Date: 20020219
Docket: 2001-3019-IT-APP
BETWEEN:
ANDRÉ LAMOTHE,
Applicant,
and
HER MAJESTY THE QUEEN,
Respondent.
Reasons for Order
Lamarre Proulx, J.T.C.C.
[1] This is an application under section 167 of the Income Tax Act (the "Act") to extend the time within which the applicant may institute an appeal to this Court for the 1993, 1994, 1995 and 1996 taxation years.
[2] The application reads as follows:
[TRANSLATION]
. . .
1. I HEREBY apply for an order extending the time within which an appeal may be instituted from the decisions confirming the notices of assessment for the 1993, 1994, 1995 and 1996 taxation years;
2. I received notices of assessment for the 1993, 1994, 1995 and 1996 taxation years;
3. I objected to the said notices of assessment by notice of objection;
4. On May 5, 1999, the Director of Appeals sent me a notice confirming the assessment for 1995 and stating that the assessments for 1993, 1994 and 1996 would be varied and notices of reassessment implementing the Minister's decision would be sent, the whole as appears from the said notice, which is attached in support hereof and a copy of which was provided to the respondent as Exhibit R-1 at the time this application was served;
5. I do business with an accountant named Alain Deschênes, C.A., whom I have instructed to contest the decisions rendered;
6. Objections were completed, as appears in particular from the documents filed in support hereof, copies of which were provided to the respondent as Exhibit R-2 at the time this application was served;
7. This also appears in particular from a statement of account dated September 17, 1999, confirming that the amounts are disputed - that at least is what I understood from it - the whole as appears from the said document, a copy of which was provided to the respondent as Exhibit R-3 at the time this application was served;
8. On February 2, 2000, the respondent sent a notice concerning tax owed for 1993, 1994, 1995 and 1996, as appears from the said document, a copy of which was provided to the respondent as Exhibit R-4 at the time this application was served;
9. I checked once again with my agent, Alain Deschênes, C.A., to ensure that the notices of appeal from those decisions had been filed since I am contesting the said notices of assessment;
10. I always believed that the said notices of appeal had in fact been filed;
11. However, on March 19, 2001, a requirement to pay was sent by the respondent, as appears from the said document, a copy of which was provided to the respondent as Exhibit R-5 at the time this application was served;
12. That document was accompanied by a letter dated February 14, 2000, that was sent to the accountant, Alain Deschênes, stating that only 1995 had been the subject of a notice of appeal to the Tax Court of Canada, the whole as appears more fully from that letter, a copy of which was provided to the respondent as Exhibit R-5 at the time this application was served;
13. That notice stated that, as no action had been taken as of March 19, 2001, requirements to pay had been sent to the applicant's known financial institutions and clients;
14. I was subsequently informed of this situation;
15. I am extremely surprised and have suffered serious prejudice as a result of this situation since it has always been my intention to contest by notice of appeal not only the decision concerning 1995, but also the decision concerning 1993, 1994 and 1996;
16. I had moreover instructed my accountant to do so;
17. In the circumstances, I have a sound basis for respectfully applying for an extension of time for filing a notice of appeal regarding the assessments made for 1993, 1994 and 1996;
18. This application is well founded in fact and in law;
. . .
[3] Paragraphs 2 to 4 and paragraphs 8 and 11 were admitted by the respondent. The respondent admitted paragraph 6, except with regard to the year 1995.
[4] The facts on which the Minister of National Revenue (the "Minister") relies are described in paragraphs 14 to 20 of the Reply to the Application for an Extension of Time (the "Reply") as follows:
[TRANSLATION]
...
14. On June 29, 1998, the Minister of National Revenue (hereinafter the "Minister") sent the applicant notices of reassessment for the 1993, 1994, 1995 and 1996 taxation years.
15. On or around September 22, 1998, the applicant served notice on the Minister of his objection to the notices of reassessment dated June 29, 1998, for the 1993, 1994, 1995 and 1996 taxation years.
16. By registered mail dated May 5, 1999, the Minister informed the applicant that he had confirmed the reassessment dated June 29, 1998, for the 1995 taxation year and had that same day issued notices of reassessment for 1993, 1994 and 1996.
17. The applicant did not institute an appeal to the Tax Court of Canada, under subsection 169(1) of the Income Tax Act (hereinafter the "Act") within the prescribed time, which ended on August 3, 1999, respecting the reassessment dated June 29, 1998, for the 1995 taxation year, which had been confirmed on May 5, 1999.
18. On or around July 19, 1999, the applicant served notice on the Minister of his objection to the notices of reassessment dated May 5, 1999, for the 1993, 1994 and 1996 taxation years.
19. By registered mail dated August 25, 1999, the Minister informed the applicant that he was confirming the assessments dated May 5, 1999, for the 1993, 1994 and 1996 taxation years.
20. The applicant did not appeal to the Tax Court of Canada, under subsection 169(1) of the Income Tax Act (hereinafter the "Act") within the prescribed time, which ended on November 23, 1999, respecting the reassessments dated May 5, 1999, for the 1993, 1994 and 1996 taxation years, confirmed on August 25, 1999.
. . .
[5] The applicant testified. Notices of reassessment had been issued on June 29, 1998, for the years 1993 to 1996 (those notices were filed as Exhibit I-3 during the examination of the Minister's officer, Denis Blais). Subsequently, notices of objection had been duly served on the Minister.
[6] On May 5, 1999, the applicant received the Minister's decision. The assessment for 1995 was confirmed. Reassessments were issued for 1993, 1994 and 1996 (Exhibits R-1 and I-4). Notices of objection were served for 1996, 1994 and 1993 (Exhibit R-2).
[7] Exhibit R-3 is a statement of account dated September 17, 1999. It contains the inscription [Translation] "disputed amount" with respect to three amounts.
[8] On February 2, 2000, he received a letter from Revenue Canada claiming the tax owed. The letter informed him that no notice of appeal had been filed in respect of the assessments for 1993 to 1996. It noted that, with respect to the 1995 assessment, notice of confirmation had been sent on May 5, 1999, and that notices concerning 1993, 1994 and 1996 had been sent on August 25, 1999. The letter was filed as Exhibit R-4.
[9] Exhibit R-5 is a requirement to pay dated March 19, 2001.
[10] The applicant repeated several times that, the moment he received income tax documents, he took them to his accountant and asked him to take care of everything.
[11] The respondent's first witness was Alain Deschênes, the applicant's accountant. Mr. Deschênes, a chartered accountant, said the following concerning the years in question, at pages 32 and 33 of the transcript:
[TRANSLATION]
. . .
A. . . . I don't know the procedures for this, and I know nothing about it, in fact, it's not . . . it's not my . . . my responsibility.
Q. Was that, was that explained to Mr. Lamothe? And how so?
A. I can't tell you that we had . . . I don't remember discussing that since prior to this, we had a case regarding previous years and exactly the same thing had occurred - we had to prepare notices of objection regarding decisions that had been rendered; Mr. Lamothe decided to appeal from them, and he hired a tax lawyer to appeal from those decisions.
Q. So you weren't the one who prepared the notices of appeal for the previous years?
A. Not the notices of appeal. The notices of objection, yes, but not the appeals.
Q. To your recollection, according to your recollection since it took place in 1999, what words did Mr. Lamothe use, or what exactly did he ask you to do at the outset when he asked you to object? What did he tell you?
A. Well, in fact, he naturally wanted to justify that it wasn't right, in fact, to tax additional amounts; I think his intention was actually to take the same steps as in the years 87 to 90, for which he is already appealing the decision, but perhaps we . . . there may have been a misunderstanding on the procedures to follow on my end for the notices of objection and concerning the lawyer for the subsequent appeal if there were still amounts to claim.
Q. What do you mean the same proceeding that had taken place?
A. For the previous years in fact, which are also under appeal.
[12] The accountant explained that he had taken care of the notices of objection but not the notices of appeal since that was not part of his work but the work of a lawyer, and that the applicant had to know this since he had used the services of a lawyer in the past for appeals concerning previous years.
[13] Counsel for the respondent showed him a photocopy of a fax sent to him by Denis Blais, an Appeals Division officer, on February 14, 2000, informing the accountant that the reassessments of André Lamothe for 1993, 1994 and 1996 had been confirmed on August 25, 1999, and that Mr. Lamothe had had until November 23, 1999, to file a notice of appeal with the Tax Court of Canada. It also stated that nevertheless, Mr. Deschênes' client could still file an application for an extension of the time within which to file a notice of appeal with the Tax Court of Canada. That copy was filed as Exhibit I-2. The accountant said that he did not remember discussing the possibility of instituting an appeal.
[14] The accountant could not have been any more specific when questioned by counsel for the applicant. He did not admit that he had been instructed to file notices of appeal. In his view, that task was the responsibility of counsel for the applicant.
[15] The respondent's second witness was Denis Blais, an investigator with the Canada Customs and Revenue Agency. He explained that the notice of confirmation sent for 1995 and those relating to 1993, 1994 and 1996 were sent to the applicant and his agent, Mr. Deschênes. They are Exhibits I-4 and I-1.
[16] Exhibit I-4 consists of a letter dated May 5, 1999, signed by the Director of Appeals, concerning the notices of objection for the 1993 to 1996 taxation years. Attached to that letter are the confirmation for 1995 and the reassessments for 1993, 1994 and 1996. It clearly states that the assessment for 1995 is confirmed and that those for 1993, 1994 and 1996 will be reassessments. The addressees are the applicant and his accountant. Exhibit I-5 shows that the letter was sent to those persons by registered mail.
[17] Exhibit I-1, dated August 25, 1999, is the Minister's notice of confirmation concerning the 1993, 1994 and 1996 taxation years. The addressees are again the same two persons. Exhibit I-7 indicates that the letter was sent to the applicant by registered mail.
[18] In both cases, there is a paragraph stating that, if the person does not agree with the decision, he may institute an appeal to the Court and that enclosed is the information he will need on how to proceed.
Arguments
[19] Counsel for the applicant argued that the applicant had relied on his accountant. Counsel referred to a decision by Judge Tremblay of this Court in Dufour v. M.N.R., 90 DTC 1238 and quoted the headnote, which states:
. . . there was no reason that the taxpayer should have to suffer the results of the obvious error made by the firm of accountants on which he had relied, particularly when he had prima facie grounds for an appeal, and when such prompt action was taken to rectify that error, once it had been discovered.
[20] Counsel for the respondent argued that, for 1995 as well as for 1993, 1994 and 1996, the applicant had exceeded the strict time limit imposed by subsection 167(5) of the Act for filing an application for an extension of time to appeal. The application had to be made within one year after the expiration of the time limited by section 169 for appealing. For 1995, Mr. Lamothe had until August 2, 2000, and for the 1993, 1994 and 1996 taxation years, the time limit expired on November 22, 2000. The application for extension was filed on June 11, 2001.
[21] Counsel for the respondent referred to the decision by the Federal Court of Appeal in Minuteman Press of Canada Company Limited v. M.N.R., 88 DTC 6278, which was dated May 4, 1988. That court held that, once it has been determined that no application was made for an extension of time to appeal within the time limit, the question of whether or not it would be just and equitable to grant an extension of time does not arise.
|
. . . Once it has been determined that no application was made for an extension of time to appeal within the one year limit, the question of whether or not it would be just and equitable to grant an extension of time to appeal does not arise. |
[TRANSLATION]
. . . Dès lors qu'il a été statué qu'aucune demande de prorogation de délai n'a été présentée, la question de savoir s'il serait juste et équitable d'accorder une prorogation ne se pose pas. En conséquence, nous estimons qu'il a à bon droit rejeté la demande de la requérante conformément à l'article 167 de la Loi de l'impôt sur le revenu. . . . |
[22] Counsel for the respondent referred to similar decisions of this Court by Judge Rip in Shéridan v. Canada, [2001] T.C.J. No. 83 (Q.L.), and by Judge Tremblay in Bertrand v. Canada, [1995] T.C.J. No. 768 (Q.L.).
[23] While noting that the issue of whether the accountant had been negligent was not relevant in this case since the time limit had expired, counsel for the respondent nevertheless referred to several decisions on that point including a decision by the Federal Court of Appeal in Zamko v. Canada, [1996] F.C.J. No. 1363 (Q.L.), and the decision by this Court in Zamko v. Canada, [1995] T.C.J. No. 1771 (Q.L.), according to which the onus is on the taxpayer to take due care in conducting his affairs.
[24] As to the decision in Dufour, supra, cited by counsel for the applicant, counsel for the respondent argued that in that case the application for an extension of the time to appeal had been made within the time limit.
Conclusion
[25] Subsections 167(1) and (5) of the Act read as follows:
167(1) Extension of time to appeal - Where an appeal to the Tax Court of Canada has not been instituted by a taxpayer under section 169 within the time limited by that section for doing so, the taxpayer may make an application to the Court for an order extending the time within which the appeal may be instituted and the Court may make an order extending the time for appealing and may impose such terms as it deems just.
167(5) When order to be made - No order shall be made under this section unless
(a) the application is made within one year after the expiration of the time limited by section 169 for appealing; and
(b) the taxpayer demonstrates that
(i) within the time otherwise limited by section 169 for appealing the taxpayer
(A) was unable to act or to instruct another to act in the taxpayer's name, or
(B) had a bona fide intention to appeal,
(ii) given the reasons set out in the application and the circumstances of the case, it would be just and equitable to grant the application,
(iii) the application was made as soon as circumstances permitted, and
(iv) there are reasonable grounds for the appeal.
[26] I do not have to determine whether the accountant or the applicant was negligent in the circumstances of the instant case. These are not relevant factors. I described the evidence that was presented since it had been presented. However, as the Federal Court of Appeal held in Minuteman Press of Canada Company Limited, supra, once it has been determined that no application was made for an extension within one year after the expiration of the time limited by section 169, the question of whether or not it would be just and equitable to grant an extension of time does not arise.
[27] On the one hand, the notices of confirmation for the taxation years in issue were sent in accordance with the Act and were received by the applicant. On the other hand, the applications for an extension of time for each of those years were filed after the one-year time limit provided for in paragraph 167(5)(a) of the Act. The Court does not have the discretion to extend that time, which is a strict time limit. The only discretion it has is to extend the 90-day period provided for in subsection 169(1) of the Act, which is not the time limit at issue here.
[28] The application is accordingly dismissed.
Signed at Ottawa, Canada, this 19th day of February 2002.
|
"Louise Lamarre Proulx" |
J.T.C.C.
[OFFICIAL ENGLISH TRANSLATION]
APPLICATION UNDER SECTION 167 OF THE
INCOME TAX ACT (APPEAL)
2001-3019(IT)APP
BETWEEN:
ANDRÉ LAMOTHE,
Applicant,
and
HER MAJESTY THE QUEEN,
Respondent.
Application heard on November 29, 2001, at Québec, Quebec, by
the Honourable Judge Louise Lamarre Proulx
Appearances
Counsel for the Applicant: Marc Bouchard
Counsel for the Respondent: Dany Leduc
ORDER
The application for an order extending the time within which an appeal from the assessments made under the Income Tax Act for the 1993 to 1996 taxation years may be instituted is dismissed in accordance with the attached Reasons for Order.
Signed at Ottawa, Canada, this 19th day of February 2002.
|
"Louise Lamarre Proulx" |
J.T.C.C.
[OFFICIAL ENGLISH TRANSLATION]