Chevron Canada Resources Ltd. v. M.N.R.
T-2268-98
Teitelbaum J.
15/9/99
20 pp.
Judicial review of Minister's failure to reassess 1985, 1986 taxation years in accordance with terms of memorandum of understanding(MOU)-Applicant signing two waivers in respect of normal time period for reassessment of 1985, 1986 taxation years-Reassessed for those years-Objecting to reassessments-Main issue manner of calculation of resource profits, resource allowance (resource allowance issue)-Reassessments confirmed-Applicant appealed to Tax Court of Canada-Parties reaching settlement-Tax Court judgment allowing appeal, referring assessments back to Minister for reconsideration in accordance with consent to judgment-Just prior to consent to judgment being filed in Tax Court action, Federal Court of Appeal issuing judgment in Gulf Canada Ltd. v. Canada (1992), 92 DTC 6123 (F.C.A.) dealing with resource allowance issue-Subsequent to Gulf Canada and prior to filing of minutes of settlement, consent to judgment herein, Canadian Association of Petroleum Producers (CAPP) and Revenue Canada commencing negotiations to resolve resource allowance issue-Applicant never doing anything to ensure calculation of resource allowance issue would be changed in accordance with Gulf Canada case, negotiations between CAPP, Revenue Canada-Those negotiations resulted in MOU-Applicant reassessed February 14, 1995 to give effect to Tax Court judgment-Filing notices of objection on basis respondent failed to comply with terms of MOU to allow applicant adjustment in calculation of resource allowance-Tax Court holding applicant having legal right to file notice of objection-On appeal, F.C.A. holding applicant not entitled to file notices of objection to February 1995 reassessments-Application dismissed-Waivers never revoked-Filed within prescribed time limit, clearly dealt with computation of resource profits, resource allowance thereby giving Minister right to reassess as often as necessary regarding these matters-While waivers unlimited, enable Minister to reassess as often as required, not obliged by waivers to reassess-Although Minister having authority to act on waiver, under no duty, particularly after several reassessments already issued-MOU nothing more than agreement in principle-Neither forming part of law nor binding either party to agreement i.e. not binding any member of CAPP-In case at bar applicant seeking to raise same matters raised in February 1995 notice of objection-These very matters raised in litigation before Tax Court of Canada, subject of consent judgment, res judicata-Income Tax Act, s. 165(1.1) precluding applicant from filing notices of objection relating to matters previously resolved, in this case by consent judgment-S. 165(1.1) enacted with intention of limiting right of reassessment of matters forming subject of judgment by Court-Serving as reinforcement on rule of res judicata in context of appeals against amount of assessment-Other than seeking leave to appeal to S.C.C., all appeals exhausted-Income Tax Act providing for full appeal procedure which is only source of remedy available to applicant-Applicant availed itself of procedure in obtaining consent judgment-Now seeking mandamus to allow to file it further notices of objection-F.C.A. found s. 165(1.1) precluded this-Central question amount of tax assessed in 1985, 1986-Formed basis of consent judgment as well as decision of F.C.A.-To allow application to proceed would be to reconsider issues agreed upon in consent judgment-Income Tax Act, R.S.C., 1985 (5th Supp.), c. 1, s. 165(1.1) (as enacted by S.C. 1994, c. 7, Sch. II, s. 138; as am. idem, Sch. VIII, s. 98).