Citation: 2013 TCC 104
Date: 20130412
Docket: 2012-1511(IT)APP
BETWEEN:
PATRICK POULIN,
Applicant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR ORDER
Hershfield J.
[1] The Applicant seeks
an extension of time to file a Notice of Objection to a Notice of the Reassessment
dated October 13, 2009. That reassessment concerns the Applicant’s 2006
taxation year.
[2] The Applicant
testified at the hearing that he mailed a Notice of Objection to the Canada
Revenue Agency (“CRA”) on October 19, 2009. He recalled receiving the subject
reassessment while living in Thompson, Manitoba and that without delay he
prepared the Notice of Objection and personally took it to the post office in
Thompson, had it weighed, stamped and deposited for delivery.
[3] The Applicant
submitted a copy of the Notice of Objection that he maintains was mailed on
October 19, 2009. It was signed and dated that date.
[4] The Respondent
tendered the affidavit of an appeals officer in the appeals division of the
Winnipeg Tax Services Office of the CRA. The affidavit asserts that the affiant
has “charge of the appropriate records and knowledge of the practices of the
CRA.”
[5] As well, the
affiant asserts that he examined the records and as such has knowledge of the
matters deposed to by him.
[6] The affidavit
confirms the date of issuance of the reassessment of the Applicant’s 2006
taxation year and asserts that the Notice of Objection dated October 19, 2009
was not received by the CRA until April 28, 2011. That assertion is drawn from
the CRA’s copy of the Notice of Objection dated October 19, 2009 but the copy was
stamped as received by the appeals division Burnaby-Fraser Tax Services Office on
April 28, 2011.
[7] The Respondent
relies on the April 28, 2011 receipt date in asserting that the Notice of
Objection was served more than one year and 90 days after the issuance of the
Notice of Reassessment. If I accept that the Notice of Objection was not served
on the Minister of National Revenue (the “Minister”) until April 28, 2011 then
clearly the application is out of time and this Court has no jurisdiction to
grant the extension requested. The Crown relied on Johnson v. The Queen as authority for this position.
[8] The sole issue in
this appeal then is whether the Minister was served within the time limits set
out in paragraph 166.2(5)(a) of the Income Tax Act (the “Act”).
That paragraph, referring back to section 166.1 of the Act, sets out the
time limit referred to above, namely, that the Minister must be served with the
Notice of Objection within one year and 90 days from the date of the Notice of
Reassessment as prescribed in paragraph 166.1(7)(a).
[9] The Applicant’s
testimony as to the asserted date of mailing the Notice of Objection is
credible. The affiant of the affidavit relied on by the Respondent was not at
the hearing. His not being available for cross-examination is, in this case,
problematic in my view. However, before dealing with that concern, it is necessary
that I relay more of the Applicant’s testimony and the supporting evidence that
he tendered as exhibits at the hearing.
[10] The Applicant’s
evidence was that he was aware of the need to file timely notices of objection.
He had been reassessed for 2005, 2006, 2007 and 2009. He produced copies of his
notices of objection in respect of each of these years. They were all dated
within weeks of the date of reassessment. Those respecting the 2006, 2007 and
2009 years were sent to the Chief of Appeals at the Western Intake Centre in Surrey, British Columbia. The objection in respect of the 2005 year was sent to the Chief
of Appeals of the Sudbury Tax Centre.
[11] The only evidence
contradicting such timely responses to reassessments is correspondence from the
CRA in July and November of 2011 denying timely receipt of notices of objection
for 2006 and 2007.
[12] The July letter
caused the Applicant to file an application for an extension of time with the
Minister for both 2006 and 2007. The application in respect of the 2006 year
was refused as being out of time and the application in respect of the 2007
year was allowed.
[13] I have no reason not
to accept the Appellant’s testimony that he mailed the Notice of Objection in
respect of the reassessment for his 2006 taxation year on or about October 19,
2009. That alone, in this case, may be sufficient to allow the application even
though the Act puts emphasis on the date of service, or date of receipt,
of a notice of objection not on the date of mailing. The Applicant’s testimony
leads me to believe the date of receipt would have been in October, 2009. Going
further, I am dubious as to the adequacy of the evidence provided by the
Respondent as to the date the Minister received the Notice of Objection.
[14] There are two reasons
for my having doubts as to the adequacy of the evidence provided by the
Respondent as to the date the Minister received the Notice of Objection for
2006. First, a question arises concerning the mailing address to which the
Notice of Objection was said to have been sent in October 2009. This in turn,
raises a second question concerning the adequacy of the affidavit relied on by the
Respondent.
[15] As to my first
concern regarding the mailing address, I note that the Notice of Objection in
respect of the 2005 reassessment, addressed to the Chief of Appeals of the
Sudbury Tax Centre, was not suggested as having been served late. In 2006 and
2007 and 2009, the Notices of Objection were sent to the Chief of Appeals at
the Western Intake Centre in Surrey, British Columbia. The objections for 2006
and 2007 were said to be late filed. It does not strike me as a coincidence
that mail to the Western Intake Centre in Surrey was said to be late filed two
years in a row.
[16] The Applicant
testified that he was advised by an auditor (Sherry Quass) in the Winnipeg Tax
Services Office to send his objection to the Surrey office. He had contacted
Ms. Quass in response to a letter she sent, dated October 13, 2009, requesting
that he provide further information with respect to his 2007 return. That
letter, entered as an exhibit, set out very detailed information requirements
pertaining to a donation program in respect of which the Applicant received a
donation receipt which he claimed in his 2007 taxation year. The 2006
reassessment appears to concern the same issue.
[17] I am of the view that
the CRA letter, dated in October 13, 2009, lends support to the Applicant’s testimony
that the Notice of Objection in respect of the 2006 year was sent to the Chief
of Appeals at the Surrey office as instructed Ms. Quass. Indeed, the
Respondent’s own copy of the Notice of Objection, referred to above and receipt
stamp dated April 28, 2011, clearly shows that it was addressed to the Chief of
Appeals at the Western Intake Centre in Surrey, British Columbia.
[18] At this point, I note
that subsection 165(2) requires that notices of objection be served by being
addressed to the Chief of Appeals in any District Office or Taxation Centre. I
have no reason to believe that there was not a Surrey office that would meet
that requirement and, in any event, the Respondent has not asserted otherwise; nor does the affidavit deal
with that question – the question being: what might have happened to the Notice
of Objection if it had been sent to the Surrey office? The Respondent’s copy of
the Notice, showing the addressee as Chief of Appeals at Western Intake Centre,
Surrey British Columbia, is stamped as received by the Burnaby-Fraser Tax
Services Office. The problem here then is that knowing the receipt date in one
office, does not address the receipt date in another office where, according to
the evidence, it was first sent. That is, the Court has no evidence to address
the question of if and when the Notice of Objection was received by an office
in Surrey, to contradict the evidence that it was sent there.
[19] That, together with
the credible evidence of the Applicant as to when the Notice of Objection was
mailed leads me to conclude that the Applicant must be given the benefit of the
doubt in this case as to when it was received subject to my addressing my
second question concerning the adequacy of the affidavit relied on by the
Respondent.
[20] It is commonly
accepted that statements in an affidavit of an officer of the CRA, who is familiar
with the practices of the CRA and who has access to the appropriate records,
can be taken as evidence of those statements. Indeed, the Act makes
specific provision for this in subsections 244(9) and (10).
[21] Subsection 244(9)
reads as follows:
244(9) Proof of documents -- An
affidavit of an officer of the Canada Revenue Agency, sworn before a
commissioner or other person authorized to take affidavits, setting
out that the officer has charge of the appropriate records and that a document
annexed to the affidavit is a document or true copy of a document, or a
print-out of an electronic document, made by or on behalf of the Minister
or a person exercising a power of the Minister or by or on behalf
of a taxpayer, is evidence of the nature and contents of the
document.
[22] The affidavit in this
case appears to meet the requirements of this subsection. However, even if I accept
that the affiant in this case had charge of all the appropriate records –
although I have doubts as to that – all it establishes is that the Burnaby-Fraser
Tax Services Office did not receive the Objection until April 28, 2011. That
is, this provision only permits the document annexed to the affidavit to be
received as evidence of its contents. It does not address the issue of if and
when the Surrey office received it. That is, it leaves room for the
consideration of other evidence that suggests an earlier receipt date at a
different office. Allowing evidence of one receipt date does not prove that there
is no other receipt date.
[23] That concern is
addressed in subsection 244(10) which provides as follows:
244(10) Proof of no appeal --
An affidavit
of an officer of the Canada Revenue Agency, sworn before a commissioner or
other person authorized to take affidavits, setting out that the
officer has charge of the appropriate records and has knowledge of the practice
of the Agency and that an examination of those records shows that a notice of assessment
for a particular taxation year or a notice of determination was
mailed or otherwise communicated to a taxpayer on a particular
day under this Act and that, after careful examination and search of those
records, the officer has been unable to find that a notice of objection or of
appeal from the assessment or determination or a request under
subsection 245(6), as the case may be,
was received within the time allowed, shall, in the absence of proof to the
contrary, be received as evidence of the statements contained in it.
[24] The affidavit in
question does include a statement that a search revealed no earlier receipt of
a notice of objection. In the absence of proof to the contrary then, it appears
that I would have to accept that the April 28, 2011 receipt date was the
earliest date the Notice of Objection was received. However, in this case there
is evidence to the contrary.
[25] Since the evidence
supports a finding that the place where the Notice of Objection was first sent
was Surrey, British Columbia and that the receipt date attested to in the
affidavit is a date that reflects a subsequent receipt and since the first
receipt date is the relevant date for the purposes of applying the time limits
set out in the Act, I am inclined to give the Applicant the benefit of
the doubt by finding that the Notice of Objection was more likely than not
received by the Surrey Office in or about October 2009. I have no evidence to
the contrary. That being the case, the application can and should be allowed.
[26] However, before
closing, more needs to be said about the sufficiency of the affidavit relied on
by the Respondent in this case. Recent authorities have questioned whether the
affidavit relied on by the Crown had been sworn by the appropriate affiant. The
most recent authority is the case of Carcone v. The Queen. That case also dealt with an
application brought pursuant to section 166.2 of the Act. However, in
that case the issue was whether the reassessments were mailed to the applicant
on the date asserted by the Minister – a date evidenced by way of an affidavit
of an officer of the CRA.
[27] In that case Justice
D’Arcy noted that the onus of proof as to the mailing date of the reassessment
was on the Crown.
The onus is not different in regard to the date of receipt of a notice of
objection. Only the CRA would be possessed of such information.
[28] In that case Justice
D’Arcy found that the Crown could not rely on subsections 244(9) and (10) as
the affiant of the relied upon affidavit did not state in the affidavit that he
had charge of the appropriate CRA records. I find that the Crown can not rely
on those subsections of the Act for other reasons. However, what is
relevant to me about Justice D’Arcy’s decision is that it discusses the reliability
and necessity of affidavit evidence in the context of CRA mailroom practices
where the application of subsections 244(9) and (10) have been brought into
question. There is as much to be said of the reliability of evidence of
mailroom practices in the context of the CRA’s receipt of mail (the present
case) as there is in the context of the CRA’s sending mail (the case in Carcone).
[29] In Carcone the
affiant had no direct knowledge of mailroom practices. I have no information as
to whether the affiant in the case at bar, an appeals officer in Winnipeg, had
any idea of the practices of mailrooms in Surrey in the case of mail received
there when it was not to be dealt with there. Would it have been forwarded back
to Sudbury where the 2005 objections were processed? The affiant was neither
the last nor first person in the chain of mailroom personnel who could answer
such questions. I have no evidence that the affiant in this case checked the
records of offices other than the Burnaby-Fraser office even though the
Objection on its face indicated that it was sent to Surrey, not the Burnaby-
Fraser office. If reliability is a factor, the affidavit in this case stating
knowledge of CRA practices is not specific enough given that the CRA is relying
on the receipt date at the Burnaby-Fraser office. Even if the affiant testified,
and in this case I see no reason why he could not have testified, his evidence
of what happens in the case of mail being shuffled from office to office would
be even less reliable than hearsay if he did not even enquire about what the
Surrey office might have done had it received the objection.
[30] As in Carcone,
the evidence here does not support a finding that the evidence in the affidavit
was reliable. As Justice D’Arcy said “It is my view that, at a bare minimum, the tests of reliability
and necessity require the Respondent to produce a witness who has knowledge of
the CRA’s mailing practices with respect to notices of assessment.” The same must
apply to the CRA’s practices regarding the receipt of mail such as notices of
objection and knowledge of mailing practices must address the circumstances of
each case. The circumstances in the case at bar are not normal. They require the
Respondent to produce a witness who has knowledge of the CRA’s mailing practices
in such circumstances. This was not done and I am not satisfied that the
affiant in this case was informed of the specific practices that were relevant
to circumstances in this case.
[31] I do not wish this
decision to be taken as undermining Parliament’s intention to ensure a workable
administrative regime by invoking bright line limitation periods and evidentiary
rules that fix critical dates relating to those limitation periods in a manner
that comes close to deeming an unaccountable acceptance of CRA’s search of
records as being final and determinative. On the other hand, depriving
taxpayers of their day in court is a serious issue and cases like Carcone
are only meant to guard against that possibility where doubts exist as to the
reliability of the evidence that purports to fix those critical dates.
[32] There is also a
question here of guarding against one rule applying to litigants represented by
counsel in respect of monetarily significant assessments and another applying to
self-represented persons even though the relative monetary significance of an
assessment to the self-represented litigant may be greater than that of the
represented litigant. Carcone underlines the value of an effective
cross-examination of a CRA affiant. Making access to the courts easier for
ill-equipped self-represented persons serves little purpose unless the CRA and
the Department of Justice (“DOJ”) level the playing field by scrutinizing affidavits
more carefully in order to assist the Court in ensuring that the principles in Carcone
are addressed for self-represented litigants. No less is required to comply
with the principles set out in the Canadian Judicial Council publication in
2006: Statement of Principles on Self-Represented Litigants.
[33] Further still, addressing
the responsibility of the CRA and the DOJ, I note again that the Minister has
been empowered by Parliament to waive certain statutory requirements. In addition to subsections 165(6) and 166.1(4), there is a broader, more general,
discretionary provision, namely subsection 220(2.1) which empowers the Minister
to waive the filing of a notice of objection or in effect to waive statutory deadlines.
[34] In my view, that broader provision requires the Minister
to consider the application of such power prior to it being brought before this
Court. This is the process that Parliament statutorily imposed on the Minister,
and by extension, on this Court. While it is not for this Court to suggest
that it has the jurisdiction to consider the manner in which the Minister’s
powers are exercised, the timing of the exercise of her discretionary powers
under section 220, in my view may well fall within the jurisdiction of this
Court. In other words, all I am suggesting is the Minister must undertake that which
Parliament has empowered her to do in an effective sequence. The effective
sequence of actions under the subject provision, subsection 220(2.1), is for the Minister to consider its application before this Court closes
that door.
[35] Indeed, at several hearings, and in one reported case, I
have suspended judgment suggesting that the DOJ refer an application for an
extension of time back to the Minister for consideration prior to my disposing
of it.
The first response to that suggestion in that reported case was that I had no
power to “order” the Minister to do any such thing. That response was then
followed by recitations of the law to the effect that, on the facts before me,
I had no jurisdiction to allow the application.
[36] Still, although the end result of that application may have
been to give effect to my concerns,
I can not help but observe that a suggestion or recommendation from the Bench,
that a further avenue be pursued, is not an “order”. More recently, a DOJ
lawyer made a recommendation that may well have resolved this type of deadlock.
Indeed, she agreed at the hearing to take steps to initiate a resolution to an
applicant’s time barred application for an extension of time to file an
objection by having him agree to seek a Ministerial review.
This appeared to be an appropriate approach given my concerns at that hearing as
to the “fairness” of the underlying assessment given what seemed to be a case
of a clerical error causing double taxation.
[37] While I was impressed with this initiative to break this
deadlock between the Court and the DOJ, I remain unimpressed with the CRA and
DOJ for not following a request of the Court. As pointed out in Knight v. The
Queen,
nothing in subsection 220(3.1) precludes the Minister from acting on her own
initiative even without an application. The same can be said of subsection
220(2.1). Even if there is no duty on the Minister to review all stale–dated
applications, as I suggested above, the Minister should not resist utilizing
her administrative powers when a potential unfairness is brought to her
attention from any credible source. If the exercise of that power does not
recognize that the circumstances being reviewed merit a reassessment or a
waiver of a filing requirement, only the Federal Court has jurisdiction to
conduct a judicial review. Barring that recourse being effective, this Court then
has no jurisdiction beyond hearing the application and applying the law.
[38] In short, I am troubled by what has appeared to me to be
an inevitable reluctance of the CRA and the DOJ to assist the course of justice
by pursuing administrative relief before closing same off by insisting that the
Tax Court of Canada just comply with strict statutory deadlines and say no
more. The Act contemplates a sequence that dictates that the open-ended
discretion of the Minister must, in effect, precede a final dispensation by the
Court. There should be no need, in a case where this Court feels it is warranted
that such sequence be followed, for it to consider the possibility of an Order
imposing a particular sequence of procedural steps so as to afford a taxpayer the
benefit of a sequence that had to have been contemplated by Parliament given
that the purpose of granting the Minister discretion in provisions like sections
220 was to help to ensure just and fair results where warranted. That the
Minister may grant relief under the subject provision does not necessarily
suggest that there is no duty on her to consider whether the circumstances of
any given case warrant a review.
[39] While it is clear that the Federal Court has
jurisdiction to consider the parameters of a Minister’s duties under section
220, it is my view that this Court should not be forced to preclude the
application of such provisions until the powers to act pursuant to those
provisions have been diligently considered - at least where, as stated above, a
credible source requests a fairness review.
[40] Indeed, the inherent powers of a superior court, even a
statutory court like the Tax Court of Canada, may well justify such requests be
made as an “order”. As a superior court
of record, this Court
enjoys an inherent jurisdiction in respect of its own processes and, in my
view, that should include insisting on a particular sequence of events
contemplated by the Act. While it
is often said that such jurisdiction is limited by reason of this Court being a
statutory court with specific and limited powers and jurisdiction, such
limitations can not, in my view, frustrate a need to impose a proper sequence
of events. In R. v. Cunningham, [2010] 1 S.C.R. 331, at paragraph 18,
Rothstein J., writing for the Court, stated that inherent jurisdiction includes
ensuring that the machinery of the Court functions in an orderly and effective
manner. In the next paragraph, referring to statutory courts and other statutory
tribunals, he states: “courts can apply a doctrine of jurisdiction by necessary
implication”.
[41] In my view, it is
a necessary incident of this Court’s jurisdiction to insist on an effective
sequence of actions in appropriate cases as contemplated by the Act. Otherwise,
the function of this Court can be abused.
[42] In any event, for the reasons expressed above, I accept
that the Notice of Objection was mailed on October 19, 2009 and more
importantly I find that on a balance of probability it was served on the CRA as
required by the Act within 90 days of the issuance of the subject
reassessment. Accordingly, the application is allowed, without costs.
Signed at Ottawa, Canada this 12th day of April 2013.
"J.E. Hershfield"
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