Foss v. The Queen

Citation: 2007TCC201

Date: 20070405

Docket: 2004-4789(IT)G

BETWEEN:

SHELDON FOSS,

Appellant,

and

HER MAJESTY THE QUEEN,

Respondent.

REASONS FOR ORDER

BowieJ.

[1] The motion before me brings into focus the issue to what extent, if any, the rules governing pleading in tax litigation differ from those that govern pleading in other civil litigation. The motion was brought in writing, and both parties have made submissions in writing, all according to the schedule contained in my Order of November 1, 2006. Neither party requested the opportunity to present argument orally, although my Order contemplated that. I consider this unfortunate, as neither party has fully addressed the applicable principles in their written submissions.

[2] The relief that the appellant seeks by this motion is threefold. First, he seeks to have almost all of paragraph 9 and all of paragraph 10 of the Reply to the Notice of Appeal struck out pursuant to Rule 53. Second, he seeks an Order pursuant to subsection 82(1) of the Rules, the effect of which would be to broaden discovery of documents from only those documents that assist the party producing to include all the documents that are relevant to the issues. Third, the appellant seeks copies of the documents that he says are referred to in paragraphs 9 y), 9 ff) and 9 kk) of the Reply. I shall deal first with the second of these items.

[3] Counsel for the respondent agrees in his written submission that this is an appropriate case in which to order that discovery of documents should be conducted under Rule 82. A perusal of the pleadings leads me to agree, and I shall so order.

[4] The other two objects of the motion are best considered in light of the specifics of paragraphs 9 and 10 of the respondent's 14-page Reply, so I shall reproduce those two paragraphs in their entirety.

9. In reassessing the appellant for the 2000 taxation year, the Minister relied on the following assumptions of fact - with the exception of the facts set out in paragraphs m, t, u, v, aa, cc, dd, ff, gg, hh, ii, kk, and ww which were not known to the Minister until after the reassessment was issued and which facts the Minister states are correct:

a) In his 2000 taxation year the appellant reported total income from all sources of $207,715.05;

b) In his 2000 taxation year the appellant claimed a deduction for a charitable donation of $100,000 to Global;

c) The appellant made the following claims for charitable donation tax credits in his income tax returns:

Tax Year	Total amount of charitable donations claimed
2003	- none -
2002	- none -
2001	$10.000.00 paid to Global Institute
2000	$100,000.00 paid to Global Institute
1999	- none -
1998	- none -
1997	- none -
1996	- none -
1995	- none -
1994	- none -
1993	- none -
1992	- none -
1991	- none -
1990	- none -
1989	- none -
1988	- none -
1987	- none -

Global Institute

d) On October 13, 1988, Global was incorporated under the Society Act of the Province of British Columbia;

e) Global filed an application to be registered as a charity with the Minister, on November 3, 1988;

f) in its application to be registered as a charity, Global indicated in the Statement of Activities that it would be engaged in improving agriculture, health, and poverty in third world countries;

g) Global was granted registered charity status under paragraph 149(1)(f) of the Income Tax Act on July 1, 1989;

h) in its 1995 and 1996 T3010 Registered Charity information and Public Information Returns, Global claimed:

· Its primary purpose was, "To facilitate and carry-on charitable activities which are beneficial to the community as a whole in Canada and the planet";

· The charitable programs carried on in Canada were "Community Support programs in B.C.";

· No programs were carried on outside Canada.

i) In its 1997 to 2003 T3010 Registered Charity Information and Public Information Returns, Global provided the following responses to the question, "What programs did the charity carry on during the fiscal period to accomplish its charitable purposes":

· 1997: "Community Support Programs in BC"

· 1998: Same as 1997

· 1999: Same as 1997

· 2000: "Community Support Programs in BC" and "Fund raising and assessment of projects in Canada and Third World countries for future programs"

· 2001: Same as 2000

· 2002: Same as 2000

· 2003: "Monitored ongoing programs and Managed Investments"

j) For the period 1996 to 2000, Global did not have any direct disbursements for charitable activities;

k) Global claims that Pranic Healing and Sound Treatment were its primary work through the 1990s;

l) Global claims to offer courses in:

· Pranic Healing;

· Pranic Psychotherapy;

· Clairvoyance;

· Psychic Self Defence; and

· Crystal Healing.

m) In its 1997 fiscal period Global disposed of the majority of its assets, including all computers and most of its other equipment;

n) In its application to be registered as a charity, Global identified Duncan S. Goheen (Delta, BC) (Consultant), Gary McDonald (Vancouver, BC) Real Estate Developer), and Peter Podovinikoff (Richmond, BC) Credit Union Manager) as directors;

o) In its application to be registered as a charity, Global identified Mr. Duncan Goheen as the Coordinator of the Charity;

p) Global has held out Mr. Duncan Goheen as its founder.

Mr. Duncan Goheen

q) Mr. Duncan Goheen, while serving as a director of Global also worked for and represented the Omnicorp Financial Group of Companies;

r) The Omnicorp Financial Group of Companies carried on their operations under the name of simply Omnicorp;

s) Starting in the fall of 2000 and continuing through to the fall of 2002, Global Institute presented its projects and programs at a number of Omnicorp "educational events".

t) in the fall of 2000 and continuing through the fall of 2002, Global shared Omnicorp's time slots at conferences organized by the Global Prosperity Group;

u) Global spent less than $1,000 on advertising and promotion activities from 1996 to 1998, and nothing at all in 1999 and 2000;

v) For the fiscal years 1996 to 1999, Global claimed its total donations for all four years were $6,620;

w) For its fiscal years 2000 to 2002, Global claimed a significant increase in donations, as follows:

· 2000 - a total of $992,080 in donations from 19 donors;

· 2001 - a total of $3,092,386 in donations from 36 donors;

· 2002 - a total of $741,274 in donations from 10 donors

x) Global claimed that 100% of the amounts given were in respect of an endowment fund and nothing was donated to support any of its current activities;

y) With the exception of two donations that were sent to Simeon Capital all of the above noted donations were first deposited in a Canadian bank to the credit of Global and then sent to an Omnicorp account at the National Commercial Bank, Kingston, St. Vincent and the Grenadines (Account #8597) in a series of thirty-three wire transfers made between November 23, 2000 and August 7, 2002;

z) For each wire transfer, Global faxed to Omnicorp a cover sheet disclosing the total amount of the wire and a breakdown of the name of the individual investors and the amounts that were included in the wire; Also faxed was a Client Statement Report disclosing the following information for each amount:

· Client Name (being the investor)

· Canadian Donation Amount

· US Equivalent

· Amount Wired

· Date Wired

· Access Code

aa) For each wire transfer, Omnicorp provided to Global a confirmation of the amount and date of funds received in the wire, and a notation stating: "Funds will be allocated as per the terms and conditions outlined in the completed agreements".

bb) A certificate of deposit for each wire transfer was subsequently provided to Global;

cc) Global received interest from the certificates of deposit of $137,630 in 2001 and $335,217 in 2002;

dd) Global paid management fees to Global Harmony Health Corp of $66,365 in 2001 and $50,480 in 2002;

ee) Global Harmony Health Corp. is wholly owned by Duncan Goheen's spouse Marilee Goheen;

Omnicorp Financial Group of Companies

ff) Omnicorp Bank Inc. was incorporated on March 21, 2000, under the St. Vincent and the Grenadines International Business Companies Act of 1996; It obtained its license to conduct banking and related business on May 31, 2000;

gg) Omnicorp Bank Inc. is owned by Nelson Bayford (50%) and Edward Rychkun (50%); The Bank's directors are Nelson Bayford (resident of St. Vincent) and Edward Rychkun; Nelson Bayford is the Chief Executive Officer of the Bank and acts as the President, overseeing the operations of the Bank;

hh) Omnicorp Bank Inc. was a bank only under the laws of St. Vincent, and did not have the capacity of an international bank, nor could it accept wire transfers;

ii) Omnicorp Bank Inc. conducted its own banking through the National Commerce Bank in St. Vincent.

jj) Omnicorp Bank Inc. is the primary entity in the Omnicorp Financial Group of companies, which consists of a number of companies associated largely because of common ownership by Nelson Bayford;

kk) Omnicorp Bank Inc. was offering certificates of deposit with a five-year or greater term bearing interest rates between 40%-50% per annum in 2000 and 30%-35% in 2003;

ll) Omnicorp Financial Group of companies promoted themselves as a "One-stop International Offshore Service Provider" and claimed to offer the services of Omnicorp Bank Inc. with respect to:

· Recovering capital from the oppressive jaws of taxation by developing and implementing tax-back strategies;

· Providing the knowledge and mechanisms necessary to deploy capital in jurisdictions that have no tax consequences;

· Setting up offshore Trusts, International Business Corporations and the structuring of indirect control of these entities;

· Strategies able to eliminate or reduce personal, corporate or capital taxes;

· Procedures that can eliminate current, previous or future tax liabilities;

· Liberation of registered funds without any tax consequences;

· Liberation of corporate retained earnings without tax consequences;

· Removal or movement of capital between countries without tax consequences;

· Asset protection and property transfers;

· Ownership through an offshore trust with discretionary beneficiaries purportedly eliminating offshore reporting requirements;

· Creation of IBC to invest offshore tax free; and

· Credit and debit cards to provide private and purportedly untraceable access, from anywhere in the world, to funds accumulated offshore;

mm) The Omnicorp Financial Group of Companies facilitated arrangements with Canadian taxpayers that included:

i) The RRSP Strip arrangement in which a taxpayer's RRSP funds were purportedly invested in shares of companies controlled by Omnicorp or Global Prosperity promoters. These funds were subsequently made available to the former RRSP annuitant in offshore accounts. In some cases the funds were invested with Omnicorp Bank Inc.

ii) The loss trading arrangements in which losses were fictitiously created to obtain tax refunds. The losses were funded by sham loans. The loan payments were placed in offshore accounts, and were made available to the taxpayers claiming the losses. In some cases these funds were invested with Omnicorp Bank Inc.

nn) The Omnicorp Financial Group of companies promoted and accommodated arrangements which were designed to mislead Canadian taxing authorities and misrepresent the true nature of those arrangements;

oo) Mr. Duncan Goheen attending the 2001 Global Prosperity Cancun Conference representing the Omnicorp Financial Group of companies at their booth, he promoted Omnicorp Investments, and he was a contact person for Omnicorp.

The Planned Arrangement

pp) The appellant entered into arrangements with Global and Omnicorp Bank Inc., with the intention that the following would occur:

· The initial investment made by transferring funds to Global;

· Global transferred the funds to Omnicorp for placement in a transitional account or an investment fund in the name of Global, which produces revenue of 35% or more annually;

· Global gets 10% paid to it yearly, the remaining 25% or more was to be paid to the appellant, either in the appellant's name, to the credit of an offshore international business corporation owned by the appellant, to another entity chosen by the appellant or via a debit or credit card furnished by Omnicorp Bank Inc.;

· The appellant was to be unable to access his invested funds during the initial five year period;

· After five years the amount of the original investments is transferred to Global, and the appellant would have access to the remainder.

qq) It was always the appellant's intent to pay the money, get an official charitable gift receipt, to claim a tax credit for a charitable donation, and between the tax refund expected and Omnicorp payments he would still receive the amount of his initial payment back with a profit;

The Actual Results of the Donation

rr) The appellant invested in the above scheme by giving Global a cheque dated December 18, 2000, in the amount of $100,000;

ss) Under the direction of Duncan Goheen, Global deposited the $100,000 into the bank account of Omnicorp Bank Inc. at the National Commerce Bank in St. Vincent;

tt) Global provided to Omnicorp Bank Inc. information that identified and traced the portion of the deposit relating to the appellant's specific payment;

uu) Omnicorp Bank Inc. was unable to meet its advertised rates of returns on investments and instead became insolvent;

vv) On or about September 23, 2002, Global and Omnicorp entered into 33 separate agreements, each of which provided that an Omnicorp certificate of deposit held by Global would be redeemed and the proceeds would be used to acquire shares in Solara Ventures Inc.;

ww) The 33 agreements were made pursuant to a proposal by Omnicorp Bank Inc. which it made in order to deal with the concerns of the Offshore Financial Authority regarding Omnicorp Bank Inc.'s solvency;

xx) Omnicorp Bank Inc.'s plan was to have all certificate of deposit holders exchange their certificates of deposit for an equivalent stated value of preferred shares of a Yukon corporation, Solara Ventures Inc. - at $19.50 USD/share - thereby decreasing the balance sheet of Omnicorp Bank Inc. to a nil asset/nil liability position and avoiding formal liquidation of Omnicorp Bank Inc.

yy) The 33 certificates of deposits' principal and accrued interest totaled:

Total Amount of certificates of Deposit $3,065,651.42 USD

Plus: Interest to September 30, 2002 39,105.06 USD

Total amount to purchase Solara Shares $3,104,756.48 USD

Solara Ventures Inc. shares

Purchased @ $19.50 USD/share 159,220

zz) On December 31, 2002, Global Institute entered into an agreement with 660673 B.C. Ltd. - a wholly owned subsidiary of Solara Ventures Inc - wherein Global sold its 159,220 Solara Ventures Inc. shares to 660673 B.C. Ltd. in exchange for a floating charge debenture in the principal amount of $3,104,759.48 with interest at 12% per annum, and the 159,220 Solara Ventures Inc. shares were security for this debenture;

aaa) On July 18, 2002, the appellant had acquired 20,000 shares of a Delaware corporation, Solara Ventures Inc., parent corporation to the Yukon corporation of the same name.

10. In assessing the appellant for penalties pursuant to subsection 163(2), the Minister relied on the following assumptions of fact:

a) The appellant's claim for a charitable donation deduction in his 2000 tax year is not consistent with his previous history of charitable giving;

b) The size, source, and frequency of the payment made to Global in 2000 is not consistent with Global's previous history of donations nor with general patterns of charitable giving;

c) The appellant's claimed knowledge of Global's activities is not consistent with the magnitude of the donation claimed.

d) The appellant's claimed understanding of the use of the $100,000 by Global is not consistent with the magnitude of the donation claimed.

e) The appellant was aware that he or someone upon whom he wished to confer a benefit, would receive a personal benefit by advancing the $100,000 to Global;

f) The appellant knew or ought to have known that he was making a false statement on his income tax return, by claiming a deduction in respect of the $100,000.

[5] On May 23, 2006, counsel for the appellant wrote to counsel for the respondent. The relevant parts of the letter read:

Pursuant to s. 80 of the General Procedure Rules, please provide me with copies of the following documents referred to in your Reply:

Document Paragraph of Reply

...

5. Wire transfers (33) 9 y)

...

8. Constating documents and licences - Omnicorp Bank Inc. 9 ff)

9. Certificates of deposit 9 kk)

...

I trust you understand that I am entitled to copies of documents specifically referred to in a pleading, and that I cannot file an Answer unless and until I receive those copies.

Counsel for the respondent replied by a letter dated November 10, 2006, furnishing copies of seven of the 11 documents requested in the letter of May 23. As to the three documents that this motion is concerned with he said:

5. The reference in subparagraph 9. y) is to an activity not a document.

...

8. There is no reference in subparagraph 9. ff) to the documents requested

9. There is no reference in subparagraph 9. kk) to documents

A wire transfer normally would be effected by means of an electronic document of which a paper record may exist. A license to conduct banking is generally evidenced by a document. Certificates of deposits are documentary evidence of transactions. It is disingenuous for counsel to say that these are not documents, although from the context in the pleading it may well be that the respondent does not have any of the documents, or copies of them. I will not make an Order that the party cannot comply with. However, I will order that if the respondent has any of the documents described in those paragraphs, or copies of them, within her possession, control or power then she is to deliver copies of them to counsel for the appellant within 20 days of receipt of my Order. Rule 80 requires no less.

[6] I turn now to the Appellant's attack on paragraphs 9 and 10 of the Reply. If it were not for Rule 8, I would strike out much of Paragraph 9, on the ground that it consists in large measure not of material facts, but of the evidence that the respondent says establishes the material facts. In Zelinski v. The Queen,[1] and again in Globtek v. The Queen,[2] I held that it is material facts that are to be pleaded, not evidence. Rule 49 reads, in part:

49(1) Subject to subsection (1.1), every reply shall state

...

(d) the findings or assumptions of fact made by the Minister when making the assessment,

(e) any other material fact,

...

49(1) Sous réserve du paragraphe (1.1), la réponse indique :

...

d) les conclusions ou les hypothèses de fait sur lesquelles le ministre s'est fondé en établissant sa cotisation;

e) tout autre fait pertinent;

...

The absence of the word "material" ('pertinent") from clause 49(1)(d) does not negate the rules of pleading that have been well-settled for many years. In Zelinski, I relied on the following passage from Holmsted and Watson:[3]

This is the rule of pleading: all of the other pleading rules are essentially corollaries or qualifications to this basic rule that the pleader must state the material facts relied upon for his or her claim or defence. The rule involves four separate elements: (1) every pleading must state facts, not mere conclusions of law; (2) it must state material facts and not include facts which are immaterial; (3) it must state facts and not the evidence by which they are to be proved; (4) it must state facts concisely in a summary form.

There is nothing novel in this rule. It has been part of the common law since the 16^th century,[4] and it has been applied a number of times recently by this Court: see Gee v. The Queen;[5] Terrio v. The Queen,[6] Kovinic v. The Queen,[7] Simser v. The Queen,[8] and Brown v. The Queen[9].

[7] I appreciate that in Gould v. The Queen,[10] Bowman C.J. declined to strike out several paragraphs of the Reply in a case similar to the present one. It appears that the paragraphs objected to in that case, although to some extent comprised of evidence rather than material facts, were not pleaded as assumptions underlying the assessments. Moreover the objection to the pleading appears to have been argued on the basis that the paragraphs attacked were irrelevant rather than immaterial. It is the absence of materiality in the assumptions pleaded that is prejudicial; relevance is a different matter altogether.

[8] The truism that the Crown is obliged to set forth in the Reply all the assumptions of fact that gave rise to the assessment, and that the taxpayer then has the onus of disproving those assumptions at trial, has its genesis in two much-cited decisions of the Supreme Court of Canada: Anderson Logging Company v. The King,[11] and Johnston v. M.N.R.[12] Over the course of some decades, counsel for the Crown in appeals from income tax assessments have developed the practice of pleading not only the material facts that justify the Minister's assessing action, but all the evidence that has led the Minister's assessor to formulate those assumptions in his mind, often accompanied by assumptions of law or of mixed fact and law. I need not repeat here the criticism that the Federal Court of Appeal has directed to this latter issue in Canada v. Anchor Pointe Energy Ltd.[13]

[9] The only obvious rationale for this approach to the drawing of pleadings is that the Minister (or more correctly her counsel) then takes the position at trial that every fact that is pleaded to have been assumed when assessing, whether material or simply evidentiary, and every conclusion of mixed fact and law included in the pleading as an assumption, becomes a fact established for purposes of the trial, unless the taxpayer is able to disprove it. This, in my view, is a gross distortion of what was decided by the Supreme Court in Anderson Logging and Johnston. The taxpayer is the party who has initiated the challenge to the status quo, which is the validity of the assessment, and so it is for him to "... demolish the basic fact on which the taxation rested."[14] To do this the taxpayer needs, and so is entitled to have pleaded, "... full [disclosure] of the precise findings of fact and conclusions of law which have given rise to the controversy [assessment]."[15] When Rand J. used the expression "precise findings of fact" he surely did not mean the whole gamut of evidence that led the assessor to his factual conclusions, but simply the material facts of the case, which is to say those facts that, if true, justify the Minister in making the assessment on her understanding of the law. The rationale for this is often said to be that it is the taxpayer who best knows his own affairs. This derives from the following passage from the judgment of Duff J., as he then was, in Anderson Logging at page 50:

First, as to the contention on the point of onus. If, on an appeal to the judge of the Court of Revision, it appears that, on the true facts, the application of the pertinent enactment is doubtful, it would, on principle, seem that the Crown must fail. That seems to be necessarily involved in the principle according to which statutes imposing a burden upon the subject have, by inveterate practice, been interpreted and administered. But, as concerns the inquiry into the facts, the appellant is in the same position as any other appellant. He must shew that the impeached assessment is an assessment which ought not to have been made; that is to say, he must establish facts upon which it can be affirmatively asserted that the assessment was not authorized by the taxing statute, or which bring the matter into such a state of doubt that, on the principles alluded to, the liability of the appellant must be negatived. The true facts may be established, of course, by direct evidence or by probable inference. The appellant may adduce facts constituting a prima facie case which remains unanswered; but in considering whether this has been done it is important not to forget, if it be so, that the facts are, in a special degree if not exclusively, within the appellant's cognizance; although this last is a consideration which, for obvious reasons, must not be pressed too far.

(Emphasis added)

The concluding words that I have italicized are often overlooked. There are cases, of course, where all the facts are (or should be) within the taxpayer's particular knowledge. An example is the case where it is simply the revenues and the expenses of a business that are in dispute. Anderson Logging itself was such a case - the issue being whether a sale of timber limits was effected by the taxpayer in the course of its business, or was the realization of an investment. So too was Johnston, where the only factual issue between the parties was whether the taxpayer supported his wife in the taxation year. It was simply as to those material facts that the judgments in those two cases placed the onus of proof on the taxpayers.

[10] The iniquity inherent in the practice of pleading vast swaths of evidence as assumptions of fact that underlie the assessment under appeal is that it purports to establish as true all the evidence pleaded that the taxpayer cannot disprove. It is this that Duff J. cautioned against in the concluding part of the passage from his judgment in Anderson Logging that I have quoted above. The present case is an outstanding example of one where the assumptions pleaded relate, to a very large extent, to matters which may very well be quite outside the appellant's knowledge. Certainly those subparagraphs between 9 d) and 9 zz) do not purport to connect the appellant to the facts set out there, or to the people or the organizations referred to there.

[11] The purpose of pleadings is to define the issues between the parties for the purposes of discovery, both documentary and testamentary, and trial. That requires no more than a statement of the "precise findings of fact" that underpin the assessment. It is potentially prejudicial to the appellant to plead more - certainly to plead more by way of assumptions of fact. The appellant is, of course, entitled to particulars of the evidence that the Crown intends to lead at trial, but these are properly obtained on discovery, not disguised as material facts as to which the Crown at trial may claim a presumption of truth. The appellant in the present case claims to be entitled to a tax credit under section 118.1 of the Income Tax Act (the Act) in respect of a gift to a registered charity. The facts material to such a claim are that:

(i) the appellant gave the money in question to the organization;

(ii) the organization was a charitable institution;

(iii) it was registered as such under the provisions of the Act;

(iv) the appellant received an appropriate receipt for the payment; and

(v) the appellant gave the money with donative intent.

From the admissions made in the pleadings, it appears that in the present case only the last of these is in issue. The task facing the appellant at trial, then, is simply to prove through convincing evidence that he made the payment with donative intent. It is not his task to disprove all the more than fifty other "assumptions" that are found pleaded in paragraph 9 of the Reply.

[12] In general procedure cases the appellant has the benefit of discovery through which he may obtain particulars of the evidence that the respondent may lead at trial to prove the material facts pleaded. I would not want what I have said above to be taken as necessarily governing the rules of pleading in informal cases, where there are no discoveries, and other considerations may apply.

[13] I find nothing offensive in paragraph 10 of the Reply. It does not suffer from the prolixity that characterizes paragraph 9. More important, it is directed to the reasons for the imposition by the Minister of a penalty on the appellant under subsection 163(2). By the terms of subsection 163(3), the Minister has the burden of proving the facts that justify the penalty. Paragraph 10 does no more than give particulars of those facts. It does not purport to cast on the appellant the burden of disproving the facts there alleged.

[14] Rule 8 reads as follows:

8 A motion to attack a proceeding or a step, document or direction in a proceeding for irregularity shall not be made,

(a) after the expiry of a reasonable time after the moving party knows or ought reasonably to have known of the irregularity, or

(b) if the moving party has taken any further step in the proceeding after obtaining knowledge of the irregularity,

except with leave of the Court.

8 La requête qui vise à contester, pour cause d'irrégularité, une instance ou une mesure prise, un document donné ou une directive rendue dans le cadre de celle-ci, ne peut être présentée, sauf avec l'autorisation de la Cour :

a) après l'expiration d'un délai raisonnable après que l'auteur de la requête a pris ou aurait raisonnablement dû prendre connaissance de l'irrégularité, ou

b) si l'auteur de la requête a pris une autre mesure dans le cadre de l'instance après avoir pris connaissance de l'irrégularité.

The Reply to the Notice of Appeal was delivered in March 2005. Since that time the Appellant has taken at least two fresh steps. One was a requirement under Rule 80 for the production of documents referred to in paragraph 9 of the Reply, more specifically in subparagraphs that the Appellant now moves to strike out. The respondent has produced several documents in response to that requirement. The other fresh step was a demand for particulars directed to subparagraphs that the appellant now seeks to have struck out. The appellant's written submissions in support of the motion do not advance any reason that I should give leave under Rule 8 following such a long delay and these two fresh steps, nor does any reason to do so occur to me. For that reason, the motion to strike out portions of the Reply will be dismissed. In the circumstances, neither party should have costs of the motion.

Signed at Ottawa, Canada, this 5th day of April, 2007.

"E.A. Bowie"

Bowie J.

[1] [2002] 1 C.T.C. 2422.

[2] 2006 TCC 16.

[3] Holmsted and Watson¸ Ontario Civil Procedure, Vol. 3, pages 25-20 to 25-21.

[4] Dowman's Case, (1586), 9 Co.Rep. 9b; 77 E.R. 735 @ 738.

[5] [2003] 4 C.T.C. 2737.

[6] 2006 TCC 494.

[7] 2006 TCC 496.

[8] 2003 DTC 617 @ 658-9.

[9] 2002 DTC 1385.

[10] 2005 TCC 556.

[11] [1925] S.C.R. 45.

[12] [1948] S.C.R. 486.

[13] 2003 FCA 294; 2003 DTC 5512.

[14] Supra, n. 12, per Rand J. at p. 489.

[15] Ibid., p. 490.