ParizConsulting Group

2026-10-22

Fiducie Familiale Marc Leclerc, 2026 TCC 178: a section 160 notice of appeal struck for pleading CRA delay instead of facts

2026 TCC 178 · Tax Court of Canada

Provisions

ITA s. 160ITA s. 152ITA s. 220ITA s. 171

Text

Author: Sas Tullo

This is a procedural order in a Tax Court appeal by a family trust assessed under section 160 of the Income Tax Act for property allegedly received from a tax debtor. On the Crown’s motion, Lafleur J. found that the amended notice of appeal set out no material facts and that most of its substantive paragraphs complained of CRA delay and the size of the interest, matters the Tax Court cannot rule on. She struck the pleading but, because the appeal was not hopeless, gave the trust thirty days to file a proper one. The reasons, in French only, collect the governing principles on pleadings and jurisdiction in one place.

Facts

The Minister assessed the trust under section 160 by a notice dated April 16, 2024, on the footing that Marc Leclerc had transferred property to it, a non-arm’s length person, for no consideration while he was a tax debtor (paras 3-4). The trust appealed on February 12, 2026; on May 28, 2026, the Court moved the appeal to the general procedure and directed a notice of appeal in Form 21(1)(a), and the amended notice filed on June 30, 2026, was the subject of the motion (paras 5-7).

The Crown argued that the pleading contained no material fact and was not an originating document under subsection 17.2(1) of the Tax Court of Canada Act, and alternatively that paragraphs 14 to 17 and 21 to 23, on the Minister’s conduct, should be struck under section 53 of the Rules (paras 8-10). The trust answered that the defects were curable under section 7, that it could contest the underlying assessments against Mr. Leclerc under Gaucher v. Canada, 2000 CanLII 16513 (FCA), and Canada v. 594710 British Columbia Ltd., 2018 FCA 166, and that the delay allegations mattered because the interest claimed, $63,342.27, dwarfed the tax of $13,486.77 (paras 11-19).

Issues

The Court had to decide whether the pleading complied with the Act and the Rules, whether the paragraphs on the Minister’s conduct should be struck, and whether to quash the appeal or require a new pleading (paras 1, 57).

Holding

The Crown’s motion was allowed in part. Paragraphs 14, 15, 16, 21, 22, and 23 were struck; given the very significant deficiencies, the amended notice of appeal was struck in its entirety; the trust was ordered to file a new notice of appeal in Form 21(1)(a) within thirty days, containing none of the struck allegations; and lump-sum costs of $500 were awarded to the Crown in any event of the cause (para 2). Paragraph 17, on the computation of interest, was not struck (para 71).

The court’s reasoning

Lafleur J. began with jurisdiction. Section 171 of the Act allows the Court only to dismiss an appeal or to allow it and vacate, vary, or refer back the assessment (paras 20-21), so its task is limited to the validity and correctness of the assessment; the Minister’s conduct, even if wrongful, is not a ground for vacating one (para 22), citing Canada (National Revenue) v. JP Morgan Asset Management (Canada) Inc., 2013 FCA 250, at paragraph 83, Ereiser v. Canada, 2013 FCA 20, at paragraph 31, and Iris Technologies Inc. v. Canada (Attorney General), 2024 SCC 24, at paragraph 41 (paras 23-25).

On form, subsection 17.2(1) of the Tax Court of Canada Act and sections 21 and 48 of the Rules require Form 21(1)(a), which must state the material facts, issues, provisions, grounds, and relief (paras 26-29); this is not a formality, because it defines the issues for discovery and trial, citing Kondur v. The Queen, 2015 TCC 318, at paragraph 19 (para 30). Under Zelinski v. The Queen, 2001 CanLII 406 (TCC), approved in Beima v. Canada, 2016 FCA 205, at paragraph 17, pleadings must state material facts, not conclusions of law or evidence, and concisely (paras 31-33).

On striking, section 53 of the Rules permits the Court to strike a pleading that may prejudice a fair hearing, is scandalous, frivolous, or vexatious, is an abuse, or discloses no reasonable ground of appeal (para 34). The test from R. v. Imperial Tobacco Canada Ltd., 2011 SCC 42, at paragraph 21, is whether, assuming the facts pleaded to be true, it is plain and obvious that the appeal cannot succeed (paras 35-39). A pleading is frivolous where the claim lies outside the Court’s jurisdiction, citing Canada v. Roitman, 2006 FCA 266, at paragraph 15 (para 48). Under section 7, non-compliance is an irregularity; where the deficiencies are serious, the proper course is to set the pleading aside and permit a new one (paras 50-52).

Applying those principles, the judge found that the pleading raised three grounds, that the underlying debt was “prescribed, extinguished or otherwise unrecoverable” (translation), that the interest was miscalculated, and that the underlying assessments were contested, but pleaded no material fact in support of any of them or on the conditions of section 160 (paras 58-60). It cited no statutory provision; the trust’s reliance on subparagraph 152(4)(a)(i) appeared only in its written submissions (paras 61-62). The Crown could not plead a reply to it (para 64).

Paragraphs 14 to 16 and 21 to 23 alleged that the Minister’s negligence in waiting until 2024 to assess a transfer dating from 2002 had generated disproportionate interest, so that the assessment should be vacated or the interest cancelled (para 65). The Minister’s fault is irrelevant to the validity of an assessment (para 68), and the power to waive or cancel interest belongs to the Minister under subsection 220(3.1), reviewable only by the Federal Court under sections 18 and 18.1 of the Federal Courts Act, citing JP Morgan at paragraph 90 (para 69). The paragraphs were struck as frivolous or abusive, “since the Court has no jurisdiction to vacate an assessment in cases of fault by the Minister, or to vacate or reduce interest” (translation) (para 70).

The pleading was nonetheless not futile, so the appeal could not be quashed (paras 73-75). Given the very serious deficiencies, the judge ordered a fresh notice of appeal, pleading the facts, issues, provisions, grounds, and relief, and seeking nothing outside the Court’s jurisdiction (paras 76-78).

According to the consolidated text on the Justice Laws website, section 160 and subsection 220(3.1) have each been amended since the April 2024 assessment, most recently in 2026.

Practical implications

The decision breaks no new ground; it applies established authority to a pleading that read more like a complaint letter than an originating document. Three lessons follow for practitioners defending section 160 assessments.

First, a section 160 appeal must plead facts going to the statutory conditions and to any challenge to the underlying assessment. Gaucher gives the transferee standing to attack the transferor’s assessment, but standing is not a substitute for material facts.

Second, in my view the most useful passage is paragraph 69. Complaints that the CRA waited too long and let the interest run are common in section 160 cases, where the transfer can be decades old. They belong in a taxpayer relief request under subsection 220(3.1) and, if refused, in a judicial review in the Federal Court, not in a Tax Court pleading. An allegation that the interest was miscalculated is different, and survived here.

Third, the Court was reluctant to end an appeal on a pleading defect: the trust lost its pleading and $500 in costs but kept its appeal, with a timetable due by February 5, 2027. Whether any appeal was taken is not verified here.

For a reader without legal training, a notice of appeal is not the place to tell the story of how the CRA treated you. It must say what happened, which provision is in play, and why the assessment is wrong. Grievances about delay and interest have their own route.

This comment is general information, not legal advice. The law may have changed since the decision; check the current text in the tax wiki.

Fiducie Familiale Marc Leclerc c. Le Roi, 2026 CCI 178 (English neutral citation 2026 TCC 178). Order and reasons dated October 15, 2026, decided on written submissions filed July 28 and August 28, 2026. Lafleur J. Docket 2026-551(IT)G. Reasons on the Tax Court’s site (French only). Also on CanLII. This is an interlocutory order in a first-instance appeal; there is no decision under appeal.