Date: 20001027
Dockets: 97-440-IT-G,
97-462-IT-I
BETWEEN:
SIXGRAPH INFORMATIQUE LTÉE,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Reasonsfor Order
(Delivered orally from the bench on September 26, 2000, at Montréal, Quebec, and amended at Ottawa, Ontario, on October 27, 2000.)
Lamarre, J.T.C.C.
[1] The motion dated April 7, 2000, brought by the appellant for the withdrawal of the discontinuances filed with this Court on April 14, 1997 by the solicitors who were representing it at the time, and for the disavowal of those same solicitors is dismissed. The chronology of the facts may be summarized as follows.
1. On January 3, 1995, Revenue Canada Taxation received from the appellant notices of objection dated December 20, 1994 and signed by lawyer Sylvain Castonguay as the appellant's authorized agent, for its 1991 and 1992 taxation years.
Exhibits A and B accompanying Josée Rodrigue's affidavit.
2. On January 16, 1995, Revenue Canada Taxation received from the appellant a notice of objection dated December 20, 1994 and signed by Sylvain Castonguay as its authorized agent, for its 1993 taxation year.
Exhibit C accompanying Josée Rodrigue's affidavit.
3. By letter dated October 9, 1996, Sylvain Castonguay informed Revenue Canada Taxation that [TRANSLATION] "pursuant to a decision by the [appellant's] board of directors", the reassessments for the 1991, 1992 and 1993 taxation years were no longer being contested and that he was withdrawing the notices of objection filed on the appellant's behalf.
4. On November 15, 1996, Revenue Canada Taxation informed the appellant and Sylvain Castonguay that the appellant's assessments for its 1991, 1992 and 1993 taxation years were thus confirmed.
Exhibits E and F accompanying Josée Rodrigue's affidavit.
5. On February 13, 1997, James Bonhomme, as counsel for the appellant, filed notices of appeal with this Court for the appellant's 1991, 1992 and 1993 taxation years (97-440(IT)G and 97-462(IT)I).
6. On April 10, 1997, the respondent filed and served on counsel for the appellant notices of motion for the dismissal of appeals 97-440(IT)G and 97-462(IT)I under subsection 169(2.2) of the Income Tax Act.
7. On April 14, 1997, the appellant, through its counsel, James Bonhomme, filed notices of discontinuance with this Court.
8. In its motion, the appellant contends that its new counsel did not become aware of these discontinuances until August 4, 1999, and that at no time had its directors authorized or been informed of them.
[2] The evidence I heard did not convince me that lawyers Sylvain Castonguay and James Bonhomme—both of whom represented the appellant, Mr. Castonguay at the time of the withdrawal of the objections filed for the appellant with Revenue Canada Taxation and Mr. Bonhomme when the Notices of Appeal which he had filed with this Court on behalf of the appellant were withdrawn—acted in violation of their mandate.
[3] In her affidavit, Ms. Anh Huyen Nguyen stated that at no time as a director of the appellant had she authorized or been informed of the aforementioned discontinuances. However, Ms. Anh Huyen Nguyen, who said she had been the president of the appellant since May 1996, did not deny the fact, stated by Mr. Castonguay in his testimony, that Mr. Castonguay did meet with her at her office in October 1996. He said he had advised her at that time that, for lack of documentation, he thought the appellant should withdraw its objections. According to Mr. Castonguay, Ms. Anh Huyen Nguyen had agreed and he informed the Minister on October 9, 1996 that he was withdrawing the objections filed for the appellant with respect to the 1991, 1992 and 1993 taxation years.
[4] As a result of those discontinuances, the Chief of Appeals at Revenue Canada sent the appellant, at the address appearing in the file (which was apparently confirmed by Ms. Anh Huyen Nguyen in cross-examination on her affidavit), a notice dated November 15, 1996 confirming the assessments for the 1991, 1992 and 1993 taxation years. Ms. Nguyen stated in that cross-examination that she had never received the aforementioned confirmation from the Minister. Even if that is the case, she was nevertheless aware of Mr. Castonguay's intention to file a discontinuance. If she was no longer of the same opinion as her counsel, she had a duty to prosecute her case more diligently. The appellant waited three years (after the filing of the withdrawal of the notices of appeal that had been filed with this Court) before reacting. That is too long and clearly shows a lack of diligence.
[5] Moreover, by withdrawing its objections, the appellant could no longer institute an appeal before this Court under subsections 169(1) and (2.2) of the Income Tax Act. The Notices of Appeal filed by Mr. Bonhomme for the same taxation years were accordingly invalid.
[6] I entirely concur in the reasons stated by the respondent in paragraphs 25, 26, 29, 31 and 33 of her written argument, which read as follows:
[TRANSLATION]
25. The respondent argues that, if this Court were to conclude that it had jurisdiction to disavow the acts of the appellant's former solicitors and to set aside the discontinuances filed by them, that would be an exceptional measure taken out of a concern for the proper administration of justice and the finality of the dismissal of an appeal.
Moutisheva v. Canada (M.E.I.) (1993), 24
Imm. L.R. (2d) 212 (F.C.A.) - leave
to appeal to the S.C.C. denied, p. 218;
Laskaris v. M.N.R., 90 DTC 1364 (T.C.C.,
Judge Sarchuk);
Tibbits v. M.N.R., 96 DTC 1199 (T.C.C.,
Judge Sarchuk);
Saywack v. M.E.I., [1986] 3 F.C. 189 (F.C.A.);
Anglo-Marine Inc. v. 2963-5976 Québec
Inc. (1995), 89 F.T.R. 207 (F.C.T.D.).
26. In the absence of fraud, the conduct of a party to an action includes that of his counsel and a party to the action must itself show diligence and be reasonably active in prosecuting its appeal.
Moutisheva v. Canada (M.E.I.) (1993), 24
Imm. L.R. (2d) 212 (F.C.A.) - leave
to appeal to the S.C.C. denied, pp. 217-218;
Bogie v. The Queen, [1998] 4 CTC 195 (F.C.A.);
Saywack v. M.E.I., [1986] 3 F.C. 189 (F.C.A.);
2855-6330 Québec Inc. v. The Queen, [1998]
T.C.J. No. 1030 (T.C.C. - Judge Lamarre Proulx),
confirmed by [1999] F.C.J. No. 1786 (F.C.A.);
120112 Canada Ltée c. Québec (S.M.R.),
[1997] CarswellQue 1683 (C.Q. - j. St-Hilaire).
29. In addition, Ms. Anh Huyen Nguyen stated that she did not approach her legal representatives to verify what was happening with the objections made by the appellant concerning the 1991, 1992 and 1993 taxation years.
Cross-examination on Ms. Anh Huyen Nguyen's
affidavit, pp. 31, 32, 35, 73 and 74.
31. And yet the appellant was informed in writing on November 15, 1996 that the appellant's assessments for its 1991, 1992 and 1993 taxation years had been confirmed.
Exhibit E accompanying Josée Rodrigue's affidavit.
33. Furthermore, and a fortiori, the appellant has failed to show that its former counsel had committed any fraud whatever against it in filing discontinuances with respect to both the appeals and the objections, and the burden of proving such fraud was on the appellant.
Moutisheva v. Canada (M.E.I.) (1993), 24
Imm. L.R. (2d) 212 (C.A.F.) - leave
to appeal to the S.C.C. denied;
2855-6330 Québec Inc. v. The Queen, [1998]
T.C.J. No. 1030 (T.C.C. - Judge Lamarre Proulx),
confirmed by [1999] T.C.J. No. 1786 (F.C.A.);
120112 Canada Ltée c. Québec (S.-M.R.),
[1997] CarswellQue 1683 (C.Q. - j. St-Hilaire);
Adas v. Canada, [2000] F.C.J. No. 330
(Prothonotary Morneau).
[7] I would add that, even if counsel for the appellant at the time may have committed an error, which I am not convinced was the case, the errors of counsel may not be dissociated from their client's negligence and carelessness in prosecuting the proceedings it had instituted. (See the recent Federal Court of Appeal decision in Donald Donovan v. The Queen, [2000] F.C.J. No. 933 (Q.L.)).
[8] In the circumstances, I cannot grant the appellant's motion in the two cases before me.
[9] The motion is dismissed with costs to the respondent.
Signed at Ottawa, Canada, this 27th day of October 2000.
"Lucie Lamarre"
J.T.C.C.
Translation certified true on this 12th day of December 2001.
[OFFICIAL ENGLISH TRANSLATION]
Erich Klein, Revisor