BETWEEN:
and
Heard at Vancouver, British Columbia, on October 27, 2005.
Judgment delivered at Ottawa, Ontario, on November 28, 2005.
| REASONS FOR JUDGMENT BY: |
MALONE J.A. |
| CONCURRED IN BY:
|
DESJARDINS J.A. EVANS J.A. |
Docket: A-454-04
Citation: 2005 FCA 393
CORAM: DESJARDINS J.A.
EVANS J.A.
MALONE J.A.
BETWEEN:
JAMES WALKER
Appellant
and
HER MAJESTY THE QUEEN
Respondent
REASONS FOR JUDGMENT
[1] This appeal canvasses the scope of section 18.5 of the Federal Courts Act R.S.C. 1985, c. F-7 (the Act) and the powers of the Federal Court where the statutory authority of the Minister of National Revenue (the Minister) to carry out collection proceedings against a taxpayer under the Income Tax Act R.S.C. 1985, c.1 (5th Suppl.) (the ITA), is challenged. Section 18.5 of the Act reads as follows:
| 18.5 Despite sections 18 and 18.1, if an Act of Parliament expressly provides for an appeal to the Federal Court, the Federal Court of Appeal, the Supreme Court of Canada, the Court Martial Appeal Court, the Tax Court of Canada, the Governor in Council or the Treasury Board from a decision or an order of a federal board, commission or other tribunal made by or in the course of proceedings before that board, commission or tribunal, that decision or order is not, to the extent that it may be so appealed, subject to review or to be restrained, prohibited, removed, set aside or otherwise dealt with, except in accordance with that Act. |
18.5 Par dérogation aux articles 18 et 18.1, lorsqu'une loi fédérale prévoit expressément qu'il peut être interjeté appel, devant la Cour fédérale, la Cour d'appel fédérale, la Cour suprême du Canada, la Cour d'appel de la cour martiale, la Cour canadienne de l'impôt, le gouverneur en conseil ou le Conseil du Trésor, d'une décision ou d'une ordonnance d'un office fédéral, rendue à tout stade des procédures, cette décision ou cette ordonnance ne peut, dans la mesure où elle est susceptible d'un tel appel, faire l'objet de contrôle, de restriction, de prohibition, d'évocation, d'annulation ni d'aucune autre intervention, sauf en conformité avec cette loi. |
[2] The order under appeal was rendered by Beaudry J., a judge of the Federal Court (the Applications Judge), on August 11, 2004. Reasons in support are reported as 2004 FC 1105.
II. Background
[3] Mr. Walker filed his 1998 tax return on April 30, 1999, and received a notice of assessment for that taxation year on May 20, 1999.
[4] According to affidavit evidence filed by a manager of the Canada Revenue Agency, a notice of reassessment for the 1998 tax year was sent by registered mail to the appellant on May 13, 2002, and was returned unclaimed. Mr. Walker deposes that he never received the notice of reassessment. The first he claims he heard of it was when he was contacted in August of 2002 by a collections officer regarding an amount allegedly due for 1998. The Minister's collection efforts rest on the alleged mailing of the notice of reassessment to the appellant.
[5] On October 7, 2003, the appellant commenced an application for judicial review in the Federal Court for an order declaring that no debt was owing in respect of the 1998 taxation year, since no notice of reassessment was ever sent, and restraining the Minister from further collection action.
[6] On October 31, 2003, a document purporting to be a copy of the 1998 notice of reassessment was provided to Mr. Walker's lawyer. The appellant filed a notice of objection to this document on December 19, 2003 and subsequently a notice of appeal in the Tax Court of Canada. That proceeding is now in abeyance as the Minister has filed a motion, as yet unheard, to the effect that the notice of objection is out of time pursuant to subsection 165 (1) of the ITA. That subsection reads:
| 165. (1) A taxpayer who objects to an assessment under this Part may serve on the Minister a notice of objection, in writing, setting out the reasons for the objection and all relevant facts,
(a) where the assessment is in respect of the taxpayer for a taxation year and the taxpayer is an individual (other than a trust) or a testamentary trust, on or before the later of
(i) the day that is one year after the taxpayer's filing-due date for the year, and
(ii) the day that is 90 days after the day of mailing of the notice of assessment; and
(b) in any other case, on or before the day that is 90 days after the day of mailing of the notice of assessment. |
165. (1) Le contribuable qui s'oppose à une cotisation prévue par la présente partie peut signifier au ministre, par écrit, un avis d'opposition exposant les motifs de son opposition et tous les faits pertinents, dans les délais suivants:
a) lorsqu'il s'agit d'une cotisation relative à un contribuable qui est un particulier (sauf une fiducie) ou une fiducie testamentaire, pour une année d'imposition, au plus tard le dernier en date des jours suivants:
(i) le jour qui tombe un an après la date d'échéance de production qui est applicable au contribuable pour l'année,
(ii) le 90e jour suivant la date de mise à la poste de l'avis de cotisation;
b) dans les autres cas, au plus tard le 90e jour suivant la date de mise à la poste de l'avis de cotisation. |
III. The Decision Below
[7] The application for judicial review was heard by Beaudry J. on July 20, 2004. The Applications Judge concluded that section 18.5 of the Act barred Mr. Walker from judicial review because he had a right of appeal under subsection 169 (1) of the ITA. That subsection reads as follows:
| 169. (1) Where a taxpayer has served notice of objection to an assessment under section 165, the taxpayer may appeal to the Tax Court of Canada to have the assessment vacated or varied after either
(a) the Minister has confirmed the assessment or reassessed, or
(b) 90 days have elapsed after service of the notice of objection and the Minister has not notified the taxpayer that the Minister has vacated or confirmed the assessment or reassessed,
but no appeal under this section may be instituted after the expiration of 90 days from the day notice has been mailed to the taxpayer under section 165 that the Minister has confirmed the assessment or reassessed. |
169. (1) Lorsqu'un contribuable a signifié un avis d'opposition à une cotisation, prévu à l'article 165, il peut interjeter appel auprès de la Cour canadienne de l'impôt pour faire annuler ou modifier la cotisation:
a) après que le ministre a ratifié la cotisation ou procédé à une nouvelle cotisation;
b) après l'expiration des 90 jours qui suivent la signification de l'avis d'opposition sans que le ministre ait notifié au contribuable le fait qu'il a annulé ou ratifié la cotisation ou procédé à une nouvelle cotisation;
toutefois, nul appel prévu au présent article ne peut être interjeté après l'expiration des 90 jours qui suivent la date où avis a été expédié par la poste au contribuable, en vertu de l'article 165, portant que le ministre a ratifié la cotisation ou procédé à une nouvelle cotisation. |
[8] In reaching this conclusion, Beaudry J. relied on the decision of this Court in Optical Recording Corp. v. Canada, [1991] 1 F.C. 309 (C.A) [Optical], which decided that the ITA provided the Tax Court of Canada with the full and appropriate procedure for appealing all issues regarding assessments and reassessments, including whether the notice of the reassessment was sent on May 13, 2002.
[9] The appellant now appeals, asserting that section 18.5 of the Act allows the Federal Court to review the legality of the Minister's collection process and, incidentally, to decide whether the Minister has established that the notice of reassessment was sent. The appellant argues that any question as to the mailing of the notice of reassessment is necessarily collateral to a review of the Minister's conduct.
IV. Standard of Review
[10] The issue under review is whether section 18.5 of the Act allows the Federal Court to judicially review these collection proceedings, or if the Court is precluded by the exclusive jurisdiction granted to the Tax Court of Canada by section 169 of the ITA. Since this inquiry involves a question of law the appropriate standard is one of correctness.
V. Analysis
[11] In enacting section 18.5, Parliament intended to avoid parallel proceedings in the Federal Court in those instances where a federal statute expressly provides for an appeal in another forum. Here, the notice of reassessment is an administrative act of a government official that falls within the broad parameters of section 18.1 of the Act giving rise to judicial review (see Evans, J., as he then was, in Markevich v. the Queen, [1999] 3 F.C. 28 at paragraph 14). At the same time, Parliament has enacted sections 165, 169 and 180 of theITA, which comprise a complete appeal procedure which allows the appellant to raise in the Tax Court of Canada all issues relating to his reassessment.
[12] The appellant acknowledges that in the Tax Court proceeding the issue of whether a notice of reassessment for the 1998 taxation year was sent to him within the statutory time limit would be raised. In this case, the resolution of that issue will require a determination as to whether a notice of reassessment for the 1998 taxation year was mailed to the appellant by May 20, 2003, the end of the "normal reassessment period" as defined in subsection 152 (3.1) of the ITA.
[13] Put another way, the legal efficacy of the key document in this case, the document entitled "notice of reassessment" which the Minister alleges was mailed on May 13, 2002, is a matter to be determined by the Tax Court of Canada in an income tax appeal. Section 18.5 of the Act should be interpreted, as far as possible, to preclude parallel proceedings in the Federal Court and the Tax Court of Canada in respect of substantially the same underlying issue. In this case, section 18.5 should preclude the Federal Court from entertaining an application for judicial review in which the critical issue is the legal efficacy of that key document. In my view, it makes no difference that the appellant claims to be seeking such a determination, not as an end in itself, but in support of his application for an order precluding the Minister from relying on the key document as a basis for collection action.
[14] In support of his submissions, the appellant relied on a decision of the Supreme Court of Canada in Markevich v. the Queen, [2003] 1 S.C.R. 94. In that case, the Federal Court undertook a judicial review of the Minister's decision to collect a tax debt that was time barred, but in so doing that Court was not required to determine anything that could also have been determined by the Tax Court of Canada. Accordingly the Markevich decision is of no assistance to the appellant in the present appeal.
[15] An application for judicial review may be made to the Federal Court to challenge the legality of collection measures taken by the Minister to collect taxes allegedly due. However, the Federal Court's jurisdiction does not extend to an application involving an attack on the underlying reassessment on which collection measures are based. In the present case, the appellant says that the Minister cannot justify collection measures by relying on a reassessment allegedly made in May 1998 without proving that notice of it was mailed to him. This is sufficient to engage section 18.5.
[16] For this reason, I would dismiss this appeal with costs.
"I agree
Alice Desjardins
J.A."
"I agree
John M. Evans
J.A."
FEDERAL COURT OF APPEAL
NAMES OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: A-454-04
STYLE OF CAUSE: James Walker v. Her Majesty the Queen
PLACE OF HEARING: Vancouver, British Columbia
DATE OF HEARING: October 27, 2005
REASONS FOR JUDGMENT BY: Malone J.A.
CONCURRED IN BY: Desjardins J.A.
APPEARANCES:
| FOR THE APPELLANT
|
|
| FOR THE RESPONDENT
|
SOLICITORS OF RECORD:
|
Vancouver, British Columbia |
FOR THE APPELLANT
|
|
Deputy Attorney General for Canada |
FOR THE RESPONDENT
|