Shore J. found that he should apply a decision of the Federal Court of Appeal on the meaning of "taxation year" in s. 127(5) even though that section had since been repealed, and then stated (at para. 35):
The Applicant argues that subsection 220(3.1) of the ITA is ambiguous and therefore, it should use the residual presumption in favour of the taxpayer to construe it in favour of the taxpayer. While the residual presumption is a tool at the Court's disposal, the Court takes note of the ruling in Notre-Dame de Bons-Secours [[1994] 3 S.C.R. 3, 50 A.C.W.S. (3d) 541] where the Supreme Court held that the residual presumption is exceptional and should only be used when a court must choose between two valid interpretations. The Supreme Court also cited the case of Symes, [[1993] 4 S.C.R. 695], and held that "[o]nly a reasonable doubt, not resolved by the ordinary rules of interpretation, will be settled by recourse to the residual presumption in favour of the taxpayer" (Notre-Dame de Bon Secours at p. 20).
The Court of Appeal accepted the taxpayer's submission (at para. 12) that subsection 220(3.1) "permits the Minister to exercise his discretion to cancel interest accrued in any taxation year ending within ten years before the taxpayer's application for relief, regardless of when the underlying tax debt arose." Stratas J.A. noted (at para. 18) that, taken in isolation, "interest... payable... in respect of a taxation year" was ambiguous. Furthermore, the interpretation at trial was (para. 36) "contrary to the purpose of subsection 220(3.1): to allow taxpayers to ask for relief against penalties and interest and to allow the Minister to grant such relief where, in his view of the overall fairness of the situation, it is appropriate to do so."