Even though the accountants had recorded the rollover in the financial records and filed the rollover form T2057 to reflect instructions given in October 2011, the rectification application was not allowed because the legal documents were not prepared until June 2013 (and dated then although with backdated effect). The CRA recognized that there was “an oral agreement on October 6, 2011, to undertake a transaction in order to obtain a tax benefit.” But the Court still refused. (An oral agreement can be valid but key components of the rollover were land, for which a written agreement is required under provincial laws descending from the 17th century English Statute of Frauds and also land transfer laws (according to the Crown in this case.))
The Saskatchewan Courts felt they should leave it to the Tax Court to decide whether the late documents would be valid as of June 2011 for tax purposes.
(The TCC has allowed self-help rectifications (i.e., without provincial court order: In Twomey v. The Queen, 2012 TCC 310 (Pizzitelli) the issuance of only 1 share when 100 shares were intended was corrected by directors’ resolution and retroactively met the holding period required for the capital gains exemption, without a rectification order.)