Date: 20160817

Docket: A-39-15

Citation: 2016 FCA 205

Heard at Edmonton, Alberta, on May 11, 2016.

Judgment delivered at Ottawa, Ontario, on August 17, 2016.

Date: 20160817

Docket: A-39-15

Citation: 2016 FCA 205

REASONS FOR JUDGMENT

WEBB J.A.

[1]               Mr. Beima has appealed the Order dated February 5, 2015 of D’Arcy J. of the Tax Court of Canada (Tax Court of Canada docket: 2013-3832(GST)I) quashing his appeal under the Excise Tax Act, R.S.C. 1985, c. E-15 (the Act) with respect to:

−        the reporting periods between January 1, 2006 and December 31, 2009; and

−        the reporting period from January 1, 2012 to December 31, 2012.

[2]               For the reasons that follow, I would dismiss his appeal.

I.                   Background

[3]               Mr. Beima is carrying on business as a sole proprietor. He was initially assessed under the Act for the following reporting periods:

[4]               Mr. Beima did not file a notice of objection in relation to any of these assessments within the time period for doing so as set out in section 306 of the Act but he did write to the Minister of National Revenue (the Minister) on June 24, 2013 to request an extension of time to file a notice of objection. This request was granted but only for the reporting periods between January 1, 2010 and December 31, 2011.

[5]               Returns under the Act were filed on August 7, 2013 for the reporting periods between January 1, 2006 and December 31, 2012. On September 3, 2013, Mr. Beima was reassessed for the reporting periods between January 1, 2006 and December 31, 2011 and assessed for the reporting period of January 1, 2012 to December 31, 2012.

[6]               On October 10, 2013, Mr. Beima filed a notice of appeal to the Tax Court of Canada.

[7]               The Tax Court Judge quashed his appeal with respect to the reporting periods between January 1, 2006 and December 31, 2009 and from January 1, 2012 to December 31, 2012 because Mr. Beima had not filed a notice of objection for these reporting periods. The appeal related to the reporting periods between January 1, 2010 and December 31, 2011 was not quashed and is not in issue in this appeal.

II.                Issue

[8]               The only issue raised by Mr. Beima in his notice of appeal and addressed by him at the hearing of his appeal was whether the Tax Court Judge erred in quashing his appeal for the reporting periods noted above.

III.             Analysis

[9]               Mr. Beima acknowledges that he did not file any notice of objection for any of the reporting periods in issue in this appeal.

[10]           He argues that he was appealing the assessments dated September 3, 2013 to the Tax Court of Canada and not the assessments that had been issued earlier. He also argues that he had been informed by an employee of the Canada Revenue Agency that, with respect to these assessments, he could either file a notice of objection with the Minister or appeal these to the Tax Court of Canada. Mr. Beima, in his memorandum, referred to the letter dated September 19, 2013 from Ms. Major as the source of this information. However, the reference line of this letter indicates that it is addressing the reporting periods from January 1, 2010 to December 31, 2011. This short letter also states that:

Your return for the period January 1, 2010 to December 31, 2011 was reassessed September 3, 2013. This subsequent reassessment invalidates your notice of objection.

If the subsequent reassessment has not resolved the issue, you may either file a second notice of objection or appeal directly to the Tax Court of Canada. Information on how to file an appeal is enclosed.

[11]           It is clear that the letter is only addressing the reporting periods from January 1, 2010 to December 31, 2011 for which the Minister had accepted his request for an extension of time to file a notice of objection. Under section 302 of the Act, Mr. Beima did have the right to appeal the September 3, 2013 reassessment of these reporting periods to the Tax Court of Canada. The issue in this appeal is not whether he could appeal the reassessment of these reporting periods but rather whether he could file an appeal to the Tax Court of Canada in relation to the other reporting periods – between January 1, 2006 and December 31, 2009 and from January 1, 2012 to December 31, 2012.

[12]           Mr. Beima, following the September 3, 2013 assessments, did not file any notice of objection with the Minister in relation to these assessments – he only filed the notice of appeal to the Tax Court of Canada. Therefore, no notice of objection has been validly filed for the September 3, 2013 assessments of the reporting periods between January 1, 2006 and December 31, 2009 or for the reporting period from January 1, 2012 to December 31, 2012.

[13]           Subsection 12(1) of the Tax Court of Canada Act, R.S.C., 1985, c. T-2, provides that the Tax Court of Canada has the jurisdiction to hear and determine appeals under the Act. However, the appeal must be an appeal that is made in accordance with the provisions of the Act. Section 306 of the Act provides that a “person who has filed a notice of objection to an assessment under this Subdivision may appeal to the Tax Court to have the assessment vacated or a reassessment made…”. Therefore, before a person can file an appeal to the Tax Court of Canada, the person must first have filed a notice of objection to the assessment in issue. Failing to file a notice of objection to a particular assessment will result in the person not having the right to appeal that assessment to the Tax Court of Canada. Since Mr. Beima did not file a notice of objection in relation to the assessments issued on September 3, 2013, he did not have the right to file a notice of appeal in relation to these assessments for the reporting periods between January 1, 2006 and December 31, 2009 and from January 1, 2012 to December 31, 2012.

[14]           Mr. Beima referred to subsection 305(1) of the Act which allows a person to apply for an extension of time to file an appeal to the Tax Court of Canada. However, the concern in this matter is not that he was late in filing his notice of appeal but rather that he was premature because he had not satisfied the condition precedent that would have entitled him to file the notice of appeal. Since Mr. Beima had not filed a notice of objection to the assessments issued on September 3, 2013, the time period within which an appeal could have been filed under section 306 of the Act had not commenced. An extension of time is not available if the time period has not commenced.

[15]           Mr. Beima also referred to section 307 of the Act which relates to the manner in which certain appeals are to be instituted. However, this section applies to an appeal “other than one referred to in section 18.3001 of the Tax Court of Canada Act”. Since Mr. Beima’s attempted appeal was under the informal procedure, it was an appeal under section 18.3001 of the Tax Court of Canada Act. Hence, section 307 of the Act is not applicable.

[16]           At the hearing of the appeal, Mr. Beima referred to subsection 301(4) of the Act which allows the Minister to confirm an assessment without reconsideration. This subsection, however, only applies where a person has made this request in a notice of objection. Since no notice of objection was filed by Mr. Beima, this section does not apply.

[17]           In his memorandum, Mr. Beima also requested an order allowing him to refile affidavits that had been struck from the record. These affidavits were part of 97 pages that had been attached to Mr. Beima’s two page notice of appeal. As noted by the Tax Court Judge, evidence is to be introduced at the hearing of the appeal and not as part of the notice of appeal. In Zelinski v. The Queen, [2001] T.C.J. No. 774, 2002 D.T.C. 1204, Bowie J. noted that:

4          The purpose of pleadings is to define the issues in dispute between the parties for the purposes of production, discovery and trial. What is required of a party pleading is to set forth a concise statement of the material facts upon which she relies. Material facts are those facts which, if established at the trial, will tend to show that the party pleading is entitled to the relief sought. Amendments to pleadings should generally be permitted, so long as that can be done without causing prejudice to the opposing party that cannot be compensated by an award of costs or other terms, as the purpose of the Rules is to ensure, so far as possible, a fair trial of the real issues in dispute between the parties.

5          The applicable principle is stated in [Holmsted and Watson Ontario Civil Procedure, Vol. 3, pages 25-20 to 25-21]:

This is the rule of pleading: all of the other pleading rules are essentially corollaries or qualifications to this basic rule that the pleader must state the material facts relied upon for his or her claim or defence. The rule involves four separate elements: (1) every pleading must state facts, not mere conclusions of law; (2) it must state material facts and not include facts which are immaterial; (3) it must state facts and not the evidence by which they are to be proved; (4) it must state facts concisely in a summary form.

[18]           As pleadings are to state material facts and not the evidence by which such facts would be proven, the Tax Court Judge did not commit any error in striking the schedules to the notice of appeal, including the affidavits that Mr. Beima is seeking to reinstate. At his hearing before the Tax Court of Canada in relation to the reporting periods between January 1, 2010 and December 31, 2011, Mr. Beima can submit such documents as he believes are relevant. At such hearing, the presiding judge can determine the admissibility of such documents, if admissibility is in issue.

[19]           In his notice of appeal to this Court Mr. Beima had also requested “the addition of the taxation year of 2005” to his appeal before the Tax Court of Canada. There is no indication of when or even if there is an assessment or reassessment for the reporting period from January 1, 2005 to December 31, 2005. Since the matter before this Court is an appeal from the Order of the Tax Court of Canada quashing the appeals in relation to the reporting periods referred to above and since the reporting period for January 1, 2005 to December 31, 2005 was not before the Tax Court, there is no authority for this Court to add this reporting period to Mr. Beima’s appeal to the Tax Court of Canada.

[20]           As a result, I would dismiss Mr. Beima’s appeal, with costs, fixed in the amount of $1,500.

"Wyman W. Webb"

“I agree.

J.D. Denis Pelletier J.A.”

“I agree.

Yves de Montigny J.A.”

Appendix

Statutory Provisions

Tax Court of Canada Act:

Excise Tax Act:

FEDERAL COURT OF APPEAL

NAMES OF COUNSEL AND SOLICITORS OF RECORD

(APPEAL FROM AN ORDER OF THE HONOURABLE MR. JUSTICE D’ARCY OF THE TAX COURT OF CANADA DATED FEBRUARY 5, 2015, DOCKET NUMBER 2013-38329(GST)I)

APPEARANCES:

SOLICITORS OF RECORD: