Angle v. MNR (1974), 2 N.R. 397 (SCC)

MLB headnote and full text

Angle v. Minister of National Revenue

Indexed As: Angle v. Minister of National Revenue

Supreme Court of Canada

Martland, Judson, Spence, Laskin and Dickson, JJ.

May 27, 1974.


This case arose out of an application by a taxpayer to set aside a writ of extent in the third degree which was issued against the taxpayer on an ex parte application by the Crown. The Crown alleged that a company owed income tax to the Crown in excess of $100,000. and that a company controlled by the taxpayer was indebted to the first company. In turn, the Crown alleged that the taxpayer was indebted to the company controlled by the taxpayer. The taxpayer alleged that the purported debt owing to the company controlled by the taxpayer could not support the writ of extent because the taxpayer had been assessed for benefits which gave rise to the debt – the assessment was affirmed after trial by the Exchequer Court. An application to the Exchequer Court to set aside the writ of extent against the taxpayer was dismissed.

On appeal to the Supreme Court of Canada the appeal was dismissed and the judgment of the Exchequer Court respecting the validity of the writ of extent was affirmed. The Supreme Court of Canada held that the Crown was not estopped from alleging the existence of the debt because of the earlier adjudication by the Exchequer Court. The Supreme Court of Canada stated that the tax assessment in respect of the benefit received by the taxpayer is not inconsistent with the obligation to pay for the benefit – see paragraph 6. Laskin and Spence, JJ., dissenting, would have set aside the writ of extent because when the taxpayer in the earlier proceedings alleged a loan as the defence to the assessment and the allegation failed, then such allegation cannot later be “reactivated as between the same parties to provide a different basis upon which to attempt to capture the same sum twice” – see paragraph 25.

Estoppel – Topic 380

Estoppel by record – Res judicata as to subsequent proceedings – A taxpayer was assessed for benefits (indoor swimming pool) which the taxpayer received from a company which was controlled by the taxpayer – The assessment was affirmed after trial in the Exchequer Court – Subsequently in a separate matter a writ of extent in the third degree was issued by the Crown against the taxpayer on the allegation that the taxpayer was indebted to the company which debt arose out of the receipt of the swimming pool by the taxpayer – The Supreme Court of Canada refused to set aside the writ of extent against the taxpayer because the indebtedness of the taxpayer to the company for the swimming pool was not abrogated by the Exchequer Court decision – The Supreme Court of Canada stated that a tax assessment for a benefit received is not inconsistent with an obligation to pay for the benefit – See paragraph 6.

Evidence – Topic 2245

Judicial notice of judicial proceedings – Proof of reasons of judgment – The Supreme Court of Canada granted leave to counsel to refer to reasons of judgment in another matter in the same court which reasons for judgment were not proved at trial – See paragraph 13.

Estoppel – Topic 251

Estoppel by record – Purpose of the rule of issue estoppel and cause of action estoppel – The Supreme Court of Canada stated that the rule is founded on “the general interest of the community in the termination of disputes, and in the finality and conclusiveness of judicial decisions and … the right of the individual to be protected from vexatious multiplication of suits and prosecutions …” – See paragraph 23.

Cases Noticed:

Thoday v. Thoday (1964) P. 181, 198, folld. [paras. 3, 16].

Hoysted v. Federal Commissioner of Taxation (1921), 29 C.L.R. 537, 561, folld. [paras. 3, 20].

Carl Zeiss Stiftung v. Rayner & Keeler Ltd. (No. 2), [1967] 1 A.C. 853, 935, folld. [paras. 3, 16, 20].

Duchess of Kingston’s Case (1776), 20 St. Tr. 355, 538n, folld. [paras. 3, 24].

R. v. Hutchings (1881), 6 Q.B.D. 300, 304, folld. [para. 3].

Society of Medical Officers of Health v. Hope, [1960] A.C. 551, folld. [paras. 3, 20].

Hoystead v. Commissioners of Taxation, [1926] A.C. 155, folld. [para. 3].

Spens v. I.R.C., [1970] 3 All E.R. 295, 301, folld. [para. 3].

Curlett v. Minister of National Revenue, [1961] Ex. C.R. 427, folld. [para. 6].

R. v. Poynton, [1972] 3 O.R. 727, folld. [para. 6].

Attorney General for Trinidad and Tobago v. Eriche, [1893] A.C. 518, 522, folld. [para. 7].

Angle v. Minister of National Revenue, [1969] C.T.C. 624, refd to. [para. 12].

Blair v. Curran (1939), 62 C.L.R. 464, folld. [para. 16].

Caffoor v. Income Tax Commissioner, [1961] A.C. 584, folld. [para. 20].

Broken Hill Proprietary Co. Ltd. v. Broken Hill Municipal Council, [1926] A.C. 94, folld. [para. 20].

New Brunswick Railway Co. v. British and French Trust Corp. Ltd., [1939] A.C. 1, folld. [para. 23].

McIntosh v. Parent (1924), 55 O.L.R. 552, folld. [para. 23].

Wright, McDermott and Feeley v. The Queen, [1963] S.C.R. 539, folld. [para. 24].

Fonseca v. Attorney General of Canada (1889), 17 S.C.R. 612, folld. [para. 24].


C.C. Sturrock, for the appellant;

N.A. Chalmers, Q.C. and G.O. Eggertson, for the respondent.

This appeal was heard by the Supreme Court of Canada on November 7, 1973. Judgment was delivered by the Supreme Court of Canada, May 27, 1974 and the following opinions were filed:

DICKSON, J. – see paragraphs 1 to 9;

LASKIN, C.J.C. – see paragraphs 10 to 27.

MARTLAND and JUDSON, JJ., concurred with DICKSON, J.

SPENCE, J., concurred with LASKIN, J.


Angle v. Minister of National Revenue

[1975] 2 SCR 248

Supreme Court of Canada
Reading Time:
21 minutes
Dickson, Judson, Laskin, Martland, Spence 

: In early 1966 Mrs. Angle caused Transworld Explorations Limited, a company of which she was president and controlling shareholder, to construct at the expense of the company, an indoor swimming pool, sauna bath, mineral bath, barbecue, bar, fireplace, sitting room and office at the rear of property owned by her on Stevens Drive in West Vancouver, British Columbia. The then s. 8(1)(c) of the Income Tax Act provided that where a benefit or advantage was conferred on a shareholder by a corporation the amount or value would be included in computing the income of the shareholder and, acting under the section, the taxing authorities added to Mrs. Angle’s income for the years 1966 and 1967 a total of $52,243.58 for benefits from construction of the pool house and $5,995.82 for furniture and fixtures. Mrs. Angle appealed the assessment. The appeal was heard by Sheppard, D.J., in the Exchequer Court of Canada (1969 C.T.C. 624) and judgment was delivered on November 17, 1969. The judge defined what he referred to as the basic issues in these words:

“That the pool house (i) was received by the appellant as lessor not as “shareholder” within Section 8(1)(c), (ii) was paid for by the appellant and therefore was not “a benefit or advantage”, (iii) or in any event was a benefit received only on expiration of a lease, therefore not in 1966 or 1967 but in 1968.”

The short facts and the manner in which the judge disposed of each of the issues follow:

“(i) On November 1, 1966, six months after the foundations of the pool house were built and after receiving advice that the value of the pool house might be added to her income, Mrs. Angle purported to lease to Transworld the whole of her lot on Stevens Drive for a term of five years at a rental of one dollar per year. A year later, on November 27, 1967, after the pool house had been constructed, a second lease was entered into whereby she purported to lease the property to Transworld for a term of one year at a rental of $6,000 payable $500 per month. The judge held that the pool house was not received by Mrs. Angle as lessor because it was let into the soil; that is, construction was begun before there was any lease; the leases did not operate to divest Mrs. Angle of the pool house vested in her as owner of the freehold and accordingly the benefit was not received by her as lessor but as owner.

“(ii) The scheme by which it was sought to create the impression that Mrs. Angle had paid for the pool house took this form. Her husband arranged for the Toronto-Dominion Bank to loan her $50,000 on December 27, 1967. The proceeds of the loan were deposited to the credit of Transworld but, as the money was assigned to the bank as security for the loan, it could not be withdrawn by Transworld until the loan was paid. In February 1968 Mr. Angle gave Mrs. Angle a cheque for $50,000 drawn on the Transworld account and signed by him as agent for the company with which she repaid the bank loan. The judge rightly concluded that this trumpery did not amount to payment for the pool house.

“(iii) The judge rejected Mrs. Angle’s contention that no benefit would vest in her until the expiration of the lease, holding that the benefit vested not by virtue of an assignment or conveyance by the lessee, but by virtue of Mrs. Angle being the owner of the freehold on which the building was erected. In the result the judge dismissed the appeal and confirmed the assessment except as to furniture and fixtures.”

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