Request for Commission Evidence in the Tax Court of Canada – Sackman v. The Queen

On October 14, 2011, the Tax Court of Canada heard a Crown motion requesting an order for commission evidence in the case of Sackman v. The Queen (Court file 2002-4824(IT)G). The issue in the appeal is whether the amount Mr. Sackman is entitled to claim as a charitable deduction for artwork obtained from Artistic Ideas Inc. and donated to various charities is (a) the appraised value of the artwork or (b) the purchase price of the artwork.

The motion was brought by the Crown so that the Tax Court may receive the evidence of Mr. Paul Sloan (who lives in California) prior to the hearing pursuant to Section 119 of the Tax Court of Canada Rules (General Procedure). Mr. Sloan had provided works of art to Artistic Ideas Inc., which he obtained through past ownership of various art galleries in the United States.

The Crown argued that Mr. Sloan’s evidence is material. In light of the fact that Mr. Sackman obtained the artwork from Mr. Sloan, Mr. Sloan could provide evidence as to the true value of the artwork. The Crown described the test in GlaxoSmithKline Inc. v. The Queen, which sets out the factors the Tax Court will consider in determining whether to grant a request for commission evidence. The Crown submitted that the request satisfied those criteria.

Counsel for Mr. Sackman submitted that the crux of the GlaxoSmithKline test is to determine whether the evidence is relevant to the case. Counsel argued that the Crown had not provided any evidence or support, either in its written or oral submissions, to demonstrate why Mr. Sloan’s evidence will be material. Counsel also submitted that should the Court grant the request for commission evidence, Mr. Sackman would be prejudiced through yet another delay (the Notice of Appeal was filed on December 16, 2002). Finally, counsel argued that the value of the artwork was supported by reputable appraisers and the manner in which the artwork was acquired or the individual from whom it was acquired should have no bearing on the decision of the Court.

Justice Valerie Miller reserved judgment on the motion.

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