Docket:
T-1666-10
Date: 20131126
Citation: 2013 FC 1192
Calgary, Alberta, November
26, 2013
PRESENT: The
Honourable Mr. Justice Campbell
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BETWEEN:
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CONOCOPHILLIPS CANADA
RESOURCES CORP.
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Applicant
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and
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MINISTER OF NATIONAL REVENUE
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Respondent
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REASONS FOR ORDER AND ORDER
[1]
The present judicial review Application concerns
a vitally important disagreement which arose in the context of a history of a
taxation debate between the Applicant (Conoco), being one of several oil and
gas companies participating in the Syncrude Project in Alberta, and the
Respondent (Minister) with respect to royalties on the production of
non-renewable resources. The present Application is centred on a course of
conduct between Conoco and the Minister in 2010 that I find is able to be determined
without a full rendition of the history.
[2]
The disagreement is about whether the Minister
sent a Notice of Reassessment by mail to Conoco. The Minister found that the
Notice of Reassessment was mailed; Conoco takes the position that the Minister
failed to prove the mailing. The Minister’s factual finding has serious legal
consequences. In play in the present Application are three statutory time-line
provisions of the Income Tax Act, R.S.C., 1985, c.1, (5th
Supp.) (Act): the limitation period for serving the Minister with a
notice of objection to a notice of reassessment is "on or before the day
that is 90 days after the day of sending the notice of assessment (s. 165(1));
where the Minister sends a notice of reassessment by mail, the notice is
"presumed to be mailed ... on the date of that notice (s. 244(14)); and
with respect to receipt, the notice of reassessment "shall be deemed to
have been received by the person to whom it was sent on the day it was mailed (s.248(7)(a)).
[3]
A précis of the uncontested events which ground
the present Application is as follows: on April 14, 2010, members of Conoco’s
tax group first learned from the Minister’s officials that a Notice of
Reassessment with respect to Conoco’s taxation year ending November 30, 2000
(Assessment) was purportedly mailed by the Minister to Conoco on November 7,
2008; on May 3, 2010, the Minister’s officials supplied Conoco with a copy of
the Assessment dated April 26, 2010 which bears a “date of mailing” notation of
November 7, 2008; as a result, by way of letter dated June 7, 2010, Conoco
served the Minister with a Notice of Objection to the Assessment (Objection); in
response to the service of the Objection on the Minister, by letters dated September
15, 2010 and October 12, 2010, the Minister informed Conoco that, because the
Objection was not served within 90 days of the mailing of the Assessment, and because
no request for an extension of time to do so was made within the following year,
being before February 5, 2010, the Objection was rejected. (Decision).
[4]
During the course of the hearing of the present
Application, Counsel for Conoco confirmed that Conoco’s purpose in bringing the
present Application is to have the Minister’s rejection of the Objection set
aside, thus removing the bar established by the Minister for not considering the
merits of Conoco’s Objection, with the result that if Conoco disagrees with the
Minister’s consideration of the Objection it will have the right to appeal that
consideration to the Tax Court of Canada. The primary issue for determination
is whether the Minister’s decision to reject the Objection was reasonable, and
in reaching this determination, the key issue is whether the Minister’s finding
that the Assessment was mailed on November 7, 2008 is substantiated on the
evidence.
[5]
Counsel for the Minister makes two arguments in
opposition to the relief sought in the present Application: this Court has no
jurisdiction to hear and determine the Application because its subject matter
is within the exclusive jurisdiction of the Tax Court of Canada (Tax Court); and,
in any event, the Minister’s decision was reasonable. For the reasons that
follow, I do not accept either argument.
I. Is
the Application within the Federal Court’s Jurisdiction?
[6]
It is common ground that judicial review in this
Court is available provided the matter is not otherwise appealable in the Tax
Court (Minister of National Revenue - M.N.R.) v. JP Morgan Asset Management
(Canada) Inc., 2013 FCA 250 at paragraph 81).
[7]
Counsel for the Minister argues that this Court
has no jurisdiction to consider the “legal efficacy” of a notice of
reassessment which is a matter to be determined by the Tax Court in an income
tax appeal, and also argues that at the core of the present Application is the
validity of the Assessment which falls within the exclusive jurisdiction of the
Tax Court (Respondent’s Memorandum of Fact and Law, paras. 4 and 46). Counsel
for the Minister makes the following statement about what Conoco should have
done rather than bring the present Application:
If
the applicant is correct and that its notice of objection is valid, it should
have filed a notice of appeal before the Tax Court of Canada and demonstrated
the validity of the same in that forum. It could have done so pursuant to s.
169(1)(b) of the Act. In the course of that proceeding, the validity of
the notice of objection, including a determination of whether a notice of
reassessment was sent, would be made. This application should be dismissed on
the basis that this Court does not have the jurisdiction to determine the
validity of the notice of objection or the notice of reassessment.
(Respondent’s
Memorandum of Fact and Law, para. 51)
[8]
Counsel for the Applicant argues that no right
of appeal exists to the Tax Court with respect to the unique circumstances of
the present case. I agree with this argument. First, s. 169(1)(b) of the Act
does not apply to the present circumstances because the conditions precedents
do not exist. The provision allows a taxpayer to appeal an assessment to the
Tax Court to vary or vacate an assessment after either the Minister has
confirmed the assessment or reassessed, or 90 days have elapsed after service
of the notice of objection and the Minister has not notified the taxpayer that
the Minister has vacated or confirmed the assessment or reassessed.
[9]
With regard to Counsel for the Minister’s point
that this Court has no jurisdiction to consider the “legal efficacy” of a
notice of reassessment, in deciding the present Application no attempt will be
made to determine whether the Assessment has the capacity of producing the
legal result desired by the Minister. As set out above, the purpose of the
present Application is not to challenge the validity of the Assessment but to
remove the Decision that is an obstacle placed in Conoco’s path towards a
proper consideration by the Minister of its Objection. I find that the present
Application is within the jurisdiction of this Court and Conoco has no other
access to justice besides the filing of the present Application.
II. The
Content of the Decision Under Review
[10]
On June 7, 2010, Ms. Lynn Moen, Director of
Taxation for Conoco, sent the Objection to the Assessment for service by
courier together with a letter explaining some of the background relating to the
November 30, 2000 taxation year, and how Conoco learned of the Assessment. The
letter ended with the following statement:
In
light of our receipt of the Notice of Reassessment dated April 26, 2010, we are
filing this objection within the 90 day objection period. We kindly request
copies of the audit report (including attachments thereto, all notes,
memoranda, etc. relating to all matters in the Notice of Reassessment dated
April 26, 2010. Thank you for your assistance.
(Applicant’s
Record, Volume 1 of 2, Tab 2E, p. 51)
It is Ms. Moen’s
letter that instigated the Minister’s decision-making under review.
[11]
In answer to Ms. Moen’s letter, by letter dated
September 15, 2010, a delegate of the Minister, Mr. Alnoor Kassam, Chief of
Appeals, Calgary Tax Services Office, Canada Revenue Agency, made the following
assessment:
Re:
Application for extension of time to file an objection for the November 30,
2000 Taxation year
In
response to your request for an extension of time to file a notice of objection
with respect to the 2000 taxation year, we are writing to inform you that we
cannot grant your application on the following basis:
1.
Section 165 of the Act provides that a notice of objection shall be served on
the Minister within 90 days of the day of mailing the notice of reassessment.
Section 166.1 of the Act circumscribes the Minister's power to grant an
extension of time to file an objection outside the limitation period provided under
section 165. Subsection 166.1 (7) expressly prohibits the Minister to grant an
extension of time, if one year and 90 days has elapsed since the day of mailing
the notice of reassessment.
Your
application was not made within one year after the expiration of the time
otherwise permitted for filing an objection. The latest reassessment date is
November 7, 2008. At the time of the reassessment you would have had 90 days to
file a Notice of Objection. Paragraph 166.1(7)(a) allows you to apply for an
extension of time to file a notice of objection within one year following the
expiration of the 90 days. In your case, the latest date available would have
been February 5, 2010.
A
number of court cases have upheld this decision. One of the most recent being Garry
Moon v The Queen (2010 TCC 393).
In
addition to paragraph 166.1 (7)(a) requiring the application to made within one
year after the normal time limit to object, paragraph 166.1 (7)(b) sets out
other criteria that must also be met.
2.
In your letter dated June 15, 2010, you indicated that at no time did you
receive a Notice of Reassessment or T7WC for the November 30, 2000 taxation
year. We are able to trace through our internal mail system that the Notice of
Reassessment was sent out on November 30, 2000 [sic: November 7, 2008].
We
have also obtained copies of audit's letter dated May 17, 2008 indicating that
the GMS allocation adjustment has been forwarded to Winnipeg for processing. A
copy is attached for your records.
It
should be noted that the Tax Court in Austin v Queen (2010 TCC 452)
indicated that it is well established that a notice of assessment is validly
sent if it has been mailed to the taxpayer.
Accordingly, the Minister cannot extend the time in the
present case. The Minister can only exercise the powers that are granted to him
by law. If you have any questions please contact the writer at the above noted
number.
(Respondent’s Record, Vol. I of II, Tab 1C)
[12]
By letter dated September 23, 2010, Counsel for Conoco
requested Mr. Kassam to reconsider his assessment:
As
a starting point your letter states that you deny Conoco' s request for an
extension of time to serve a Notice of Objection (the "Objection").
However, Conoco has not requested an extension of time. No extension is
necessary. Conoco filed the Objection on June 6, 2010 in respect of a Notice of
Reassessment provided to Conoco by the CRA on or about May 3, 2010 (the
"Assessment"). Although the Assessment bears the date of November 7,
2008, for reasons outlined below, the statutory presumption that the Assessment
was mailed on such date does not apply in this case. The Objection was validly
served within 90 days of the date on which the Assessment was provided to the
taxpayer. It is our position that as things now stand the Minister has the
obligation and the power to consider and then vacate, confirm or vary the
Assessment. The issue is whether the statutory presumption that the Assessment
was mailed on November 7, 2008 is supported by the facts and circumstances.
Conoco says it is not and that a properly instructed Court will so find.
The Statutory Presumption in Respect of Mailing
Taxpayers
are entitled under Act [sic] to serve on the Minister a Notice of Objection
within 90 days "after the day of mailing of the notice of
assessment". As such, after an assessment is mailed, a taxpayer has 90
days to serve the Minister with a Notice of Objection. The "date of
mailing" of an assessment is subject to the following statutory
presumption:
244(14) Mailing date - For the purposes of this Act, where [ ... ]
any notice of assessment or determination is mailed, it shall be presumed to be
mailed on the date of that notice or notification.
The
date of mailing is "presumed", rather than "deemed". This
drafting creates a rebuttable presumption. For example, in Hughes v.
Minister of National Revenue the Court was "satisfied that there is
sufficient evidence to rebut the presumption created by subsection 244(14)
concerning the mailing date of the notice of assessment. The Court in Hughes
held that the assessment was in fact mailed at a date later than the date
stated on the assessment.
The Statutory Presumption is Rebutted in this Case
On
May 3, 2010, Conoco received a copy of a Notice of Reassessment bearing the
date "November 7, 2008". Subsequently, on May 28, 2010, Conoco
received a cover letter bearing the date "May 17, 2008" which
attached a T7W-C related to the Assessment (together, the "T7W-C").
As a result of subsection 244(14) of the Act, there is a rebuttable presumption
that the Assessment was mailed on November 7, 2008. The compelling evidence
which rebuts this presumption includes:
1.
The Assessment bears the correct address for Conoco. If the Assessment, which
imposes a liability in excess of $4.6 million, was mailed to Conoco, it would
have been brought to the then Tax Director, Mr. Tim Bryant. Mr. Bryant's files
are well organized. A thorough search was conducted of Mr. Bryant's files and
there is no record of the Assessment. Further, Mr. Bryant is prepared to swear
an affidavit that speaks to his diligent record-keeping and which confirms that
he had no knowledge of the Assessment prior to May 3, 2010. The absence of any
knowledge of the Assessment by the then Tax Director is consistent with the
Assessment not being mailed in 2008.
2.
It is standard practice at Conoco for documents received from the CRA to be
opened, date stamped and filed. A thorough search was conducted and no copy of
the Assessment was located at Conoco. The absence of any record of the
Assessment at Conoco prior to 2010 is consistent with the Assessment not being
mailed in 2008.
3.
It has been common practice in recent years for the CRA to meet with Conoco
shortly before issuing a reassessment in order to discuss discretionary
deductions in light of the pending reassessment. No such meeting occurred (or
was proposed) in connection with the Assessment. The absence of any meeting
with respect to discretionary deductions is consistent with the Assessment not
being mailed in 2008.
4.
The current Tax Director of Conoco, Ms. Lynn Moen, is prepared to swear an
affidavit describing the diligent record keeping practices of Conoco and the
absence of any records that indicate the Assessment was mailed to Conoco in
2008. Such affidavit would further confirm that the first time the Conoco tax
department was informed of the Assessment was in a meeting with the CRA on
April 14, 2010, followed by the receipt of a reproduced copy of the Assessment
by mail on May 3, 2010, and receipt of a reproduced copy of the T7W-C on May
28, 2010. The absence of any awareness of the Assessment by the Conoco tax
department prior to April 2010 is consistent with the CRA not mailing the
Assessment or 17W-C in 2008.
5.
It is regular practice for CRA Collections to contact Conoco regarding payment
of amounts assessed under a new reassessment, in many cases even before Conoco
has received a reassessment. In this case, there was no contact from CRA
Collections in respect of the Assessment in 2008 or 2009. The absence of any
contact from CRA Collections in connection with the Assessment (which imposes a
significant liability against a large corporation that is subject to enhanced
collection procedures under 225.1(7) of the Act) is consistent with the
Assessment not being mailed in 2008.
6.
The T7W-C was addressed to be sent to the attention of the then Tax Director of
Conoco, Mr. Tim Bryant. A thorough search was conducted of Mr. Bryant's files
and there is no record of the T7W-C. The absence of the T7W-C in Mr. Bryant's
Jiles in [sic] consistent with the CRA not mailing either the T7W-C or the
Assessment in 2008.
7.
The T7W-C is also identified as being copied to Brett Wickerson, a member of
the Conoco tax department. A thorough search was conducted of Mr. Wickerson's
files and there is no record of the T7W-C, nor is there any record to indicate
that the T7W-C was ever mailed by the CRA. The absence of the T7W-C in Mr.
Wickerson 's files is consistent with the CRA not mailing either the T7W-C or
the Assessment in 2008.
8.
The CRA has not produced an original copy of Assessment, only a print out
marked "reproduction" of a record stored on a CRA computer. Further,
the CRA has not produced a signed copy of the T7W-C, only a print out of an
unsigned record stored on a CRA computer. The absence of any evidence that
either the Assessment or the T7W-C were mailed in 2008 further suggests that
the Assessment was not mailed in 2008.
9.
As a large taxpayer, Conoco has a Large File Case Manager assigned and has
almost daily contact with CRA auditors, in person, by phone and through
correspondence. CRA officers regularly attend Conoco's offices. Prior to April
2010, at no time did anyone from the CRA indicate that the Assessment had in
fact been issued. Had the CRA mailed the Assessment in 2008, at some point
prior to April 2010, such Assessment would have been mentioned by one of the
team of CRA officers assigned to Conoco. CRA silence with respect to the
Assessment prior to April 2010 strongly points to the conclusion that the
Assessment was not mailed in 2008.
Conoco
did not receive the Assessment or the T7W-C in 2008. The CRA did not act in a
manner consistent with the Assessment being mailed to Conoco: (i) there was no
meeting regarding discretionary deductions; (ii) CRA Collections did not
contact Conoco; and (iii) CRA was silent with respect to the Assessment. In
light of these facts, and in the absence of any evidence that the Assessment
was in fact mailed by the CRA in 2008, the logical inference to be drawn is
that the CRA did not mail the Assessment in 2008.
Based
on the facts, the presumption in subsection 244(14) does not apply. The only
evidence of the CRA mailing the Assessment is in May 2010. The Objection was
duly filed within the 90 limitation [sic] period. We respectfully request that
the CRA provide confirmation that the Objection will be accepted as properly
served and will be processed by CRA Appeals.
[Footnotes
and emphasis deleted]
(Respondent’s
Record, Vol. I of II, Tab 1D, pp. 32-35)
[13]
By letter of reply dated October 12, 2010, Mr. Kassam
responded to Counsel for Conoco as follows:
This
is further to your letter dated September 23, 2010. We advise that our position
remains the same.
ConocoPhillips
Canada Resources Corp.'s (Conoco) Notice of Reassessment for the year ending
November 30, 2000, was produced and mailed on November 7, 2008. At the request
of Conoco, the Canada Revenue Agency reprinted this Notice of Reassessment with
respect to this taxation year on April 26, 2010.
In
light of the fact that the reassessment was produced and mailed on November 7,
2008, the Notice of Objection with respect to the 2000 taxation year forwarded
to the Agency by Conoco under covering letter dated June 7, 2010, does not
constitute a valid Notice of Objection as it was filed outside of the time
provided to do so under subsection 165(1) of the ITA.
In
addition and as indicated in our letter to Conoco dated September 15,2010, the
Minister is prohibited by law to extend the time for a Notice of Objection to
be filed. In the present case more than one year and 90 days has elapsed since
the Notice of Reassessment of November 7,2008 was mailed to your client.
As
indicated before, our records show that the Notice of Reassessment dated
November 7,2008, was sent to your client on that day. On this point, we wish to
advise that a clerical error appears in the first paragraph of the second page
of our letter of September 15, 2010, to Conoco, it should state: "We are
able to trace though our internal mail system that the Notice of Reassessment
was sent out on November 7, 2008." November 30, 2000, is the year end of
the taxpayer for that taxation year and is not the date of the reassessment. We
are assuming that you will communicate this correction to Conoco and we will
not send a correction directly to your client. If you wish us to do so, please
advise.
Last,
I wish to bring to your attention that Conoco did not provide the Agency with a
waiver relating to the Syncrude Remission Order issue. Therefore and as a
result of Conoco's refusal, the Agency issued the reassessment based on
paragraph 12(1)(o) and 12 (1)(x) of the ITA.
(Respondent’s
Record, Vol. I of II, Tab 1E, p. 39)
[14]
Rule 302 of the Federal Courts Rules,
SOR/2004-283, s. 2 (Rules) limits an Application for judicial review to
only a single decision. In the unique circumstances of the present case, I find
that the content of the Minister’s single decision under review is found in the
Minister’s letters of September 15, 2010 and October 12, 2010, in which each
gives a response to submissions in a single act of decision-making.
III. The
Evidence Under Consideration in the Present Review
[15]
There is a limit to the evidence which can be
introduced on judicial review as stated in the decision in Chopra v. Canada
(Treasury Board), (1999) 168 F.T.R. 273 at paragraph 5:
There
is considerable jurisprudence to the effect that only the evidence that was
before the initial decision-maker should be considered by the Court on judicial
review (Franz v. Canada (Min. of Employment & Immigration) (1994),
80 F.T.R. 79 (T.D.) at 80; LGS Group Inc. v. Canada (A.G.), [1995] 3
F.C. 474 (T.D.) at 495 and Via Rail Inc. v. Canada (Human Rights Commission),
[1998] 1 F.C. 376 (T.D.) at 388-389. These decisions are premised on the notion
that the purpose of judicial review is not to determine whether or not the
decision of the Tribunal in question was correct in absolute terms but rather
to determine whether or not the Tribunal was correct based on the record before
it (Brychka v. Canada (A.G.) (1998), 141 F.T.R. 258 at 267). Where
affidavit material is clearly improper, the Federal Court of Appeal ruled that
the material be struck out on motion previous to the hearing of judicial review
(Moldeveanu v. Canada (Minister of Citizenship and Immigration), [1999]
F.C.J. No. 55 (F.C.A.) at para. 13; Deigan v. Canada (Attorney General)
(1996), 206 N.R. 195 (F.C.A.) and McCormick v. Canada (Public Service Staff
Relations Board), [1996] F.C.J. No. 1447 (T.D.).
The cited decision
of Via Rail Inc. v. Canada (Human Rights Commission), [1998] 1 F.C. 376
(T.D.) at paragraph 24, provides the following statement of the nature of
judicial review:
Finally,
as a point of law, I should state that the Federal Court Rules [C.R.C., c. 663]
do not provide for the introduction of fresh evidence on a judicial review
application: Franz v. Minister of Employment and Immigration (1994), 80
F.T.R. 79 (F.C.T.D.). There is good reason for this restraint because as
Justice Simpson noted at page 80 in Franz, "judicial review is
intended to address errors made during the Board's proceedings". In a
similar vein, Justice Muldoon remarked in West Region Tribal Council v.
Booth et al. (1992), 55 F.T.R. 28 (F.C.T.D.), at page 35: "This is not
an appeal on the record . . . but rather a discretionary judicial review upon
application to be supported by affidavits".
Thus, with respect
to Mr. Kassam’s finding of fact that the Assessment was mailed, it is necessary
to clearly understand the evidence he considered in reaching the Decision.
[16]
With respect to the present Application, both
Conoco and the Minister have filed affidavit evidence as they are allowed to do
pursuant to Rules 306 and 307 of the Rules. However, as stated, the
determination of the Application is focussed on the evidence relied upon by Mr.
Kassam in reaching his Decision. Affidavit evidence that post-dates the Decision,
tendered to establish that Mr. Kassam’s finding of fact that the Assessment was
mailed is either supportable or not supportable, is not admissible.
[17]
Conoco’s affiant is its Tax Team Leader, Mr.
Brett Wickerson, who states the position that the Assessment was not provided
to Conoco prior to May 3, 2010. As set out above, Counsel for Conoco, in the
letter of September 23, 2010, placed this position before Mr. Kassam for
consideration in reaching the Decision.
[18]
The Minister’s affiants include Mr. Kassam, who attests
to the considerations he applied in reaching the Decision, and four Canada
Revenue officials who offer post-Decision evidence concerning Canada Revenue’s
record keeping and practices going to establish that the Assessment was, in
fact, mailed on November 7, 2008. In my opinion, for this purpose the evidence
of the officials is not admissible.
[19]
In his affidavit filed in the present
Application, Mr. Kassam re-states his position that the Assessment was mailed
on November 7, 2008, and also states the very relevant information about the
evidence he considered in reaching his Decision:
10.
My decision to reject Conoco’s notice of objection dated June 7, 2010, was made
on the basis that this notice of objection was invalid since the notice of
reassessment with respect to Conoco’s taxation year ending November 30, 2000
was mailed on November 7, 2008, and that the time limit to validly file a
notice of objection with respect to the same had elapsed.
11.
In making my decision in respect of Conoco’s request to serve a notice of
objection on the Minister with respect to the reassessment dated November 7,
2008, I considered the following:
(a)
the letters from Conoco and Conoco's counsel addressed to me, dated June 7,
2010, and September 23, 2010, true copies of which are attached hereto as
Exhibits "B" and "D".
(b)
Delly Tse [sic] verbal debriefing with respect to Conoco's request on September
9, 2010;
(c)
Leanne McGregor's Analysis of Facts and Submissions send [sic] to and received
by Delly Tse on September 9, 2010. A true copy of which is attached hereto as
Exhibit "F";
(d)
Conoco’s notice of reassessment dated November 7, 2008, relating to its
taxation year ending November 30, 2000, a true copy of which is attached hereto
as Exhibit "A."
(e)
The records provided to the Appeals Division by Patrick Cash of the Business
Client Communication System, Summerside, Prince Edward Island, showing proof of
mailing of the reassessment dated November 7, 2008. A true copy of an exchange
of e-mails from Wanda Murin, appeals officer, Appeals Division of the Tax
Service Office, Calgary, and Patrick Cash, the "Machineable Mail
Worksheet" and the "Statement of Mailing" pertaining to the said
notice of reassessment are attached as Exhibit "G".
(Respondent’s
Record, Vol. I of II, Tab 1, p. 4)
With respect to
the content of paragraph 11(c), Ms. McGregor's “Analysis of Facts and
Submissions” is duplicated in ADDENDUM I (Analysis). (Respondent’s Record, Vol.
I of II, Tab 1F, pp. 43-46)
With respect to
the content of paragraph 11(e), the emails, the "Machineable Mail
Worksheet" and the "Statement of Mailing" pertaining to the
notice of reassessment are duplicated in ADDENDUM II (Internal Documents). (Respondent’s
Record, Vol. I of II, Tab 1F, pp. 48-52)
IV. Is the Minister’s Decision Reasonable?
[20]
It is agreed that the standard of review of Mr. Kassam’s
decision is reasonableness. The considerations to be applied in reaching a
conclusion are as follows:
In
judicial review, reasonableness is concerned mostly with the existence of justification,
transparency and intelligibility within the decision-making process. But it is
also concerned with whether the decision falls within a range of possible,
acceptable outcomes which are defensible in respect of the facts and law (Dunsmuir
v New Brunswick, 2008 SCC 9, para. 47).
[21]
The primary feature for the Decision to reject
the Objection is based on a finding of fact that the Assessment was mailed on
November 7, 2008. A principal argument advanced by Conoco is that the Decision
is unreasonable because Mr. Kassam’s finding of fact that the Assessment was
mailed is unsupported by cogent evidence.
[22]
In the Decision, Mr. Kassam makes only two
statements to support his finding that the Assessment was mailed. In his letter
of September 15, 2010 he states that “the latest reassessment date is November
7, 2008” and “we are able to trace through our internal mail system that the
Notice of Reassessment was sent out on November 30, 2000 [sic: November 7, 2008].
And in his letter of October 12, 2010 he states that “as indicated before, our
records show that the Notice of Reassessment dated November 7, 2008 was sent to
your client on that day”.
[23]
In the Decision, Mr. Kassam does not state the precise
evidence that supports the finding of fact that the Assessment was mailed.
Indeed, in his affidavit Mr. Kassam does not state the content of the “verbal
briefing” he received from Ms. Tse, nor does he comment on Ms. McGregor’s
Analysis or the Internal Records mentioned in paragraph 11(e) of his affidavit.
[24]
The transcript of Mr. Kassam’s cross-examination
on his affidavit discloses the process of decision-making undertaken by Mr. Kassam
(Cross-Examination, Applicant’s Record, Vol. 1 of 2, pp. 75-100). Mr. Kassam
confirmed that Ms. McGregor reports to Ms. Tse, and Ms. Tse reports to Mr. Kassam.
Mr. Kassam confirmed that, upon receipt of Ms. Moen’s letter, Ms. Tse asked Ms.
McGregor to prepare an analysis of it, and Ms. McGregor produced two documents:
a draft of a letter of response; and her Analysis with reference to the
Internal Documents that is referred to in the cross-examination as “the
analysis” (Examination, p. 82). It appears that it was Ms. McGregor who generated
the misunderstanding that Ms. Moen’s letter of June 7, 2010 was a request for
an extension of time to file the Objection, which, on its face, it was not.
[25]
With respect to Ms. McGregor’s Analysis and the
Internal Documents, Mr. Kassam confirmed the nature and extent of his
consideration of them as follows:
Q:
When did you first see this analysis?
A:
Just before I signed the letter on sending out the first -- September, whatever
that letter was. Delly would have briefed me about it. My letter dated September
15th. [Exhibit “C”]
Q:
So prior to signing your letter that's attached as Exhibit "C", you
would have reviewed the analysis--
A:
Delly would have briefed me on the analysis.
Q:
Okay.
A:
Delly would have briefed me on the analysis before I signed the letter saying
she analyzed it and she has looked at it.
Q:
So there would be two steps. Leanne would have prepared this? A: For Delly.
Q:
For Delly. And Delly would have briefed you? ~
A:
Yes.
Q:
So before you signed your letter of September 15th--
A:
That's right.
Q:
--you would have been indirectly informed of the contents of this memo from
Delly?
A:
Yes, she would have briefed me, yes.
(Cross-Examination,
p. 83)
[…]
Q:
And when did you first see Leanne McGregor's analysis of facts and submissions
that's attached at Exhibit "F"?
A:
When I was reviewing the contents of my Affidavit.
Q:
And you had no involvement in the preparation of this document?
A:
No.
(Cross-Examination,
p. 85)
[…]
Q:
Sir, continuing with the text of your Affidavit, returning back to the
Affidavit itself, at paragraph 11(e), the third sentence down, you say that it
shows proof of mailing of the reassessment dated November 7th, 2008?
A:
Yes.
Q:
You have no first-hand information that it was mailed. You are relying on what
has been attached as the exhibits to your Affidavit?
A:
That's correct.
Q:
And specifically it's the two documents, the machineable mail worksheet and the
Statement of Mailing?
A:
The e-mail of Patrick Cash and the backup.
Q:
And the backup would be the machineable mail worksheet?
A:
One, two, three pages.
Q:
And the machineable mail worksheet and the Statement of Mailing?
A:
That's correct.
Q:
And each of those and the e-mail are at which exhibit?
[…]
A:
"G".
[…]
Q:
How did you obtain the two attachments and the e-mail ?
A:
They were provided to me by my team leader, Delly, when I was making my
analysis.
Q:
And you hadn’t seen these, the documents prior to this, receiving them during
the course of this process? When you requested them and they were sent by e-mail,
that would have been the first time you saw those two --
A:
That's right.
(Cross-Examination,
pp. 97-98)
Thus, with respect
to producing the September 15, 2010 response to Ms. Moen’s letter of June 7,
2010, Mr. Kassam did not read Ms. McGregor’s Analysis prior to signing the
letter but was briefed on the Analysis by Ms. Tse, and Mr. Kassam did not read
the Analysis before rendering the Decision under review.
[26]
I find that the main conclusion that arises from
the cross-examination is that, in reaching the Decision under review, Mr. Kassam
was not sufficiently engaged with the evidence so as to form an independent opinion
on the evidence, and, therefore, he placed full reliance on Ms. Tse’s opinions
on the evidence in rendering the Decision. Of critical importance in the
present review is that there is no evidence on the record of how Ms. Tse reached
her opinions, what they were, and, indeed, what she said to Mr. Kassam. Thus, I
find that there is no transparent and intelligible justification for Mr. Kassam’s
finding that the Assessment was mailed.
[27]
As a result, I find the Decision is
unreasonable.
ADDENDUM I
ADDENDUM II
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