The taxpayer (a large corporation) objected on the basis that stock option surrender payments were fully deductible under s. 9, whereas its notices of appeal also advanced deductibility under ss. 20(1)(e), 20(1)(b), and 111(5.2) in the alternative.
After observing (at para. 11) that "if the proposed additional argument would result in the large corporation seeking completely different relief than was previously sought, the courts are more likely to consider the argument to be a new issue rather than a reason," Graham J found (respecting ss. 165(1.11)(a) and 169(2.1)(a)) that the taxpayer's s. 20(1)(e) argument was were merely a change in reasons, not in the issues (i.e. deductibility). However, the taxpayer's ss. 20(1)(b) and 111(5.2) arguments raised a new issue given that a s. 111(5.2) deduction would be in respect of the taxpayer's full cumulative eligible capital balance rather than only the surrender payments at issue here.
Respecting the requirement in s. 165(1.11)(b) to specify relief, that requested under s. 20(1)(e) for the particular years was less than that sought under s. 9(1). Graham J found (at para. 23) that "if a certain amount of relief is specified in a Notice of Objection, a less favourable amount of relief is automatically included," noting (at para. 24) that "if a large corporation's appeal involves numerous small expenses…it would be unreasonable to expect the large corporation to express its relief sought… on an expense-by-expense basis."
Graham J identified a gap in the legislation where the Minister confirms assessments of a large corporation, but on an entirely different basis than in the original assessment. He stated that it may be appropriate to allow the taxpayer to appeal in such a situation, but that issue did not arise here where the Minister was maintaining the original basis of assessment and was merely adding additional explanations regarding ss. 20(1)(b) and 111(5.2).