A couple of recent cases in the Federal Court of Appeal (“FCA”), which saw the taxpayer and importer, respectively, attempting to appeal earlier Court decisions, have emphasized that tax and trade litigation is a “one-shot deal”, where taxpayers (and importers on the trade side) are required to put their best foot forward in the lower Courts, and will be unlikely to get a second chance at making arguments before the FCA (or the lower Courts) if they do not do so.

Doostyar v. Canada

Doostyar v. Canada was a tax case, appealed to the FCA, in which the taxpayer’s position was that the Tax Court of Canada (“TCC”) erred by not accepting its additional submissions, post hearing.

The troubles began when, after the full hearing, the TCC sent a draft version of is Reasons to the parties for feedback on typographical and grammatical issues. Seeing that it was about to lose, the taxpayer asked to make further submissions, which the TCC refused.

The FCA was unconvinced of any error by the TCC and dismissed the appeal, finding the taxpayer had ample opportunity to make all proper submissions and adduce all proper evidence before the TCC to begin with – albeit AT the hearing.  Not after the hearing.

Charoen Pokphand Foods v. CBSA

In Charoen, a similar trade case before the FCA involving an appeal from the Canadian International Trade Tribunal (“CITT”) – on which we blogged more substantively here – the importer was also advised that it ought to have made all its arguments before the CITT, and not attempt new arguments at the FCA.

In that case, the issue was the tariff classification of frozen wonton soup, which the CITT ultimately concluded was “pasta”, not “soup” – although we are simplifying.  On appeal the importer effectively asked the FCA to reassess the evidence before the CITT, which the FCA declined to do, stating “this is not our role”, while also declining to reverse the CITT’s legal analysis. 

The FCA also took pains to point out that an appeal before it is NOT another chance to request a reassessment of evidence, or present new arguments/analysis.

Takeaways

In both Doostyar and Charoen the FCA confirms that lower courts like the TCC and CITT will have wide latitude in their decision-making process and, crucially, that any all evidence, legal analysis and arguments ought to be put squarely before those courts at the initial (and only true) hearing of the matter.

This means that when it comes to Canadian tax and trade litigation, litigants are required to make their best arguments in their Notices of Appeal and at judicial hearings.  Requests for second chances are usually rejected at the Appellate level! 

Putting one’s best foot forward is therefore REQUIRED and experienced Counsel is usually required.

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