Date: 19980316
Docket: T-1447-95
BETWEEN:
PROTECH CONSTRUCTION LTD.,
Applicant,
- and -
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR ORDER
TREMBLAY-LAMER J.:
[1] This is an application for judicial review of the decision of Denis G. Farling, Chief of Appeals, Revenue Canada, wherein he refused to waive the penalty imposed on the Applicant for the late filing of its remittance.
[2] The corporate Applicant was required to make its remittance for the month of February 1995, by March 15, 1995. According to the affidavit of Lance G.A. Vrabek, who was contracted by the Applicant to handle certain financial tasks, the remittance was mailed on the evening of March 10, 1995. However, Revenue Canada only received it on March 17, 1995. As a result, the Applicant was assessed a late filing penalty in the amount of $250.76.
[3] The Applicant requested relief pursuant to subsection 220(3.1) of the Income Tax Act1 which allows the Minister to waive or cancel such penalties. Revenue Canada refused to cancel the penalty.
[4] The Applicant submitted another request for relief which was referred to Denis G. Farling, Chief of Appeals. Mr. Farling concluded that the cancellation of the Applicant"s penalty was not warranted. Specifically, he noted that the Applicant had a history of being late in making remittances:
| I note that this is not the first time that this client [Protech Construction Ltd.] has been late in making remittances and the last time the [sic] your client was advised that payment ought to be made at a financial institution by the due date in order to avoid the penalty, I understand there was agreement to do this and you state in your letter that you normally would make the payment at the financial institution. I view this as a matter of choice how that payment ought to be made knowing that there is a risk that it would be late if it went through the mail and since this is a repeat occurrence I do not think that the penalty ought to be cancelled. |
[5] The Applicant submits that the Minister failed to apply the assessment of remittance penalties in a fair and consistent manner. In his affidavit, Lance Vrakek states he mailed a second remittance on behalf of another company at the same time as the Applicant"s one. This second remittance was received by Revenue Canada on March 16, and yet no penalty was assessed. Further, the Minister erred in not recognizing that the decision to waive the penalty should be based on the Applicant"s agent"s record and not on the Applicant"s one. Finally, the Minister also erred in not recognizing errors made by Revenue Canada, which are possibly contributing factors.
[6] The Respondent submits that in the circumstances of this case, the Court"s intervention is not warranted because the Minister, through his delegate, properly exercised his discretion. His decision was based on relevant considerations and made in a rational manner with regard to all the facts before him.
[7] As previously stated, subsection 220(3.1) of the Income Tax Act gives the Minister of National Revenue2 the discretion to cancel or waive a penalty. The subsection reads:
| 220(3.1) The Minister may at any time waive or cancel all or any portion of any penalty or interest otherwise payable under this Act by a taxpayer or partnership and, notwithstanding subsections 152(4) to (5), such assessment of the interest and penalties payable by the taxpayer or partnership shall be made as is necessary to take into account the cancellation of the penalty or interest. |
220(3.1) Le ministre peut, à tout moment, renoncer à tout ou partie de quelque pénalité ou intérêt payable par ailleurs par un contribuable ou une société de personnes en application de la présente loi, ou l"annuler en tout ou en partie. Malgré les paragraphes 152(4) à (5), le ministre établit les cotisations voulues concernant les intérêts et pénalités payables par le contribuable ou la société de personnes pour tenir compte de pareille annulation. |
[8] In order to assist in the exercise of that discretion, the Minister has implemented guidelines to be followed in applying the legislation. Revenue Canada Information Circular 92-2 dated March 18, 1992, is particularly relevant. Paragraph 10 provides:
| 10. The following factors will be considered when determining whether or not the Department will cancel or waive interest or penalties: |
| (a) whether or not the taxpayer or employer has a history of compliance with tax obligations; |
| (b) whether or not the taxpayer or employer has knowingly allowed a balance to exist upon which arrears interest has accrued; |
| (c) whether or not the taxpayer or employer has exercised a reasonable amount of care and has not been negligent or careless in conducting their affairs under the self-assessment system; |
| (d) whether or not the taxpayer or employer has acted quickly to remedy any delay or omission. |
[9] It is settled law that the scope of judicial review of discretionary decisions is quite narrow. Where the discretion has been exercised in good faith, in accordance with the principles of natural justice, taking into account all relevant considerations and without reliance placed upon irrelevant ones, the Court should not interfere.3
[10] In the case at bar, there is no evidence that the Minister"s delegate improperly exercised his discretion.
[11] First, the decision of the Chief of Appeals is rational and based on relevant considerations. When assessing the particular circumstances of this case, the Chief of Appeals took into account the considerations outlined in paragraph 10 of its own guidelines. In fact, he took into account the Applicant"s history of non-compliance with its tax obligations.
[12] Second, whether or not taxpayers have been assessed penalties in similar situations is irrelevant. As stated by Rouleau J. in Kaiser v. Canada (Minister of National Revenue):4
| The applicant takes exception to the fact that other taxpayers who engaged in commodity trading on the London Metal Exchange through VLR were not assessed for interest in the same manner [sic] he was. However, that does not constitute a basis for overturning the impugned decision. Every case is required to be decided on its own merit in order that circumstances unique to that individual taxpayer are properly taken into account. The fact the respondent exercised its discretion in a different manner for different taxpayers is not an indication of bad faith. It is simply reflective of the fact that when the Minister exercises his discretion under subsection 220(3.1), he is required to take into account considerations relevant and unique to that taxpayer alone. Indeed, were he to fail to exercise his discretionary power in that manner and simply apply the same rule to all taxpayers regardless of their individual circumstances, he would be fettering the discretion bestowed upon him by the legislation.5 |
[13] Finally, whether the Applicant"s agent has been late on previous occasions with any remittances is also an irrelevant factor in determining the reasons for late remittance. It is the Applicant"s own responsibility to ensure that its remittance is received before the deadline.
[14] Therefore, the Court"s intervention is not warranted. For these reasons, the application for judicial review is dismissed.
(Sgd.) "Daniele Tremblay-Lamer"
Judge
VANCOUVER, BRITISH COLUMBIA
March 16, 1998
FEDERAL COURT TRIAL DIVISION
NAMES OF COUNSEL AND SOLICITORS OF RECORD
DATED: March 12, 1998
COURT NO.: T-1447-95
STYLE OF CAUSE: Protech Construction Ltd.
v.
Her Majesty the Queen
PLACE OF HEARING: Vancouver, BC
REASONS FOR ORDER OF TREMBLAY-LAMER, J.
dated March 16, 1998
APPEARANCES:
Mr. L. G. A. Vrabek for Applicant
Mr. R. Carvalho for Respondent
SOLICITORS OF RECORD:
George Thomson for Respondent
Deputy Attorney General
of Canada
[15]
__________________1 R.S.C. 1985 (5th Supp.), c. 1.
2 By virtue of paragraph 900(4)(b) of the Income Tax Regulations, the authority to take decisions under subsection 220(3.1) is conferred on the Chief of Appeals.
3 Bilida v. Canada (Minister of National Revenue) (1996), 124 F.T.R. 172 (T.D.); Bourgeois v. Canada (Revenue) (1996), 96 D.T.C. 6304; Orsini Family Trust v. Canada (Revenue Canada, Customs, Excise & Taxation) (1996), 112 F.T.R. 289 (T.D.); Kaiser v. Canada (Minister of National Revenue), (1995) 95 D.T.C. 5187; Guimont v. Canada (Minister of National Revenue) (1993), 72 F.T.R. 192 (T.D.).