(in replacement of Canada v. Cameco Corporation, 2020 FCA 112)
The reasons and judgment of the Tax Court of Canada in Agracity Ltd. v. The Queen, 2020 TCC 91 are appealed to the Bowman Moot Court for Tax Appeals.
The questions in issue on appeal are:
- (a) To ground an allegation of sham, must there always be an element of deceit?
b) Assuming an element of deceit is required, what, if any, is the required level of deception?
(c) Did the transactions entered into by AgraCity Ltd. and NewAgco Inc. amount to a sham?
- (a) Do paragraphs 247(2)(a) and (c) of the Income Tax Act, RSC 1985, c 1 (5th Supp) (the “Act”) apply to re-determine the terms and conditions of the transactions at issue?
(b) Do paragraphs 247(2)(b) and (d) of the Act apply to re-characterize the transactions at issue?
All other issues raised before the Tax Court of Canada are not appealed from.
The Moot is intended to promote advocacy pertaining to substantive tax law issues, not to questions relating to administrative law or the standard of review. Participants are expected to make very short written submissions and refer the judges to their factum when they state orally the applicable standard of review. We have done our best to inform the judges that the standard of review is not at issue and have advised them to refrain from asking any questions pertaining to it.
The moot problem is an actual case, and therefore the parties’ factums are to be original works, as opposed to any copy or mere imitation of existing filed court materials.
Moot Problem Clarifications
- Are the participants allowed to argue/address the facts established by the TCC trial court judge? That is, are the participants allowed to argue for a “palpable and overriding error of fact”?
While the applicable standard of review is not at issue, Participants may refer to the facts established by the trial court judge of the Tax Court and the conclusions reached and make arguments as to why the decision of the Tax Court is correct or not. However, Participants’ arguments should be focused on addressing the issues set out in the Moot Problem.
- Question 1(c) asks if the transactions entered into by AgraCity Ltd. and NewAgco Inc. amount to a sham. We think it is a safe assumption that “NewAgco Inc.” is referencing the Barbados corporation, not the US corporation of the same name involved in the 2005 transactions. We still thought we should confirm.
We confirm this assumption is correct.
- We would like to know whether mooters are expected to address questions with respect to:
- The burden of proof rules in taxation litigation cases, discussed by the court in AgraCity (2020 TCC 91), paragraphs 100-105;
- Whether the appellants have complied with applicable federal laws and regulations, discussed in paragraph 78(ix).
- Participants are not expected to address questions related to the burden of proof in tax litigation cases, and we will endeavour to ensure the judges refrain from asking such questions.
- Participants are not expected to address questions related to this issue.