The taxpayers, after donating art pieces and claiming charitable donations based on higher values than their purchase prices, were reassessed in 2002 and 2003 on the basis that the gift amounts were their cost, and for gross negligence penalties. They filed notices of objection, which the Minister held in abeyance pending the outcome of similar cases.
In 2012, the Minister reassessed them to vacate the penalties and the taxable capital gains that the taxpayers reported on the art pieces. The taxpayers argued that the 2012 reassessments should be vacated because the Minister had failed to act with due dispatch.
Webb JA dismissed the taxpayer's appeal. The Minister's obligation under s. 165(3) to consider a notice of objection "with all due dispatch" is not a basis for vacating the underlying assessment (Bolton). After noting that vacating the 2012 assessments would have the effect of reinstating the 2002 and 2003 assessments, which were for much higher amounts, he further noted (para. 17):
If, however, the result of vacating a reassessment would be that a person's tax liability would be increased (because the previous assessment was for a greater amount), the Tax Court of Canada could not grant that remedy in any event (Anonby v. The Queen, 2013 TCC 184; 2013 DTC 1154).