A group settlement reached in respect of the appeals of a large group of taxpayers including the taxpayer allowed a deduction of losses in a specified amount for their 1995 and 1996 taxation year, allowed interest expense claims for various periods and allowed “any consequential claims by [the taxpayers] for the carryforward or carryback of any losses resulting from the reassessments set forth above.” Without further communication with the taxpayer, the Minister carried back the resulting non-capital loss of the taxpayer to his 1992 and 1993 taxation years. The taxpayer objected on the basis that this carryback was done without giving him a choice as to the application of the loss, and that he wanted the loss applied to years under appeal, i.e., 1997 and 1998.
In allowing the taxpayer’s appeal, Wong J noted (at para. 18) that “the starting point is that it is the taxpayer’s choice as to the application of available non-capital losses” and found that there was nothing in the wording of the settlement that took away this right of direction of the taxpayer.