Date: 20020725
Docket: 2001-4579-GST-G
BETWEEN:
JOZO (JOE) KOVACEVIC,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Reasons for order
Bonner, T.C.J.
[1] The Minister of National Revenue (the "Minister") assessed the Appellant under s. 323 of the Excise Tax Act (the "Act") on October 31, 1996. On December 15, 1996, the Appellant objected to the assessment.
[2] The Respondent asserts that the Minister confirmed the assessment under ss. 301(3) of the Act and that on May 8, 1998, the Minister sent to the Appellant by registered mail a notice of his decision. If that is what happened then this appeal, which was instituted by the filing of a Notice of Appeal on December 21, 2001, must be dismissed because it was instituted after the expiry of the 90-day period laid down by s. 306 of the Act. The Respondent moved for dismissal on that ground.
[3] The Appellant has brought a cross-motion for summary judgment allowing the appeal and for a declaration that the Minister's Notice of Decision was not mailed to the Appellant as required by the Act, s. 301(5), and is therefore a nullity.
[4] In support of the Appellant's cross-motion, there was filed the affidavit of the Appellant, sworn April 29, 2002. At page 2, paragraph 4 he states:
"On or about May 4, 2001, I was informed by a Collections Officer of Canada Customs and Revenue Agency that I was liable, as a Director of the Business, for unremitted GST. This was the first time I became aware that my Notice of Objection had purportedly been considered or disallowed. At no time did I receive a Notice of Decision in respect of my Notice of Objection."
This evidence was not shaken on cross-examination.
[5] Based on this evidence, the Appellant argues that the onus is on the Respondent to establish that the Notice of the Minister's decision was sent as required by ss. 301(5) of the Act. The Appellant relies on the decision of the Federal Court of Appeal in Aztec Industries Inc. v. the Queen, 95 DTC 5235. In that case the Court considered onus in relation to the requirement in ss. 152(2) of the Income Tax Act that the Minister send notice of an assessment to the taxpayer. The Court reasoned:
"Where as in the present case, a taxpayer alleges not only that he has not received the notice of assessment but that no such notice was ever issued, the burden of proving the existence of the notice and the date of its mailing must necessarily fall on the Minister; the facts are peculiarly within his knowledge and he alone controls the means of adducing evidence of them. A number of statutory provisions recognize the Minister's burden in this respect and are clearly designed to alleviate it."
The present situation is analogous in relation to the onus of establishing whether notice was sent in accordance with ss.301(5) of the Act.
[6] The Respondent filed the affidavit of Joe Poletto, an officer of the Canada Customs and Revenue Agency (the "Agency") in order to establish the sending of the Notice of Decision. The affidavit reads in part:
"...
5. In or around May 8, 1998, I prepared a Notice of Decision that was intended to respond to the Notice of Objection as filed by Mr. Kovacevic.
6. The Notice of Decision was addressed to Jozo Kovacevic at 561 Kevedon Mews, Mississauga, Ontario, L4Z 1G3.
7. The address of the Notice of Decision corresponded to the address provided on the Notice of Objection.
8. The Notice of Decision was approved by my Team Leader and submitted for signing by the Assistant Director of Appeals, Ken Fox.
9. The Notice of Decision was approved and signed by Mr. Fox on May 15, 1998. Attached and marked as Exhibit "C" to this my affidavit is a true copy of the Notice of Decision dated May 15, 1998.
10. It is the policy and practice of the Agency to then forward the Notice of Decision to a clerk who arranges for the Notice of Decision to be sent my (sic) registered mail. The method of delivery is indicated on the Notice of Decision by the typed word "registered" on the face of the Notice of Decision. Attached and marked as Exhibit "C" to this my affidavit is a true copy of the Notice of Decision dated May 15, 1998. The word "registered" is recorded in the top left corner.
11. It is the policy and practice of the Agency to indicate the date of mailing by registered mail by date stamping the Notice of Decision with the mailing date. The date stamp of this Notice of Decision indicates the date of mailing as May 15, 1998. Attached and marked as Exhibit "C" to this my affidavit is a true copy of the Notice of Decision dated May 15, 1998, showing the date stamp in the top, left corner.
..."
[7] Mr. Poletto was cross-examined on his affidavit by counsel for the Appellant. That cross-examination established that Mr. Poletto's actual knowledge of the Notice of Decision in this case ended when he put the document in his team leader's in-basket prior to receipt of the approval mentioned in paragraph 8 of the affidavit.
[8] Although Mr. Poletto does not suggest that he has direct personal knowledge with respect to subsequent events that is not in my opinion fatal to the Respondent's position. It is clear that Mr. Poletto is familiar with the policy and practice of the Agency. His evidence of the state of Agency records, in particular the date stamp on the Notice of Decision, establishes on the balance of probabilities the fact that the Notice of Decision was sent as required by the Act on May 15, 1998.
[9] In Schafer v. The Queen, [1998] G.S.T.C. 60, my colleague Bowman, J. (as he then was) noted:
"In a large organization, such as a government department, a law or accounting firm or a corporation, where many pieces of mail are sent out every day it is virtually impossible to find a witness who can swear that he or she put an envelope addressed to a particular person in the post office. The best that can be done is to set out in detail the procedures followed, such as addressing the envelopes, putting mail in them, taking them to the mail room and delivering the mail to the post office."
[10] The present case may usefully be compared with my decision in Mr. Kovacevic's income tax appeal. In that case, there was no evidence that the Notice of Assessment ever reached the mail room.
[11] It is not necessary to consider the question of whether the Appellant would have been entitled to summary judgment allowing the appeal if the Minister had failed to send the Notice of Decision to the Appellant. I will observe however in passing that in such a case the Appellant's remedy would have been to launch an appeal under s. 306 of the Act following expiry of the 180-day period.
[12] The Appellant, in paragraphs 14 and 15 of the written outline of argument, states:
14. By request dated September 20, 2001, the Appellant, pursuant to section 303 of the Excise Tax Act, sought an extension of the time to challenge the Assessment.
Reference: Notice of Appeal, GST Matter, paragraph 8.
15. By Notice of Decision dated November 22, 2001, the Respondent denied the Appellant's request for an extension of time, thus giving this court jurisdiction to consider whether a Notice of Determination was ever mailed by the Respondent to the Appellant in response to his Notice of Objection.
Reference: Notice of Appeal, GST Matter, paragraph 9.
There is confusion here. Section 303 of the Act has no bearing. The Minister considered the objection, confirmed the assessment and properly notified the Appellant pursuant to ss. 301(5). It is the appeal which is late. No proper application for extension of the time for appealing was made under s. 305 presumably because the one-year period in paragraph 305(5)(a) had expired long before September 20, 2001.
[13] An order will therefore be issued quashing the appeal with costs to the Respondent.
Signed at Ottawa, Canada, this 25th day of July 2002.
|
"Michael J. Bonner" |
T.C.J.
COURT FILE NO.: 2001-4579(GST)G
STYLE OF CAUSE: Jozo (Joe) Kovacevic and H.M.Q.
PLACE OF HEARING: Toronto, Ontario
DATE OF HEARING: May 8, 2002
REASONS FOR JUDGMENT BY: The Honourable Judge Michael J. Bonner
DATE OF JUDGMENT: July 25, 2002
APPEARANCES:
Counsel for the Appellant: Howard Winkler
Counsel for the Respondent: Brent Cuddy
COUNSEL OF RECORD:
For the Appellant:
Name: Howard Winkler
Gowling, Lafleur, Henderson
Firm:
For the Respondent: Morris Rosenberg
Deputy Attorney General of Canada
Ottawa, Canada
2001-4579(GST)G
BETWEEN:
JOZO (JOE) KOVACEVIC,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Motion heard on May 8, 2002 at Toronto, Ontario by
the Honourable Judge Michael J. Bonner
Appearances
Counsel for the Appellant: Howard Winkler
Counsel for the Respondent: Brent Cuddy
ORDER
Upon application by the Respondent for an Order;
a) Dismissing the Appeal pursuant to paragraph 58(3)(b) of the Tax Court of Canada Rules (General Procedure)(the "Rules");
b) Dismissing the Application for an Extension of Time in which to file a Notice of Objection;
and for ancillary relief;
And upon application by the Appellant for summary judgment allowing the appeal of the Appellant and for a declaration that the Notice of Decision in this matter was not mailed to the Appellant as required by the Excise Tax Act and as such the Notice of Decision is a nullity and for ancillary relief;
And upon reading the affidavits of the Appellant and of Joe Poletto filed and hearing counsel for the parties;
And no application to extend time having been made;
It is ordered that:
1. The application of the Appellant is dismissed.
2. The application of the Respondent is allowed and the appeal is quashed.
3. The Respondent shall have her costs of the appeal including both motions.
Signed at Ottawa, Canada, this 25th day of July 2002.
|
"Michael J. Bonner" |
T.C.J