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Docket: 2004-1681(IT)APP |
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BETWEEN: |
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ROBERT HOULE, |
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Applicant, |
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and |
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HER MAJESTY THE QUEEN, |
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Respondent. |
[OFFICIAL ENGLISH TRANSLATION]
____________________________________________________________________
Application heard on August 23, 2004, at Montréal, Quebec.
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Before: The Honourable Justice Paul Bédard |
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Appearances: |
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Counsel for the Applicant: |
Yolaine Lindsay |
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Agent for the Respondent: |
Soleil Tremblay (Articling Student) Agathe Cavanagh (Observer) |
ORDER
Considering the application to obtain an order for an extension of the time in which a notice of objection to the assessments made under the Income Tax Act for the 1999 and 2000 taxation years can be served;
And considering the parties' allegations;
The application for the 1999 and 2000 taxation years is dismissed based on the attached Reasons for Order.
Signed at Ottawa, Canada, this 29th day of October 2004.
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"Paul Bédard" |
Bédard J.
Translation certified true
on this 19th day of January 2005.
Julie Oliveira, Translator
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Citation: 2004TCC652 |
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Date: 20041029 |
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Docket: 2004-1681(IT)APP |
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BETWEEN: |
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ROBERT HOULE, |
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Applicant, |
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and |
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HER MAJESTY THE QUEEN, |
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Respondent. |
[OFFICIAL ENGLISH TRANSLATION]
REASONS FOR ORDER
Bédard J.
[1] This involves an application made under section 166.2 of the Income Tax Act (the "Act") to obtain an order for an extension of the time in which the Applicant can serve a notice of objection to the assessments of March 27, 2003, for the 1999 and 2000 taxation years. The Court must determine whether the Applicant's request for an extension of the time to object to the assessments is well founded.
Facts
[2] On October 16, 2002, the Applicant received a letter from Lucie Gervais (Exhibit I-1) from the Canada Customs and Revenue Agency ("the Agency") indicating that the Applicant would be subject to a more comprehensive audit of his tax returns for the 1999 and 2000 taxation years.
[3] After verifying the documentary evidence submitted by the Applicant, Ms. Gervais sent an assessment proposal dated January 7, 2003, (Exhibit I-1) to him. This assessment proposal gave the Applicant until February 7, 2003, to respond.
[4] On February 12, 2003, Ms. Gervais sent the Applicant a letter (Exhibit I-1) which set out the changes that the Agency made to the Applicant's tax returns for the taxation years in question. This letter also indicated that the Applicant would soon receive notices of reassessment reflecting these changes.
[5] On March 27, 2003, the Minister of National Revenue (the "Minister") issued the notices of reassessment for the taxation years in question.
[6] The Applicant did not object to the assessments of March 27, 2003, in the time limit prescribed in subsection 165(1) of the Act and which expired on June 25, 2003.
[7] On November 11, 2003, Chantal Amiot, a tax expert and Agent for the Applicant, sent the Minister an application for an extension of the time to object to the assessments of March 27, 2003, (Exhibit R-2) attached to the notices of objection. Ms. Amiot stated the following facts and reasons in her request:
· Mr. Houle has been our client since 2002;
· He received a letter from CCRA in January 2003 regarding his 1999 and 2000 returns;
· Disagreeing with CCRA's corrections, he discussed this with his financial advisor at the time and his advisor suggested that he object to this decision;
· He believes he submitted his assessment notices to the advisor or to one of his representatives with the mandate to prepare an objection;
· When filing his 2002 taxes, he realized that the Department asked him to pay his taxes for 1999 and 2000;
· On several occasions, Mr. Houle asked his advisor at the time what was going on. The advisor explained to Mr. Houle that Collections and Appeals were distinct departments and that this type of situation was normal;
· In October 2003, the client received the formal request for payment addressed to his employer and understood that someone had not done their job;
· I discussed this with Mr. Houle and contacted the Department and realized that the objection had never been filed;
· The client did not have the notices of reassessment on hand because he believed he had given them to his financial advisor;
· We asked for these notices;
· [We] ask you not to harm the taxpayer and to allow him to defend his tax case properly;
· We are aware that the taxpayer should know the law, but the major error that he committed was to go to an investment advisor rather than a tax professional.
[8] In a letter dated January 19, 2004, (Exhibit R-4), the Minister notified the Applicant about his refusal to grant him an extension of the time in which to serve his objection to the assessments of March 27, 2003.
[9] On April 16, 2004, the Applicant's counsel filed with the Court an application for an extension of the time in which to serve an objection to the assessments of March 27, 2003.
[10] In her application for an extension of time of April 16, 2004, the Applicant's counsel mainly alleged:
(i) that the Applicant had entrusted to his financial advisor the mandate of objecting to the assessments;
(ii) that the Applicant did not notice his financial advisor's failure to do so until October 28, 2003;
(iii) that it was impossible for the Applicant to personally act in this matter because he believed that his agent had carried out his mandate, and that the Applicant should not suffer harm because of this.
Preliminary remarks
[11] It is noteworthy that at the opening of the hearing, the Applicant's counsel amended her application for an extension of time to now allege that that the envelope in which the notices of assessment of March 27, 2003, were sent were postmarked by Canada Post on September 29, 2003. The Applicant therefore received these notices toward the end of September 2003, and Rock Robert Bilodeau, the Applicant's financial advisor, knew about these notices at the beginning of October 2003, and, consequently, the Applicant was unable to act or have someone else act on his behalf before the end of September 2003. The Applicant's counsel explained to the Court that Mr. Bilodeau had just given her the envelope (Exhibit R-1) in which the notices of assessment were sent, and pointed out to her the postmark on this envelope, which, according to the counsel, showed that the envelope was mailed on September 29, 2003.
Analysis
[12] In his testimony, Mr. Bilodeau explained:
[Translation]
(i) that in December 2002, the Applicant retained his services as financial advisor;
(ii) that in January 2003, the Applicant consulted with him regarding the assessment proposals of January 7, 2003, (Exhibit I-1), and that he thus advised him to object to the assessments when they were completed. He also explained to the Applicant that a taxpayer cannot object to an assessment proposal and that the Applicant therefore could not do anything if the assessments had not been issued;
(iii) that the Applicant thereafter regularly called him to discuss this problem and that his response was always the same-he had to wait for the assessment notices;
(iv) that toward the end of September or beginning of October 2003, the Applicant called him to say that he had received a letter from the Agency;
(v) that one of his employees went to the Applicant's home to get the envelope and assessment notices dated March 27, 2003;
(vi) that between October 8 and 15, 2003, he noted that the envelope contained the assessment notices dated March 27, 2003;
(vii) that he entrusted an employee of Gaétan Fradette, an accountant with whom he worked closely, with preparing the notices of objection on the Applicant's behalf;
(viii) that the Applicant's salary was seized by the Agency toward the end of October or beginning of November 2003, and that Mr. Bilodeau entrusted Chantal Amiot, a tax expert employed by Mr. Fradette, with dealing with the problem of the Applicant's salary being seized;
(ix) that while he was in Europe, Ms. Amiot met with the Applicant and contacted the Agency to find out why the Applicant's salary had been seized. According to Mr. Bilodeau, Ms. Amiot allegedly found out from the Agency that the notices of objection to the assessments of March 27, 2003, had not been served;
(x) that he was in Europe and that Ms. Amiot did not have the envelope in which the assessment notices of
March 27, 2003, had been sent when she prepared and sent the Minister the application for extension of time and that he was thus unable to rectify the facts alleged by Ms. Amiot in the application;
(xi) that in December 2003, he had a copy of the famous envelope (Exhibit R-5) faxed to Diane Charette at the Agency to try to show that it had been mailed on September 29, 2003, that the Applicant had the time to object and that the seizure of the Applicant's salary therefore had to be stopped. He testified that his efforts to convince Ms. Charette were unsuccessful.
[13] Essentially, the Applicant testified that he received the assessment notices at the end of September 2003, that he did not understand what the documents were about and that he had them sent to Mr. Bilodeau for him to do whatever was necessary.
[14] In her submission, the Applicant's counsel argued:
(i) that the envelope in which the assessment notices of March 27, 2003, were sent was postmarked September 29, 2003;
(ii) that I should retain the Applicant's and Mr. Bilodeau's uncontradicted testimonies according to which they did not become aware of these assessment notices before the end of September 2003, and that the Applicant was thus unable to act before the end of September 2003;
(iii) that given the circumstances of the case, it would be fair and equitable to grant the request.
[15] First, after a meticulous review of Exhibit R-1, I find that the envelope that contained the assessment notice of March 27, 2003, was postmarked
April 29, 2003, the same date that the Agency had stamped (in red) on this envelope. In fact, the Roman numeral that appears on the Canada Post postmark (in black) and which indicates the month that the Agency had mailed the envelope is, in my opinion, a IV and not a IX as the Applicant's counsel claimed.
[16] Given that the Applicant testified that he received the assessment notices toward the end of September 2003 and that he gave them to Mr. Bilodeau in October 2003, and given that Mr. Bilodeau testified that he saw these documents in October 2003 and that he entrusted Ms. Amiot with producing the notices of objection to these assessments and to deal with the problem of the salary being seized, how is it that Ms. Amiot did not allege these facts, which are crucial to the case, in her application for extension of time (Exhibit R-2) dated November 11, 2003. And how is it that the Applicant's counsel did not allege these same facts in her application for extension of time dated April 16, 2004? It must be pointed out that Ms. Amiot and the Applicant's counsel instead simply alleged Mr. Bilodeau's error in their respective applications for an extension of time. How is it that the Applicant's counsel was not informed of the above-mentioned facts until the very morning of the hearing?
[17] Why did the Applicant fail to inform Ms. Amiot that he had received the assessment notices at the end of September 2003? It should be pointed out that Mr. Bilodeau testified that Ms. Amiot had prepared the application for extension of time based on the information sent by the Applicant. The Applicant testified that he had not understood anything in the documents that he received at the end of September 2003 and that he sent them to Mr. Bilodeau for him to do whatever was necessary. However, I strongly doubt that when the Applicant met with Ms. Amiot or talked to her, that at that point he still did not know the nature of these documents that he received at the end of September 2003. That would imply that he did not ask Mr. Bilodeau what the nature of the documents was and what the consequences were. That appears unbelievable and improbable. The fact that he did not inform his counsel that he had not received the assessment notices until the end of September 2003 remains unexplained and unexplainable.
[18] How is it that Mr. Bilodeau, who was the Applicant's primary agent and who himself chose the professionals in the Applicant's tax case, did not inform Ms. Amiot and the Applicant's counsel about the fact that the assessment notices had been received at the end of September 2003? How is it that he did not inform the Applicant's counsel until the very morning of the hearing? His testimony in this regard appears decisive and should be cited:
[Translation]
R. As I said, I received the assessment notice between the 8th and 15th of October, sometime toward the end of October, beginning of November. Mr. Houle's salary was seized, then the taxes from 2003 were also retained as payment on account. But as we could not object, we did not have the assessment on hand, on what basis could I object? Except that the assessment was in transit. Ms. Amyot [sic], she, she says that someone did not do their job, but Ms. Amyot [sic], even with her work at Mr. Fradette's office, she, she is a tax expert, she acted on what Mr. Houle told her, but she did not have the physical file that I have here in my hands because once Mr. Fradette finishes my files, he brings them to me. So, the famous copy of the envelope, she did not see it. She, she wrote a note based on what Mr., when I told Robert, I said, so, you have a notice of seizure. I said I'm going to send you to see Chantal. I said, so I said, with a seizure occurring and no opposition made, something has to be done. So she wrote a letter. I left for Europe, I came back, I saw the letter. It had already been sent so I couldn't say, so listen, that's not what happened, here are the facts. I even sent a copy of the envelopes that were sent to you to a lady at the Department named Diane Charette in December.
Q. So show me what you sent, Mr. Bilodeau.
R. I have the acknowledgement of receipt of the fax, what is not underneath that is the copy, the photocopy.
Q. That is the photocopy. I do not have any copies, that is directly from the file, but...
R. The acknowledgement of receipt of the fax with the date, attached to the famous envelope that you have there.
Q. Fine, if you will allow me, Your Honour, evidence of transmission by fax on December 18, 2003, Exhibit R-5. And then, you send Ms. Charette a copy of the envelope with the postmark?
R. The envelope, yes, with the two seals to show, look, why are we wasting our time arguing? Stop seizing my client's salary. We objected and then got the envelope with that date, so it was still within the time limit. But nothing could be done.
[19] According to Mr. Bilodeau's testimony, he knew at the time that the assessment notices had been postmarked September 29, 2003. His contacting Ms. Charette at the Agency on December 18, 2003, undeniably proves that. He testified that he had not brought Ms. Amiot up to date before she sent out the application for extension of time dated November 11, 2003, because at that time he was in Europe and he did not send her the famous envelope. In this regard, I have to point out that it would have been very interesting to hear Ms. Amiot give her own version of the facts. Assuming that what Mr. Bilodeau said to explain the fact that he did not inform Ms. Amiot is true, which I doubt, the fact remains that Mr. Bilodeau did not inform the Applicant's counsel until the very morning of the hearing still remains unexplained and unexplainable. Was he still in Europe? Who, then, met with the Applicant's counsel when she prepared the application for extension of time?
[20] Given the evidence submitted, I find that the assessment notices of March 27, 2003, were mailed on April 29, 2003, that the testimony of the Applicant and of Mr. Bilodeau who tried to show that the assessment notices had been mailed on September 29, 2003, and received by the Applicant toward the end of that month, is simply unlikely and unbelievable and that the Applicant therefore did not show that within the time limit specified to serve the Minister his objection to the assessments, he was unable to act or have someone act on his behalf, in accordance with the requirements of sub-paragraph 166.2(5)(b)(i) of the Act.
[21] The application for the 1999 and 2000 taxation years is therefore dismissed.
Signed at Ottawa, Canada, this 29th day of October 2004.
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"Paul Bédard" |
Bédard J.
Translation certified true
on this 19th day of January 2005.
Julie Oliveira, Translator
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CITATION: |
2004TCC652 |
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COURT FILE NO.: |
2004-1681(IT)APP |
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STYLE OF CAUSE: |
Robert Houle and Her Majesty the Queen |
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PLACE OF HEARING: |
Montréal, Quebec |
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DATE OF HEARING: |
August 23, 2004 |
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REASONS FOR ORDER BY: |
The Honourable Justice Paul Bédard |
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DATE OF ORDER: |
October 29, 2004 |
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APPEARANCES: |
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For the Applicant: |
Yolaine Lindsay |
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For the Respondent: |
Soleil Tremblay (Articling Student) Agathe Cavanagh (Observer) |
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COUNSEL OF RECORD: |
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For the Applicant: |
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Name: |
Yolaine Lindsay |
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Firm: |
Lindsay Lévesque Saint-Hyacinthe, Quebec |
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For the Respondent: |
Morris Rosenberg Deputy Attorney General of Canada Ottawa, Canada |