The moving party (“QPG”) sought an order pursuant to Rule 109 of the Federal Courts Rules permitting it to intervene in this appeal by the Crown of the DAC decision, which found that there was no GAAR abuse in the taxpayer (DAC) avoiding the s. 123.3 refundable tax and accessing the s. 123.4 general rate reduction through continuing to the British Virgin Islands, thereby ceasing to be a Canadian-controlled private corporation (CCPC).
Stratas JA noted that Rule 109 required that “the proposed intervener’s submissions … must be useful to ‘the determination of a factual or legal issue related to the proceeding’” (para. 6), that “[t]he originating document before the Court ... defines the factual and legal issues in the proceeding” (para. 8) and that “[f]or this reason, interveners have to take the issues as they find them and cannot raise new issues” (para. 9). He further referred to Rule 3 (indicating inter alia “that the Federal Courts Rules, such as Rule 109 on intervention, will be ‘interpreted and applied’ so as ‘to secure the just, most expeditious and least expensive outcome of every proceeding’ (para. 18)”) and indicated (at para. 19) that “[f]or example, those who apply late to intervene, with potential disruption to the orderly progress of a proceeding, are unlikely to be allowed into the proceedings”.
Here, the parties had not put in issue the Minister’s designation of DAC as a CCPC in its notice of reassessment (presumably a designation pursuant to s. 89(1) – public corporation – (c)(ii)), whereas QPG wished to intervene on the issue of whether such a designation overrode the legislative criteria imposed by the Act for determining CCPC status. To set up this issue, QPQ relied on its own notice of reassessment.
Before dismissing the motion to intervene, Stratas JA stated (at paras. 25-27):
The issue raised by QPQ … seeks to reinvent the theory of the case. The new issue does not assist the Court’s determination of the “essential character” and “real essence” of the issues in this appeal. It appears to be introducing new evidence.
This is a classic case of a proposed intervention that, if allowed, will commandeer the parties’ case.
As well, this proposed intervention is too late and, thus, is against the objectives of Rule 3.