Tax Court of Canada Judgments

Date: 20000107

Dockets: 98-781-IT-G; 98-784-IT-G

BETWEEN:

LOUISA HO, WILLIAM HO,

Appellant,

and

HER MAJESTY THE QUEEN,

Respondent.

Reasons for Judgment

Sarchuk J.T.C.C.

[1] These are motions by the Respondent for an Order dismissing the appeals of Louisa Ho and William Ho, or in the alternative, for an Order providing for substituted service on each of the Appellants of Notices to Attend for Examinations for Discovery and an adjournment of the hearing of the appeals to 30 days after the Appellants complete the undertakings arising from such examinations. The motions were heard together on December 9, 1999. Neither Appellant appeared. At the conclusion of the hearing, I indicated that an Order dismissing the appeals would be granted and that written reasons therefor would follow.

[2] The Appellants were initially represented by Fraser Milner. Counsel withdrew as solicitors of record on March 11, 1999 and advised that the last known address for the Appellants was 30 Greenfield Avenue, Suite 1507, Toronto, Ontario. M2N 6N3. On April 8, 1999, a Notice of Status Hearing was forwarded to each of the Appellants by registered mail to their last known address. On May 13, 1999, the status hearings took place before the Honourable Judge Bowie of the Tax Court of Canada in Toronto, Ontario. William Ho attended and informed the Court that he was representing himself and his sister, Louisa. By Order dated May 17, 1999, the Court directed that the appeals of William Ho and Louisa Ho be heard together and further directed that each Appellant file and serve a list of documents by September 30, 1999. Oral examinations for discovery were to be completed by November 15, 1999; and undertakings arising from such examinations be satisfied by December 15, 1999. The Court records indicate that the respective Orders were sent by registered mail to each of the Appellants at their last known address on May 26, 1999. The records further indicate that the registered letters were not returned. To date, the Appellants have not complied with any of the directions made by the Court.

[3] On September 20, 1999, counsel for the Respondent, Christine Mohr (Mohr), caused a letter addressed to each of the Appellants to be sent to 30 Greenfield by regular mail. On September 29, 1999, these letters were returned to the Respondent marked "return to sender" and "moved". On October 13, 1999, Mohr instructed her assistant to contact the Department of National Revenue to obtain current addresses if available from its records for each of the Appellants. The address provided for William Ho was 519-4005 Bayview Avenue, and for Louisa Ho 907 B-195 St. Patrick Street, Toronto. On October 14, 1999, Mohr caused a letter to be sent to each of the Appellants to remind them that their lists of documents were due. In these letters she also requested that they contact her to schedule examinations for discovery and provide her with a current telephone number where they might be reached. Neither of these letters was returned to Mohr, nor has she been contacted by either of the Appellants or anyone on their behalf with respect to these appeals.

[4] On October 28 1999, at the Respondent's request a process server attempted to serve a Notice to Attend on Louisa Ho at 907B-195 St. Patrick Street. This attempt of service was unsuccessful.

[5] As a result of further information received by the process server, John Dunsford a further attempt at service of Louisa Ho was made by him on November 5, 1999 at suite 409A, 280 Simcoe Street, Toronto. A copy of the Notice to Attend was left with one Nelson Ho requiring the attendance of Louisa Ho for examination for discovery on November 9, 1999 at the offices of Atchison & Denman Court Reporters, Toronto. To the date of this motion, the Respondent has been unable to locate and to effect personal service of the Notice to Attend on Louisa Ho.

[6] An attempt was made by the process server, Paul Dunsford, to serve William Ho at 519-4005 Bayview, without success. Further inquires were made by the Respondent by way of a driver's licence search on William Ho, as a result of which Mohr requested that the process server attempt to serve William Ho at 55 Cheeseman Drive, Markham, Ontario. Mohr has been advised by the process server that he was unable to make personal service on William Ho at any of the addresses available.

[7] The issue before me is whether the appeals of William Ho and Louisa Ho should be dismissed on the basis that they failed to prosecute their appeals with due dispatch and for their failure to comply with the status hearing Orders of Bowie J. The following three provisions of the Tax Court of Canada Rules (General Procedure) permit this Court to dismiss an appeal:

64 The respondent if not in default under these rules or a judgment of the Court, may move to have an appeal dismissed for delay where the appellant has failed to prosecute the appeal with due dispatch.

91 Where a person or party who is required to make discovery of documents under sections 78 to 91 fails or refuses without reasonable excuse to make a list or affidavit of documents or to disclose a document in a list or affidavit of documents or to produce a document for inspection and copying, or to comply with a judgment of the Court in relation to the production or inspection of documents, the Court may,

...

(c) except where the failure or refusal is by a person who is not a party, dismiss the appeal or allow the appeal as the case may be,

...

125(1) Where an appeal has not been set down for hearing or terminated by any means within six months after filing the reply or after the last day for filing the reply, whichever is later, subject to any direction by the Chief Judge, the Registrar or a person designated by the Registrar, may serve on the Deputy Attorney General of Canada and on the counsel of record for the appellant or, where the appellant acts in person, on the appellant, a notice of status hearing at least 30 days before the date fixed for the hearing, and the hearing shall be held before a judge.

...

125(5) At the status hearing

(a) if a reply has been filed the appellant shall show cause why the appeal should not be dismissed for delay, and the judge may

(i) if satisfied that the appeal should proceed, set time periods for the completion of any remaining steps to set down the appeal for hearing and either fix the time and place of hearing or direct the Registrar to do so within a specified time and the judge may make a direction regarding the filing of the hearing record containing the documents described in subsection 124(1),

(ii) if not satisfied that the appeal should proceed, dismiss it for delay, or

(iii) give such other direction as is just;

...

125(7) Where a party fails to comply with an order or direction made under subsection (5), the Court may, on application or of its own motion, allow the appeal, dismiss the appeal or make such other order as is just.

[8] In addition to the affidavits filed, I reviewed the transcript with respect to the status hearings and believe the following facts are pertinent. The appeals were filed on February 6, 1998, and the Respondent's Reply was filed on June 4, 1998. No further action had been taken by the Appellants as of May 13, 1999, the date of the status hearing. Bowie J. carefully outlined the steps which the Appellants would have to take which included providing a list of documents and conducting examinations for discovery. To ensure that the Appellants were aware of their rights and obligations, Bowie J. made clear both the purpose and scope of the examinations for discovery and emphasized the various steps that would have to be completed on or before the dates set for that purpose. Although earlier trial dates were available, the appeals were scheduled to be heard on February 1 and 2, 2000 at the specific request of the Appellants.

[9] It is the Appellants' responsibility to prosecute their appeals without delay and with due diligence within the prescribed Rules. In determining whether an appeal should be dismissed, it is necessary to consider whether the taxpayer has made any attempt to comply with the Rules or an Order of the Court or has provided a reasonable excuse for non-compliance.[1] In this particular case, both Appellants were represented at the status hearing, were aware of and understood the directions made by the Court and I am satisfied, in each case received the Order of Bowie J. dated May 17, 1999. Since that time they have chosen to completely ignore the Order and their failure to comply with it constitutes a deliberate and inexcusable delay. The only logical inference to be drawn from the Appellants is that they have no intention whatsoever of prosecuting their appeals.

[10] Subsection 37(1) of the Rules provides that where it is impractical for any reason to effect service of a document to be served personally, the Court may make a direction for substituted service. Given the circumstances, I considered this alternative but concluded that it was not warranted. On the facts, it is safe to say that an Order for substituted service of a Notice to Attend on the Appellants by posting such notice in the Toronto Star newspaper or indeed, in any other newspaper, would be a waste of time.

[11] The appeals of the Appellants are dismissed, with costs to the Respondent.

Signed at Ottawa, Canada, this 7th day of January, 2000.

"A.A. Sarchuk"

J.T.C.C.

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