The Federal Court of Appeal has allowed the taxpayer's motion to amend its Notice of Appeal to add a new ground of appeal and to file a Supplementary Memorandum of Fact and Law.
(See our previous posts on the McKesson transfer pricing appeal here and here.)
The Court of Appeal stated that the lower court's recusal reasons "depart from the norm", and were a "new, material development " in the appeal and "have become part of the real issues at stake". The Court stated that it was neither clear cut nor obvious that the new ground raised by the taxpayer would fail. Further, there were no reasons to refuse the entry of the new ground into the appeal.
The Court of Appeal also ordered that a Supplementary Appeal Book be filed, which shall contain the Tax Court's recusal reasons and the Court of Appeal's Order on the motion.
Finally, the Court of Appeal allowed the taxpayer to file a Supplementary Memorandum of Fact and Law, and the Crown to file a responding memorandum. Interestingly, the Court of Appeal limited the length of the memorandum to no more than 20 pages. The Court of Appeal stated,
[22] In the circumstances, 20 pages is generous. Parties normally make all of their written submissions for all grounds of appeal in less than the 30 page limit in Rule 70. And many of those appeals are more complex than this one. However, in this case, the new ground is somewhat novel and the circumstances are somewhat unusual, so I am prepared to grant the appellant some leeway.
[23] The difference between what the appellants propose in page length and what I am willing to grant is nine pages. Some might wonder, "What's the big deal about nine pages?"
[24] Unnecessarily lengthy, diffuse submissions are like an unpacked, fluffy snowball. Throw it, and the target hardly feels it. On the other hand, short, highly focused submissions are like a snowball packed tightly into an iceball. Throw it, and the target really feels it. Shorter written submissions are better advocacy and, thus, are much more helpful to the Court.
[25] Structures that lead to repetition, over-elaboration of arguments, block quotations, and rhetorical flourishes make submissions diffuse. Simple but strategic structures, arguments presented only once and compactly, tight writing that arranges clinical details in a persuasive way, and short snippets from authorities only where necessary make submissions highly focused. The former dissipates the force of the argument; the latter concentrates it.
[26] If the parties can make their submissions on the new ground in fewer than 20 pages, so much the better.
* * *
No date has been set for the hearing of the full appeal.
For more information, visit our Canadian Tax Litigation blog at www.canadiantaxlitigation.com
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