Date: 20020304
Docket: T-2075-00
Neutral citation: 2002 FCT 234
Ottawa, Ontario, Monday, the 4th day of March, 2002.
PRESENT: The Honourable Mr. Justice MacKay
BETWEEN:
ALASDAIR MACKAY
Applicant
- and -
HER MAJESTY THE QUEEN, representing THE
CANADA CUSTOMS AND REVENUE AGENCY
Respondent
[1] These reasons concern the disposition of the application by Alasdair MacKay for judicial review and an order setting aside the decision made at the Surrey Taxation Centre of the Canada Customs and Revenue Agency ("CCRA") on October 12, 2000 which denied the applicant's request for waiver or adjustment of interest assessed in relation to income tax arrears for the years 1988 and 1989.
[2] After consideration of submissions made, by Mr. MacKay, a self-represented litigant who is not a lawyer, and by counsel on behalf of the respondent, when the matter was heard in Vancouver in June 2001, and with regret for delay in disposing of the matter, an order now goes dismissing the application.
[3] The circumstances of the applicant may attract considerable sympathy. In March 1989, he left Canada to return to his family home in Scotland because of illness of his father. He claims that at that time he had a credit balance of $425.48 in his income tax account. He apparently left a forwarding address with his employer, at his former residence, and at the post office, anticipating mail would be forwarded to him. By affidavit he says that he also left a forwarding address with his tax office, and as we shall see the records of that office did indicate a change of address for him, at least by 1990.
[4] Mr. MacKay was unable to return to Canada until July 1, 1997. He had heard nothing from Revenue Canada from the time of his departure in 1989 until September 1999 when he received a letter from Revenue Canada stating that he owed $4,837.25, consisting of a tax liability of $1,962.83 and the balance as interest accrued on the outstanding principal. The tax liability arose from reassessment of his 1988 taxes, by notice dated April 5, 1990 and assessment of tax for 1989 by notice dated April 10, 1990. Both of those notices are said, in letters dated July 10, 2000 and August 25, 2000, to have been sent to him at an address entered in Revenue Canada records on March 19, 1990 as:
C/O B MCKROW
17-2205 SOUTH MILLWAY
MISSISSAUGA, ON L5L 3T2
[5] Those letters appear as exhibits to his affidavit in the application record of Mr. MacKay and he does not, in the affidavit or correspondence in that record, deny that was the appropriate address after his return to Scotland. I note those letters, in July and August 2000, also indicate that statements dated May 14 and June 18 of 1990, concerning the assessments, were also sent to that address in Ontario.
[6] After learning of the claim for outstanding tax and interest, in early 2000 Mr. MacKay made arrangements for payment of the outstanding tax arrears, and applied for a waiver or adjustment of the interest assessed. He raised for consideration that he had been unaware of the claim for tax arrears and interest until the fall of 1999, that since his return to Canada he had been unemployed and was then engaged in further training although the limits of financial resources available to him were not specified. Then and in several subsequent requests for reconsideration of the matter he emphasized that he had not knowingly avoided payment of the interest due or of the arrears of tax, and that his record in payment of tax obligations had previously been entirely acceptable and he did arrange in February 2000 for payment of the outstanding taxes excluding interest.
[7] Despite his entreaties in successive letters, to which different officers of the agency responded, often with considerable delay, and his request to meet with someone to discuss his situation, the agency declined to grant his request for a waiver or adjustment of interest claimed. The record of his correspondence with CCRA shows that he wrote in January 2000 requesting relief, a letter replied to three months later in April; again he wrote in February 2000 agreeing to pay the tax arrears and requesting relief of the interest claim, a letter responded to on February 15 which accepted arrangements for payment of tax arrears, and by a further letter on July 10, 2000 refusing the request for relief of interest.
[8] Mr. MacKay again requested reconsideration by letter of July 11, 2000 in which he also requested a meeting with someone from CCRA, requests that were refused by letter of August 9, 2000. Again he wrote on August 15, but his request for relief and for a meeting were refused by letter of August 25, 2000. His final request by letter dated September 15, 2000 was addressed to the Director, the Surrey Tax Centre, as had been suggested to him by CCRA's letter of August 25, 2000. This led only to advice by letter of October 12, 2000, that the decision contained in the letter of August 25 denying his request, had been made on behalf of the Director. Thereafter, the applicant applied for judicial review.
[9] The Income Tax Act provides by subsection 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 a partnership.
The Act provides no process and no indication of matters to be considered by the Minister for the exercise of the discretion vested by this provision. There are guidelines set out in information circular 92-2 for its exercise, and the Act and guidelines are commonly referred to as the "Fairness provisions".
[10] The guidelines set out examples of circumstances where cancelling or waiving interest or penalties may be warranted. Those are circumstances perceived by the CCRA to be beyond a taxpayer's control, or which arose primarily because of actions of the department, or as a result of natural or unanticipated disasters.
[11] In this case the correspondence from the agency, included as exhibits to the affidavit of Alasdair MacKay in the record filed in this matter, makes clear that the agency's refusal of his request was based upon its conclusion, in the absence of any evidence of financial hardship on the applicant's part, that having forwarded notice of assessments to him in 1990 at the address which was listed in the department's record for him, his failure to be informed of the assessments was not a matter in which the agency or its predecessor department was at fault. The taxpayer is expected to provide a change of address. The address here provided was used by the department in 1990. It was not beyond the taxpayer's control to arrange for tax information to reach him, particularly since he must have been aware that there would be tax liability for 1988 for which his tax liability was not fully reported, and since tax was not reported for the portion of the year 1989 in which he was employed in Canada, before leaving to go to Scotland.
[12] As my colleague, Mr. Justice Pelletier determined in Sharma v. The Minister for Canada Customs and Revenue Agency, [2001] F.C.J. No. 867 (T.D.), the standard of review for decisions concerning the exercise of discretion of the Minister, or of the agency on his behalf, is patent unreasonableness, a standard based on a high degree of deference to the exercise of discretion, particularly since the discretion concerns a relieving provision under the Income Tax Act.
[13] Neither the fact that this Court might come to a different conclusion than the agency acting on behalf of the Minister, nor the fact that the agency's treatment of inquiries by the applicant was far less than any service operation should strive for, are grounds for the Court to intervene. There is no evidence of bad faith on the part of the agency. There is evidence that it did seek to provide in 1990 timely advice of tax assessments to the applicant by sending notice to an address apparently provided by him or on his behalf.
[14] In these circumstances, I am not persuaded that the decision by the agency can be said to be patently unreasonable. In light of this conclusion, the application for judicial review is dismissed.
ORDER
1. This application for judicial review is dismissed;
2. The style of cause in this matter shall henceforth be as it is set out at the commencement of these Reasons for Order and Order.
W. Andrew MacKay
Judge
Ottawa, Ontario
March 4, 2002
FEDERAL COURT OF CANADA
TRIAL DIVISION
Date: 20020304
Docket: T-2075-00
BETWEEN:
ALASDAIR MACKAY
Applicant
- and -
HER MAJESTY THE QUEEN,
representing THE
CANADA CUSTOMS AND REVENUE
AGENCY
Respondent
REASONS FOR ORDER AND ORDER