me to imagine how an assess- ment made under those circumstances could run counter to Section 46 or the plain overall purpose thereof. Subsection (7) reads as follows:

“46. (7) An assessment shall, subject to being varied or vacated on an objection or appeal under this Part and subject to a re-assessment, be deemed to be valid and binding notwithstanding any error, defect or omission therein or in any proceeding under this Act relating thereto.”

On the basis of the material before me on this motion, there should be a finding embracing the following matters: that the judgment issued by me on September 24, 1963—which is the subject matter of this motion—is and has been deficient since the date of its issue by reason of an inadvertent error of omission in expressing the manifest intention of the Board, which can reasonably be characterized as a “slip”; that, as stated earlier “the said judgment dated September 24, 1963 should clearly have allowed Gunnar’s appeal in part in respect of its 1958, 1959 and 1960 taxation years—instead of simply dismissing it—for the specific purpose only, after dismissing the appellant’s appeal in respect of the said two main issues in the appeal, of referring the relevant assessments back to the Minister for reassessment, thereby giving him the opportunity of taking into account the capital cost allowance and deferred exploration and development expense which had previously been agreed to between the Minister and the appellant as being the amounts to which the appellant was entitled in respect of the said taxation years”; that the above form of judgment was, unquestionably, mentioned in the course of the hearing of the appeal on March 19, 1963 and, if it had not been for the unfortunate error of omission in expressing the manifest intention of the Board in judgment dated September 24, 1963, mentioned above, I would have been quite willing to issue the judgment in that form making it clear, of course, that the appeal was being dismissed in all other respects; that the amending judgment sought by the appellant does not involve the adducing of new evidence or any further adjudication on the part of the Board; that the appellant’s lengthy delay in applying to the Board for the now all-important amendment to its judgment dated September 24, 1963, while regrettable from every standpoint, has been satisfactorily explained away by Mr. Kelsey in the course of his submissions to the Board which are borne out by the material before me on this motion, and that such delay should not be regarded as a barrier to the granting of the relief sought by the appellant.

In light of the material quoted herein, which speaks for itself, and the foregoing reasons and observations, I have come to the conclusion that the appellant’s motion herein to amend or enlarge judgment of this Board issued on September 24, 1963 should be granted, and that the Board should issue an order, and it is hereby ordered accordingly, that a judgment in the following terms should be substituted for the present judgment of the Board herein dated September 24, 1963, the judgment being substituted to be also dated September 24, 1963 and to have effect as and from that date :

“The appeal with regard to the 1958, 1959 and 1960 taxation years should be allowed in part for the purpose only of referring the relevant assessments back to the Minister for re-assessment taking into account the capital cost allowance and deferred exploration and development expense agreed upon between the Minister and the appellant at or prior to the hearing of the appeal before the Board on March 19, 1963, as being the amounts to which the appellant is entitled in respect of the said taxation years, the appeal with regard to the 1958, 1959 and 1960 taxation years to be dismissed in all other respects.”

In reaching the above decision, I have assumed that, under the cases of Prevost v. Bedard and Paper Machinery Limited et al. v. J. O. Ross Engineering Corporation et al., listed below, which were decided in the Supreme Court of Canada and generally under the relevant jurisprudence, I have the power, inherent in me as a member of this Board (a court of record under the Act), to amend or enlarge the judgment of the Board herein signed by me on September 24, 1963 by correcting the error of omission in expressing the manifest intention of the Board therein, as outlined above.

In rejecting Mr. Bowman’s submissions on behalf of the Minister, I have taken the view that, notwithstanding the present practice of treating an appeal from a decision of the Board to the Exchequer Court of Canada as a trial de novo, the basic judgment in this matter is clearly that of the Board dated September 24, 1963, and that the effect of the decisions of the Exchequer Court of Canada and of the Supreme Court of Canada herein has been simply to sustain and confirm that judgment. The fact that there is no provision in the Act or in the Rules of the Board covering the amendment of a judgment after it has been issued is not relevant to this matter, because the amendment in question is being made pursuant to an inherent power in the member of the Board who issued the said judgment to make the necessary amendment thereto, as explained earlier herein.

While the general rule is, according to Halsbury’s Laws of England, that no court or judge has power to rehear, review, alter, or vary any judgment or order after it has been entered or drawn up, the object being to bring litigation to finality, it is subject to a number of exceptions such as the one involved in this matter, i.e. where it is necessary to correct an error of omission in expressing the manifest intention of the Board. While Mr. Kelsey clearly had a steep uphill struggle during a large part of the hearing of the present motion (which continued for a full day) not only because of the unusual nature of the appellant’s application, but also because it was probably the first time such an application had come before the Board, it now appears to me to have been entirely proper application to make under the peculiar circumstances of the matter and, as indicated earlier, should be granted.

This appeal is from the order so made, or from the Judgment created by the order so made. I cannot see that it matters whether it is regarded one way or the other.

The general rule is, of course, that no court can, without special authority, rehear a matter or change its decision on a matter of substantive right after its judgment has been drawn up and entered. It is generally accepted “that the general good of the community” requires ‘‘a final end to be put to litigation”. Compare In re St. Nazaire Company (1879), 12 Ch. D. 88 (C.A.), per Jessel, M.R. at p. 100. See also Preston Banking Company v. William Allsup & Sons, [1895] 1 Ch. 141; Ainsworth v. Wilding, [1896] 1 Ch. 673; Oaley v. Link, [1914] 2 K.B. 734; Firm of R.M.K.R.M. v. Firm of M.R.M.V.L., [1926] A.C. 761; MacCarthy v. Agard, [1933] 2 K.B. 417; Paper Machinery Limited v. J. O. Ross Engineering Corporation, [1934] S.C.R. 186; Webster Co. v. Connors Bros. Ltd., [1936] 2 D.L.R. 164; Meier v. Meier, [1948] P. 89; and Kuziak v. Romuld (1966), 60 D.L.R. (2d) 286. A judgment should normally be reviewed on appeal or, in an appropriate case, be set aside by a new action based on fraud or new evidence. These general rules are, I am satisfied, applicable to the Tax Appeal Board.* [6]

I am satisfied, however, that the Tax Appeal Board, which is a court of record, has the inherent power to change the record! [7] of a judgment pronounced by it so that it will express the order actually made by the Board even though there is nothing in the statute law or the regulations that expressly permits it to do so. See In re Swire (1885), 30 Ch. D. 239, per Cotton, L.J. at p. 243 and Bowen, L.J. at p. 248, and Milson v. Carter, [1893] A.C. 638. In the absence of any express authority such as that conferred on most common law courts and commonly known as the “slip rule’’,t [8] the Board’s power to change the record of its judgment or otherwise make corrections is no greater, and is possibly less, than the power of the Supreme Court of Canada as laid down by the judgment of that Court in Paper Machinery Limited v. J. O. Ross Engineering Corporation, [1934] S.C.R. 186, per Rinfret, J. (as he then was) at p. 188:

The question really is therefore whether there is power in the Court to amend a judgment which has been drawn up and entered. In such a case, the rule followed in England is, we think,—and we see no reason why it should not also be the rule followed by this Court—that there is no power to amend a judgment which has been drawn up and entered, except in two cases: (1) Where there has been a slip in drawing it up, or (2) Where there has been error in expressing the manifest intention of the court (In re Swire (1885), 30 Ch.D. 239; Preston Banking Company v. Allsup & Sons, [1895] 1 Ch. 141; Ainsworth v. Wilding, [1896] 1 Ch. 673). In a very recent case (MacCarthy v. Agard, [1933] 1 K.B. 417), the authorities were all reviewed and the principle was reasserted. In that case, although, indeed, all the judges expressed the view that the circumstances were particularly favourable to the applicant, but because neither of the conditions mentioned were present, the Court of Appeal came to the conclusion that it had no power to interfere. (The rule as stated was approved by the Privy Council in Firm of R.M.K.R.M. v. Firm of M.R.M.V.L., [1926] A.C. 761 at 771-772.)

What happened here would seem to be clear. At the opening of the hearing before the Board, the parties made it clear to the Board that they were in agreement that, even if he taxpayer was unsuccessful in its first attack on the assessment, the appeal should be allowed and there should be a reference back to the Minister for re-assessment, but with a direction that would relate to a secondary matter and not the direction that the taxpayer sought to obtain. This fact was not present in the mind of the member of the Board when he rendered judgment with the result that he delivered a judgment by which he dismissed the appeal. Thinking that it could obtain satisfactory relief without doing so, the taxpayer deliberately refrained from appealing against this error on the part of the Board when it did appeal against its defeat on its first attack on the assessments. After losing its appeals and then finding that it could not obtain satisfactory relief on the secondary matter, it returned to the Board and got the order giving rise to this appeal. It is clear that, when the Board delivered its original judgment, it completely overlooked the agreement of the parties that the appeal should be allowed in any event. This appears from several passages in the Board’s Reasons of September 30, 1969, of which it will be sufficient to refer to only one, viz:

I should like to record in these reasons and to emphasize the fact that, if the matter had been impressed on me more pointedly

(6) Clerical mistakes in judgments or orders, or errors arising therein from any accidental slip or omission, may at any time be corrected by the Court without an appeal.

at the hearing of the appeal, I would have been quite willing to frame the judgment issued by me on September 24, 1963 to comply with the form of judgment now being’ sought by the appellant.

As the matter had been completely overlooked at the time of the judgment of September 24, 1963, it seems to me that the only “intention” of the Board at that time, ‘ manifest,’ or otherwise, was to dismiss the appeal. That being so, within my understanding of the Words as used by Rinfret, J. in the Paper Machinery case, there was no ‘‘error’’ at that time ‘‘in expressing the manifest intention of the Court’’. Obviously, the Board’s reasons for the order appealed from proceed on a different view of those words when they say ‘‘the judgment . which is the subject of this motion is and has been deficient since the date of its issue by reason of an inadvertent error of omission in expressing the manifest intention of the Board . . .’’. According to my understanding of the matter, the 1963 judgment carried out exactly the intention as formulated by the Board at that time.

As I view the matter, the order appealed from can only be supported if the Board has power to substitute one judgment for another so as to do what it would have done if it had had something in mind at the time of rendering the original judgment that in fact it did not have in mind a that time. There are authorities, on which the taxpayer relies in support of the order appealed from, which would seem to lend some support for the view that a court has power to change judgments when it discovers oversights. In my view, however, none of these authorities go so far as to hold that any court can completely change the substance of its judgment on the ground that it overlooked or did not know something when it rendered it. In addition, most of such decisions seem to be based on the ‘‘slip’’ rule or some other authority not vested in the Tax Appeal Board. In any event, to the extent that such authorities go beyond the bounds laid down in the Paper Machinery case, as I understand them, I am of the view that I should apply the law as stated in that case.

Before referring to the cases that I have in mind, I should say that, when some of the cases relied on by the taxpayer. are examined, it is found that the changes made in the judgments there under review were made to make the formal judgment express the judgment as actually delivered by the Court. See, for example, Hatton v. Harris, [1892] A.C. 547, where the decision was based on the principle stated by Lord Watson at p. 560, that “ ... it is always within the competency of the Court. . . to correct the record in order to bring it into harmony with the order which the judge obviously meant to pronounce”. An- other example is Milson v. Carter, [1893] A.C. 638, where Lord Hobhouse said at p. 640: ‘‘It is obvious that the omission to provide for the case of dismissal . . . must have been an accidental omission for which the registrar of the Supreme Court, or perhaps the respondent himself, is to blame. It is impossible to suppose that the Court could have intended to give the appellant an opportunity of shuffling out: of his just. liability by making default in the prosecution of his appeal.’’ See also Lawrie v. Lees (1881), 7 App. Cas. 19, per Lord Penzance at pp. 34-5, Kidd v. National Railway Association (1916), 37 O.L.R. 381, and Craig v. Sinclair (1944), 61 B.C.R. 253. A somewhat similar case carries this power of the Court a little further. In Thynne v. Thynne, [1955] P. 272, it was held that the Court could correct a divorce decree after it became absolute to make it recite the marriage ceremony which created the state of marriage that was dissolved by the decree instead of a subsequent ceremony that was the only one of which the Court had been informed before the divorce decree was pronounced. This would seem to go somewhat further than the bounds established in the Paper Machinery ease, supra, but does not go any further than making changes necessary to make the judgment reflect what the Court really intended to do. See per Singleton, L.J. at p. 301: ‘‘It is important to bear in mind that the commissioner intended to dissolve a lawful marriage, to put an end to the status of married persons which up to that time existed between the wife and the husband : . . . ” These cases can have no application here where it is clear that the Board did not have in mind, when it delivered its original judgment, the quite different judgment substituted by the later order.

There are, however, other cases where a court has, subsequent to delivering a judgment or making an order, either amended it so as to change its substantive effect, or made a further order, by reason of having something brought to its attention that it had overlooked or had not known about. The following are the examples of such cases that have come to my attention :

1. Fritz v. Hobson (1880), 14 Ch.D. 542—where, after judgment at the end of the trial of an action, an application was made for costs. of a motion for an interlocutory injunction that had been adjourned to the trial and the trial judge held that he could still award costs of that motion (even though they would ordinarily have been dealt with in the judgment disposing of the action if counsel had not overlooked applying for them) either by reason of an implied liberty to apply reserved in the original order on the motion or an express liberty to apply in the judgment itself or by reason of the “slip” rule.

2. Barker v. Purvis (1886), 56 L.T. 131—where the judgment at the trial of an action ordered a payment to be made by the defendant to the plaintiff but directed that he should be at liberty to set off a sum of £4538 on account of interest which he had paid on behalf of the plaintiff, the amount of £453 having been fixed on the faith of a statement of the defendant and being in fact in excess of the right amount, and it was held that the judgment could be corrected under the ‘‘slip’’ rule, the mistake having been caused by an ‘‘accidental slip’’.

3. Hardy v. Pickard (1888), 12 Ont. P.R .428—where Rose, J. had overlooked expressing an award of costs for the successful party when he delivered judgment and, being satisfied that he had not decided to deprive the successful party of costs, held that he had authority under the ‘‘slip’’ rule to add the order as to costs ‘‘ ‘ whether the omission was in not considering the question, or in not making a record of my judgment’’.

4. Chessum & Sons v. Gordon, [1901] 1 Q.B. 694—where it was held that, under the ‘‘slip’’ rule, the Court could order that a disbursement that a successful party had omitted to claim on taxation of costs be referred to the taxing master for taxation and that his certificate might be amended.

5. Prevost v. Bedard (1915), 51 S.C.R. 629—where the Supreme Court of Canada ordered that its judgment dismissing an appeal be varied by inserting a direction that the judgment appealed from and the plaintiff’s declaration be varied to correct the inadequate description of certain lands and Anglin, J. said, at p. 635 :

Of course this jurisdiction is distinct from the inherent power which the court possesses to correct its formal judgment when it finds that as drawn up it does not correctly state what the court actually directed and intended. There can be no doubt that the omission to provide in the judgment for the amendment was due to an accidental slip or oversight. Had the request and necessity for it been present to the minds of the judges when delivering judgment it would certainly have been directed. In delivering its judgment dismissing the appeal, the purpose of the court clearly was that the respondent should have an effective judgment for the relief which he sought. That intention might be defeated if the court were powerless to grant the amendment now asked.

6. McCaughey v. Stringer, [1914] 1 I.R. Ch. D. 73—where it was held that, following the Fritz case and the Chessum ease, an order could be varied to increase the amount payable be- cause the plaintiff, in applying for the order had, by mistake, allowed the defendant a credit greater than he was entitled to.

7. Re City Housing Trust Ltd., [1942] 1 All E.R. 369—where it was held that, the Master having ordered the plaintiff’s costs in a debenture action to be paid out of the fund in court, an order could subsequently be made that the trustee’s remuneration be paid out in priority of the plaintiff’s costs.* [9]

8. Re Inchcape, [1942] 2 All E.R. 157—where Morton, J. held that he could order costs to be paid out of an estate even though they had not been drawn to his attention when he rendered a judgment in the matter by which he ordered that other costs be paid out of the estate.

In so far as these cases are cases where the Court found that it still had jurisdiction to do something in addition to what was done by its original order or judgment, they cannot supply any support for the order of the Tax Appeal Board that is under appeal because what it does is to substitute a completely different judgment for the one previously delivered. In so far as they are based on the ‘‘slip’’ rule, they have no application, not only because there is no ‘‘slip’’ rule applicable to the decisions of the Board, but also because the “slip” rule, while it may well have been properly applied in the cases to which I have referred, cannot, properly considered, authorize what the Board did in this case. The ‘‘slip’’ rule was authoritatively construed in Oxley v. Link, [1914] 2 K.B. 734, per Vaughan Williams, L.J. at pp. 737 et seq., where he said :

. . . the same objection which arises in respect of the words “clerical mistakes in judgments or orders” in my opinion arises in respect of the words “errors arising therein from any accidental slip or omission”. What is “therein”? That is in the judgment. It is exactly the same thing. “Clerical mistakes in judgments” only covers the same area, neither greater nor smaller, as you get from the words “errors arising therein from any accidental slip or omission”—that is in judgments or orders. Under those circumstances, I come to the conclusion that this slip rule does not apply in the present case. The real fact of the matter is that what is asked for here by the judgment creditors, if I may call them such, is this, not that there may be a correction in the judgment or order, but that they may substitute for the judgment or order which has been made something which is a wholly different judgment. I heard Mr. Sankey say this morning that all that was wished to be done here was to add an omitted clause; but it is not so. The proposal is to substitute one form of judgment or order for another. He has no desire, as I understand it, to make any correction at all.

and by Buckley, L.J.:at pp. 741 et seq., where he said:

The words relied upon are: “errors arising therein,’ that is to say, in a judgment—errors arising in a judgment “from any accidental slip or omission may at any time be corrected by the Court or a judge on motion or summons without an appeal.” To my mind an error in something means that the thing of which you are speaking contains parts which are right and parts which are wrong, and that you are going to alter so much of it as is wrong. It is not correcting an error in a thing which is wrong from beginning to end to substitute for it something which is right. In order to see if this Order applies I have to see whether this judgment contains something which is right and which I am to correct by adding something, if it be a mistake which arises from omission, or by correcting something, if it be something which requires modification or correction of some sort. So that to see whether the Order applies or not, it is vital in the first instance to see whether this is a document parts of which are right and parts of which are wrong. If I am right in what I have said already, there is no part of it which is right; it is wrong altogether. For that reason it seems to me that the slip rule does not apply.

I am satisfied, from my examination of the authorities, that the ‘‘slip” rule, even if it were applicable, would not have authorized the Board to do what it did here, namely, substitute for the judgment originally delivered a completely different Judgment that it had no intention of delivering when it rendered its original judgment.

The appeal will therefore be allowed with costs and the assessments that are the subject matter of the Board’s judgment will be restored.