Writing Position Letters: Some Tips from an FCA Justice

Editor's note: This article is an edited version of a portion of a May 2012 luncheon address to the Toronto Young Practitioners chapter presented by the Hon. David W. Stratas of the Federal Court of Appeal.

As everyone knows, the minister has many discretions to exercise under the Income Tax Act. Generally, before these discretions are exercised, taxpayers and their advisers (accountants, lawyers, etc.) exchange position letters with the CRA auditors (or appeals officers). Typically, an auditor will propose certain adjustments or results, and the taxpayer will counter with his or her position. These position letters can matter when the minister's exercise of discretion is challenged in court.

On an application for judicial review, the court evaluates whether the minister's decision falls within a range of acceptability and defensibility on the facts and the law. The setting of the range and whether the exercise of discretion falls within the range is a rather subjective matter. Even if the minister's exercise of discretion falls outside the range, the court has a remedial discretion--again, a subjective matter.

Position letters, whether written by the minister or by the taxpayer, are often placed before the court. If a position letter is badly conceived and poorly executed, it may leave a less than ideal impression or even repel the court.

For the benefit of those who will write position letters, whether they are members of the minister's staff or the taxpayer's advisers, here are some tips:

  1. Know your audiences. Your immediate audience is the other side, but judges are your ultimate audience. Another audience may be the person instructing you. Sometimes you may have to explain to that person that a point they love is one the judges will hate.

  2. Understand the judicial audience. Judges want to be educated about the matter. They insist on accuracy and prefer temperate language. They try to decide justly, consistent with the law. Most of all, judges are practical problem solvers in search of simple solutions. As you draft your position letter, keep these characteristics in mind.

  3. Identify the controlling matters. The controlling matters are the particular facts or legal points upon which the outcome will turn. Usually there are very few controlling matters, and sometimes there may be just one. Emphasize the things that most directly lead to success on the controlling matters.

  4. Concentrate on the substance early. No amount of nice-sounding prose will cover up a weak position. To develop and express a strong position, you need to investigate and identify everything potentially in support of your position--at the outset. Too often this is done later, if at all, and later position letters end up stuffed with new or revised facts and arguments. To a judge, this can look like desperate scrambling to patch a weak case--or, worse, like a fish flopping around in a boat, caught and soon to be fileted.

  5. Engage in selection. Once you have identified everything that is potentially useful, select the best bits, bearing in mind the characteristics of the judicial audience mentioned in point 2 above. Be courageous: leave the small stuff on the cutting-room floor. The best bits have to shine through, unobscured by trivia.

  6. Write well. The forthcoming online version of this article (to be published on the Toronto YP pages of the Canadian Tax Foundation's website) will offer more detailed guidance on this point. Some instructional books on writing are worth their weight in gold--for example, Bryan A. Garner, Legal Writing in Plain English; Stephen V. Armstrong and Timothy P. Terrell, Thinking Like a Writer: A Lawyer's Guide to Effective Writing and Editing; Joseph M. Williams, Style: Toward Clarity and Grace; and Richard C. Wydick, Plain English for Lawyers.

I hope that you find some of these suggestions helpful. I wish you all the best.

Hon. David W. Stratas
Federal Court of Appeal

Canadian Tax Focus
Volume 2, Number 3, August 2012
©2012, Canadian Tax Foundation