Citation: 2011 TCC 43
Date: 20110126
Docket: 2008-3799(IT)APP
BETWEEN:
ROMAN MINIOTAS O/A ROMEO’S PLUMBING & HEATING,
Applicant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR ORDER
Woods J.
[1]
In this application, Roman
Miniotas seeks an extension of time to institute an appeal to this Court. The
application is in respect of assessments made under the Income Tax Act
for the 2001 and 2002 taxation years.
[2]
When this application was
originally filed, the applicant was represented by his accountant, David Fox. However,
Mr. Fox became ill and died before the application was heard.
[3]
The applicant informed the Court that
he has had difficulty finding new representation and several adjournments have
been requested. When the matter came before me for the second time, I refused
the adjournment and the application was heard with the applicant representing
himself.
[4]
Subsection 167(5) of the Act
sets out several requirements that must be satisfied before an application of
this nature may be granted. It reads:
167(5)
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.
[5]
The respondent submits that a
number of these requirements have not satisfied.
Relevant events
[6]
A synopsis of the relevant events
is set out below.
[7]
On July 25, 2005, the Minister issued
reassessments for the applicant’s 2001 and 2002 taxation years.
[8]
On October 24, 2005, the applicant
filed a notice of objection to the reassessments.
[9]
On October 25, 2006, the Minister
issued new reassessments for the 2001 and 2002 taxation years.
[10]
On January 22, 2007, the applicant
filed a notice of objection to the new reassessments.
[11]
On April 19, 2007, the Minister
confirmed the new reassessments.
[12]
On October 3, 2007, the applicant
sent a letter which appears to be another objection. The letter is not addressed
to anyone in particular but it was received by the Canada Revenue Agency
(CRA).
[13]
On October 24, 2007, the applicant
sent another letter which was not addressed to anyone. It was also received by
the CRA. The body of this letter is reproduced below:
We sent our
appeal on October 3, 2007 to where we believed was the right division. We have
been informed that it has to go to this division, and we would ask that the fee
be waived for monetary reasons. We enclose the objections to the appeals court
which we sent in, in good faith, within the time limit.
We are
choosing the informal procedure for our appeal.
[14]
On May 27, 2008, the applicant
sent a letter addressed to this Court at its Winnipeg location at 363
Broadway. It appears that the applicant made a mistake in delivering this
letter because it was also received by the CRA who forwarded it to the Court.
It is worth mentioning that the CRA’s offices are also on Broadway in Winnipeg.
[15]
In this letter, the applicant
submits that the earlier letter of October 24, 2007 was properly addressed and he
states that the envelope of the earlier letter is included in support. The
applicant surmises that the letter had simply been dropped off at the wrong
address.
[16]
On October 24, 2008, the Court
sent a letter to the applicant requesting further information in order to
process the appeal.
[17]
On November 9, 2008, the applicant
responded to this letter and indicated that everything would be sent again to
the Court.
[18]
On November 24, 2008, the
applicant sent a letter to the Court which states: “As per your instructions,
we are requesting an extension in time for filing an appeal.”
Discussion
[19]
By way of background, I can only
surmise that this entire situation has been very frustrating for both parties.
[20]
Except for the final piece of
correspondence on November 24, 2008, it appears that all of the correspondence
from the applicant was prepared by his accountant, Mr. Fox. Unfortunately, we
were not able to have the accountant’s explanation of events.
[21]
One thing is fairly clear from the
correspondence. It is that the accountant believed that the CRA and the Tax
Court of Canada were divisions of the same government department. It appears
that this led the accountant to believe that it was not material as to where
the notice of appeal was delivered. Unfortunately, this is a common
misconception among persons who wish to appeal to this Court under the informal
procedure.
[22]
In the reply, the respondent
raises four grounds for objecting to this application. Each of these will be
considered below.
Statutory time limit
[23]
The respondent submits that the
application to extend time was made on November 24, 2008, which is beyond the
15 month deadline imposed by s. 167(5)(a) of the Act.
[24]
This submission is correct if the
application to extend time was first made on November 24, 2008. The Court has
no discretion to extend the statutory deadline.
[25]
That is not the end of the matter,
however. The question remains as to whether any of the prior correspondence
could properly be considered an application to extend time that was filed with
the Court within the 15 month deadline.
[26]
It is appropriate, in my view, for
the Court to view applications to extend time compassionately. It is desirable
that taxpayers have their appeals adjudicated on the merits to the extent
practicable and within the legislative requirements of s. 167(5).
Unfortunately, many taxpayers, and even their advisers, have difficulty in
following the proper procedures to institute an appeal, even when these
procedures are communicated to the taxpayer as they were in this case.
[27]
Turning to the relevant facts, it
appears that the accountant sent two letters addressed to the Court that were
within the 15 month deadline for applying for an extension of time. These
letters were dated October 24, 2007 and May 27, 2008. For reasons that are not
at all clear, both of these letters found their way to the CRA. Unfortunately,
it is now too late to know the background to this as the person responsible has
died.
[28]
In all the circumstances of this
case, it would be appropriate to give the benefit of the doubt to the applicant
and consider that the letter dated October 24, 2007 is a validly filed
application for an extension of time to appeal.
[29]
In reaching this conclusion, I
acknowledge that the letter does not specifically request an extension of time.
However, this is not necessarily fatal. The letter, which is reproduced above,
makes reference to prior objections to the appeals court being sent within the
time limit. A plausible interpretation of this statement is that the accountant
was aware that the deadline had passed and he was requesting that the appeal be
filed in any event. If this interpretation is correct, then the letter could
reasonably be considered to be an application to extend time to appeal.
[30]
Another difficulty is that this
letter was never received by the Court until after the 15 month deadline had
passed. Subsection 18.15(2) of the Tax Court of Canada Act deems an
originating document to be filed on the day that it is received by the
Registry.
[31]
I would note that the material
before me strongly suggests that the envelope containing the letter of October
24, 2007 was addressed to the proper address at the Court. For some unexplained
reason, it found its way to the CRA offices a few blocks away. It appears that
the CRA returned the letter to the applicant (not to the accountant) and that the
applicant did not realize that it had not been accepted.
[32]
The CRA cannot be faulted for the
assistance that it provided in this case. However, if the CRA had forwarded the
October 24, 2007 letter to the Court (as it had been addressed) rather than sending
it back to the applicant, it is very likely that this matter would not have
been so far off track. The Registry of the Court has established procedures to
provide assistance to taxpayers in situations such as this. I would also
comment that there is no prejudice to the respondent as the CRA was on notice
that the applicant wished to appeal.
[33]
In the unusual circumstances of
this case, it is reasonable in my view to consider that the letter of October
24, 2007 was received by the Court shortly after it had been received by the
CRA.
Is an extension just and
equitable?
[34]
The respondent submits that it
would not be just and equitable to grant the application and therefore the
application should be denied by virtue of s. 167(5)(b)(ii).
[35]
The legislation requires that the
applicant demonstrate that it is just and equitable to grant the application.
This requirement has been satisfied in my view. The applicant entrusted this
matter to his accountant, and the accountant made many attempts, albeit clumsy
ones, to file a valid appeal. The amount at stake for the applicant is
significant, $30,000 plus penalties and interest, and this weighs in favour of
granting the application.
Was application made as
soon as circumstances permitted?
[36]
The respondent submits that the
condition set out in s. 167(5)(b)(iii) is not satisfied because the
applicant has not demonstrated that the application was made as soon as
circumstances permitted.
[37]
The application was sent on
October 24, 2007, which was approximately six months after the confirmation and
three weeks after the applicant attempted to file a further notice of
objection. We do not know why the accountant waited this long. I am prepared to
give the applicant the benefit of the doubt concerning this issue, since the
person who had carriage of this matter cannot now tell his side of the story.
Are there reasonable
grounds for the appeal?
[38]
The respondent submits that the
applicant has not demonstrated that there are reasonable grounds for the
appeal.
[39]
I do not agree with this
submission. It appears that the assessments made a number of adjustments to
revenue and expenses related to the applicant’s plumbing and heating business.
Included with the material filed by the applicant were detailed explanations
for the appeal which had been prepared by the accountant. These explanations
could have been more clearly set out, but they are sufficient to satisfy me
that the applicant may have a legitimate complaint against the assessments. I
conclude there are reasonable grounds for an appeal.
Conclusion
[40]
The application is allowed, and an
order will be issued which extends the time to institute the appeal to the date
of the order and which deems the letter dated October 24, 2007 to be a validly
instituted notice of appeal.
[41]
Finally, I would comment that this
conclusion has been a difficult one and the applicant has been given every
benefit of the doubt in order that he is afforded the right to have his appeal
heard on the merits.
[42]
Having been afforded this
opportunity, I expect Mr. Miniotas to be properly prepared for the hearing of
the appeal when it is scheduled. The respondent has a legitimate interest in
having this appeal decided as soon as possible.
Signed at Toronto,
Ontario this 26th day of January 2011.
“J. M. Woods”
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