Citation: 2006TCC675
Date: 20061208
BETWEEN:
and
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Motions heard on December 6, 2006 at Vancouver, British Columbia
By: The Honourable Justice D.W. Beaubier
Appearances:
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REASONS FOR ORDERS ANDORDERS
Beaubier, J.
[1] These two motions were heard together by consent of counsel at Vancouver, British Columbia on December 6, 2006. They are:
1. Appellant's motion filed January 30, 2006 for Judgment pursuant to his Notice of Appeal filed in Court August 25, 2004 on the ground that the Respondent's Reply was not filed by November 22, 2004 and has not since been filed.
2. Respondent's Motion filed February 27, 2006 pursuant to Rule 9 that this Court extend the time to file its Reply until 30 days after the date of decision in the motion.
[2] These motions were heard following this Court's decision on December 5, 2006 that dismissed the Respondent's motion to dismiss or quash the Appellant's Notice of Appeal on the basis that he did not file a timely Notice of Objection to a Notice of Reassessment dated May 13, 2002.
[3] The time line of the numerous proceedings by the parties in this appeal is fundamental to these motions and any decision on them. It follows:
13 May, 2002 - Respondent prints a Notice of Reassessment of the Appellant for 1998 and purports to "send" it to him by registered mail. He never receives this mail and the mailed envelope is returned to the Respondent on or about May 28, 2002. Pursuant to Canada Revenue Agency policy, the returned envelope and its contents are destroyed.
2003- Appellant commences an action in the Federal Court for a declaration that no tax is owing by him and to bar collection action.
11 August, 2004 - The Federal Court dismisses this action, with costs.
25 August, 2004 - The Appellant files this Notice of Appeal in the Tax Court of Canada, having received the May 13, 2002 Notice of Objection by mailing received October 30, 2003.
8 September, 2004 - The Appellant appeals the decision of the Federal Court Trial Division to the Federal Court of Appeal.
5 October, 2004 - Both parties' lawyers sign a letter of agreement from the Respondent's lawyer to Appellant's lawyer, the body of which reads:
This letter is to confirm our recent telephone conversation in which you agreed to our request for an extension of time to file our Reply to November 22, 2004. In the event that we are unable to file our Reply by that time, as agreed, we will be in further communication.
In order to comply with paragraph 44(1)(a) of the Tax Court of Canada Rules (General Procedure), please confirm your consent to the extension by signing the duplicate copy of this letter and returning it to us.
(Exhibit A, Affidavit of Lynn Burch dated February 27, 2006)
Apparently at about this time the Appellant's counsel also began to urge Respondent's counsel to allow this appeal to sit so that it could await the outcome of an allegedly similar appeal, Stark v. The Queen 2003-2403(IT)G. This and about 200 other appeals, together with Stark, relate to an alleged charitable fund donation "scheme".
5 November, 2004 - Respondent's counsel obtains a return date from the Tax Court of Canada of January 18, 2005 for a motion.
22 November, 2004 - Respondent serves on Appellant's counsel a Notice of Motion to dismiss the appeal because no Notice of Objection (to the alleged May 13, 2002 Notice of Reassessment) was filed by the Appellant, returnable January 18, 2005.
23 November, 2004 - Appellant's counsel writes a letter to Respondent's counsel acknowledging service and makes a proposal "that will bring the multiplicity of proceedings to an end", and avoid "additional litigation costs through an agreement on the terms set out above", and asks for an adjournment of the 18 January, 2005 motion date. (Affidavit of Lynn Burch dated 27 February, 2006, Exhibit C.)
13 December, 2004 - Respondent does not oppose the adjournment and it is granted.
20 May, 2005 - Appellant's counsel makes additional submissions to resolve these court actions.
3 August, 2005 - Respondent's counsel refuses the Appellant's proposals.
21, 27 and 30 September, 2005 - The parties agree to adjourn the Respondent's motion until December 31, 2005, awaiting the Federal Court of Appeal's decision.
28 November, 2005 - The Federal Court of Appeal dismisses the Appellant's appeal.
Thereafter- Respondent obtains a hearing date of January 24, 2006 on its motion to dismiss the Appellant's appeal.
Before 5 January, 2006 - Appellant's counsel asked for an adjournment of the 24 January, 2006 motion date in order to file Affidavits and examine affiants of the Respondent. Respondent's counsel agrees to this.
5 January, 2006 - Both counsel agree to proceedings on the Respondent's motion to continue until May 31, 2006. (Exhibit Q to the Affidavit of Lynn Burch dated 27 February, 2006.)
30 January and 27 February, 2006 - These motions are launched by the parties.
5 December, 2006 - Respondent's motion of 22 November, 2004 is heard and dismissed.
6 December, 2006 - These motions are heard.
[4] In the Court's view, both counsels' agreement of October 5, 2004 was carried out by further joint communication about their multiple proceedings. By their joint correspondence, telephone calls, dealings and doings, they implicitly agreed to extend the time in which the Respondent could file its Reply to the Notice of Appeal once the Respondent's motion to dismiss the appeal had been dealt with by the Tax Court of Canada. If they had settled their litigation as proposed by Appellant's counsel on 23 November, 2004 and 20 May, 2005, no Reply would have been necessary. If the Court dismissed the Respondent's Notice of Motion, as it did on December 5, 2006, the Reply would have to be phrased differently than otherwise would be the case, and the Appellant might want to amend his Notice of Appeal. Both sets of counsel were experienced and knew this. In this Court's view, to find otherwise would be to deny the facts recited and would indicate sharp practice by one or both sets of counsel.
[5] The evidence before the Court indicates that:
1. The Respondent had a continuing intention to serve and file a Reply at all times, but both parties hoped to economize on legal costs by dealing with the appropriate motions or the Federal Court of Appeal decision in the most reasonable and economical manner possible.
2. The Respondent's application is meritorious in the circumstances of this appeal.
3. There is no prejudice to the Appellant as a result of this delay. To the contrary, the Respondent's approach has been more economical for the Appellant than if the Reply had been filed on a more timely basis.
4. There is a reasonable explanation for the delay - waiting for the Federal Court of Appeal's decision, essentially on these identical matters; and allowing the Appellant's counsel to proceed with his own actions on the Respondent's motion to dismiss that was dealt with on December 5, 2006.
[6] The Appellant's motion of January 30, 2006 is dismissed for the foregoing reasons.
[7] The Respondent's motion of February 26, 2006 is granted and the Respondent is granted an extension of time until 30 days from the date of this Order in which to file and serve a Reply to the Appellant's Notice of Appeal.
[8] No costs are awarded to either party respecting these motions and no costs are to be taxed respecting them in any event of the cause of this action.
Signed at Vancouver, British Columbia, this 8th day of December, 2006.
"D.W. Beaubier"
COURT FILE NO.: 2004-3495(IT)G
STYLE OF CAUSE: James Walker v. The Queen
PLACE OF HEARING: Vancouver, British Columbia
DATE OF HEARING: December 6, 2006
REASONS FOR ORDER BY: The Honourable Justice D.W. Beaubier
DATE OF ORDER: December 8, 2006
APPEARANCES:
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Counsel for the Appellant: |
Thomas M. Boddez |
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Counsel for the Respondent: |
Linda Bell |
COUNSEL OF RECORD:
Firm: Thorsteinssons LLP
For the Respondent: John H. Sims, Q.C.
Deputy Attorney General of Canada
Ottawa, Canada