Docket: 2010-2824(IT)APP
BETWEEN:
LARRY E GAMBLE,
Applicant,
and
HER MAJESTY THE QUEEN,
Respondent.
____________________________________________________________________
Application
heard on April 21, 2011 at Toronto, Ontario
By: The Honourable
Justice C.H. McArthur
Appearances:
|
Counsel for the Appellant:
|
Judith
Sheppard
|
|
Counsel for the Respondent:
|
Jasmeen Mann
|
____________________________________________________________________
ORDER
Upon application, on behalf of counsel for the Applicant, for an Order
extending the time within which the appeals from the reassessments made under
the Income Tax Act for the 1993, 1994, 1995, 1996 and 1997 taxation
years may be instituted;
And upon hearing the parties and reading
the materials filed;
The
application is allowed and the Applicant shall have until June 15, 2011 to file
a Notice of Appeal. The Respondent shall file a Reply on or before August 5,
2011. Costs are awarded to the Applicant in the amount of $1,000.
Signed at Ottawa,
Canada, this 4th day of May
2011.
“C.H. McArthur”
Citation: 2011 TCC 244
Date: 20110504
Docket: 2010-2824(IT)APP
BETWEEN:
LARRY E GAMBLE,
Applicant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR ORDER
McArthur J.
[1]
This application by Mr.
Gamble is for an Order extending the time to file appeals for his 1993, 1994, 1995,
1996 and 1997 taxation years. The amount of tax in dispute exceeds $13,000,000.00.
A dismissal of the Applicant’s appeal or this application would force him to
declare bankrupt. The assessment arises out of an investment in software
through a Caribbean Island Corporation. The issue is whether the Appellant
demonstrated that he met the conditions in clause 167(5)(b)(i)(A)
and (B) of the Income Tax Act (Act).
[2]
The Minister of
National Revenue took approximately ten years after the Applicant’s Notices of
Objection, to issue a Notice of Confirmation. It contains amongst further
detail the following:
The purchase price and Assumed Debt are window dressing or a sham
and the purchase price must be reduced by the amount of the Assumed Debt since
it is not a cost that is incurred.
[3]
Obviously the Appellant
wonders how the Minister can be absolved from taking ten years after receipt of
the Notices of Objection to file a confirmation.
[4]
The Appellant was
represented by counsel. In examination in chief, the Appellant offered lengthy
evidence to the effect that upon receipt of the Minister’s confirmation (after
ten years) he was just within the 90 day period provided in
subsection 169(1). This is not contested by the Minister. He immediately
called Canada Revenue Agency (CRA) and or the Tax Court of Canada (TCC) and was
advised he had an additional one year period to appeal to the TCC, under
subsection 167(1) which includes clause 167(5)(b)(i)(B).
[5]
Subsection 167(1)
provides for an application to this Court, within one year from the 90 day
period (subsection 169(1)), to extend the time limited to appeal. Mr. Gamble is
just within that one year time limit. Subsection 167(5) 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.
[6]
The Respondent submits
that the Appellant failed to meet two of these conditions: (A) and (B) but does
not take issue that Mr. Gamble does not have reasonable grounds for appeal or
that he is outside the time limit in section 169 of the Act.
[7]
I have no difficulty
finding that the Appellant met (B). He demonstrated a bona fide
intention to appeal. The Respondent called no witnesses. The Appellant
testified on his own behalf.
[8]
Having gone through a
separation from his spouse and moving out of the family, he did not receive or
open the June 2, 2009 confirmation until August 20, 2009. It was far too
complex for him to prepare a Notice of Appeal. Having a few days left to meet
the 90 day 169(1) time limit, he called his lawyer who referred him to a tax
lawyer who was out of town until mid September 2009. He then called and spoke
to an officer of this Court advising him that he wanted to appeal. He was sent
an email package from which he concluded he had an additional 365 days within
which to appeal. I accept these actions as satisfying clause 167(5)(b)(i)(B).
[9]
Now dealing with
clause 167(5)(b)(i)(A), the Appellant testified that through the
period from the end of August 2009 to the end of August 2010, he was
preoccupied with several matters. Firstly, in September and October of 2009 his
time and emotions were completely absorbed with successfully defending a criminal
charge for failing an alcohol breathalyser test. During the remainder of the
period he battled health set backs including heart, eye and stress problems.
[10]
He stated he could
scarcely walk from his kitchen to the bathroom. He did not retain a tax lawyer
because he could not afford one and, he believed that he would regain
sufficient health to be capable of making this application on his own with the
one year following the end of August 2009 which he did, submitting this
application on August 25, 2010, just days before the expiration of the
statutory period.
[11]
Both parties provided
case law. The decision of Hershfield J. Meer v. Canada,
most closely resembles the present case. In Meer:
Mr. Meer [applied] for an order extending the time within which he
could bring appeals. The Crown argued that although Meer brought his
application within the one-year limitation period under the Act, the
application was not brought as soon as circumstances permitted. . . . The Crown
also took issue with the time between when Meer hired counsel and when the
application for an extension of time was brought. Meer indicated this time was
used to obtain information from Revenue Canada and to accumulate evidence required by his lawyers.
[12]
Hershfield J. concluded
that:
The evidence indicated that these were desperate times for Meer and
his companies. He was struggling for economic survival and under those
circumstances he could not reasonably have been expected to do other than what
he did. . . . The reasons and circumstances did not give rise to any injustice
and there was no evidence of dishonesty or prejudice. The reassessment was not
adversely affected by granting the application, and it would have been
inequitable not to allow an extension of time to file the appeal and allow the
assessment to be dealt with on its merits.
[13]
In paragraphs 19 and 20
he stated the following:
[19] The phrase “as soon as circumstances permit” does not preclude
prioritizing what one can reasonably do in a particular time frame. The
question as set down in Pennington v. M.N.R. comes down to what can be
reasonably expected in the circumstances. One does not need to rely on a flood
or imprisonment or hospitalization to argue that circumstances did not permit
filing the application. This is an area of broad discretion. Keeping one’s life
work, one’s business enterprises or one’s financial stake from crumbling is a
circumstance that might reasonably be attended to and relieved before
circumstances can fairly be said to permit the filing of an application for an
extension of time to file an appeal. Accordingly, in respect of the delay
during this period, I find that the application was filed as soon as
circumstances permitted.
[20] . . . The reasons and circumstances here do not give rise to
any asserted injustice. There has been no assertion here of foul play,
dishonesty or prejudice. I can find no cases, nor has the Respondent’s counsel
offered any cases, that would support the contention or give an illustration of
a situation where all the other conditions for the granting of the application
are met and it is still found not just and equitable to grant the application.
The reassessment is not adversely affected by granting
the application except that the reassessments can then be dealt with on its
merits. In these circumstances it strikes me as inequitable not to apply the
principle set down in Seater v. R., [1997] 1 C.T.C. 2204 wherein Judge McArthur
concludes that it is preferable to have a taxpayer’s issues decided on their
merits than having them dismissed for missed time limits in the Act.
[14]
For these reasons including
Hershfield J.’s statements above, I allow the Appellant’s application. The
Appellant shall have until June 15, 2011 to file a
[15]
Notice of Appeal and
the Respondent shall file a Reply by August 5, 2011. Costs to the Appellant are
set at $1,000.
Signed at Ottawa, Canada, this 4th day of May 2011.
“C.H. McArthur”
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