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Federal Court Dismisses CRA Judicial Review
In Couture v Canada (Revenue Agency), 2024 FC 1283, the Federal Court dismissed a taxpayer's judicial review application relating to the Canada Recovery Benefit (CRB).
The CRA successfully argued that the Notice of Application was defective. The Court struck the application and ordered the taxpayer to pay $250 in costs.
This case highlights the need for compliance with Federal Court rules and the risks of pursuing judicial review without guidance from an experienced Canadian tax litigation lawyer.
CRA Judicial Review Deadlines in Federal Court
- Who may apply: Anyone directly affected by a CRA decision (Federal Courts Act, subsection 18.1(1)).
- Time limit: Must be filed within 30 days of the CRA's decision (subsection 18.1(2)).
Grounds for Judicial Review in Canada
Under subsection 18.1(4) of the Federal Courts Act, the Federal Court may intervene if the CRA:
- Acts outside its jurisdiction;
- Fails to observe natural justice or procedural fairness;
- Commits an error of law;
- Bases a decision on unreasonable or capricious findings of fact;
- Acts on fraud or false evidence; or
- Otherwise acts contrary to the law.
If proven, the Court may set aside the decision and send it back to the CRA under subsection 18.1(3).
CRA Judicial Review Pleading Requirements
The Federal Courts Rules impose strict content requirements. Paragraphs 301(d) and (e) require:
- A precise statement of relief sought; and
- A complete and concise statement of grounds.
Vague complaints (e.g., "CRA was unfair" without explanation) are insufficient and risk dismissal.
When Will the Federal Court Strike a Judicial Review?
In Couture, the Court applied case law:
- JP Morgan Asset Management (Canada) Inc v Canada (National Revenue), 2013 FCA 250 – judicial review may only be struck if there is no chance of success.
- Wenham v Canada (Attorney General), 2018 FCA 199 – judicial reviews may fail at:
-
- The preliminary stage (late filing or other remedies available).
- The merits stage (waiver of procedural rights).
- The relief stage (remedy unavailable at law).
What Went Wrong in Couture v CRA?
- The Notice of Application contained no facts or legal grounds.
- The taxpayer failed to specify the relief sought.
- The application breached paragraphs 301(d) and (e) of the Federal Courts Rules.
- The taxpayer also sought to file new evidence, which the Court confirmed is only allowed in rare cases (e.g., procedural defects).
Result: The Court struck the application, denied leave to amend, and awarded $250 in costs to the CRA.
Tax Tip: CRA Judicial Reviews and Self-Representation
Federal Court rules apply equally to lawyers and self-represented taxpayers. Judges remain impartial but cannot waive statutory requirements.
If you are challenging a CRA decision, retaining a top Canadian tax litigation lawyer helps ensure pleadings meet requirements and your case proceeds on the merits.
FAQs: CRA Judicial Review in Federal Court
Can I introduce new evidence in a CRA judicial review?
No, except in rare cases to clarify procedural fairness. Judicial review does not re-try the case—it reviews whether CRA's decision was reasonable.
What happens if I win a judicial review against the CRA?
The Federal Court may:
- Order the CRA to take action it unlawfully refused; or
- Quash or set aside the decision and send it back for redetermination (Federal Courts Act, subsection 18.1(3)).
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
