McNabb Family Trust v. R., 98 DTC 6001, [1998] 1 CTC 330 (FCA)

Stone J.A.:

This appeal concerns the refusal of the Trial Division, pursuant to subsection 18.1(2) [1] of the Federal Court Act, to extend the time for bringing an application to review and set side a refusal of the Minister’s delegate pursuant to subsection 220(3.2) [2] of the Income Tax Act to extend the time for filing a preferred beneficiary election, on the ground that the reasons for the request “did not fall within the guidelines of the Fairness provisions”.

The evidence suggests that the trustee signed the election form prior to the deadline date and that he passed it to a staff member for posting. It was not, however, posted until some ten days after the deadline had passed.

In Nelson v. Edmonton Institution, (1996), 206 N.R. 180 (Fed. C.A.), Strayer J.A. restated, at paragraph 4, the principal considerations for determining whether an extension of time should be granted:

The main considerations for determining whether an extension of time should be granted are well established in this Court [see e.g. Grewal v. Canada (1985), 63 N.R. 106] and include the following: an intention, formulated within the time limit to take proceedings; the existence of an arguable case; the cause and actual length of the delay, and whether there was prejudiced caused by the delay.

We respectfully agree with the Motions Judge that the “key factor” to be considered here is whether the appellant has an arguable case to present to a reviewing judge. In concluding that there was not such a case, the Motions Judge adopted the reasoning of Cullen J. in Orsini Family Trust v. Revenue Canada (Customs, Excise & Taxation) [1996] 2 C.T.C. 248 (Fed. T.D.), to the effect that the Court should not substitute its decision for that of the Minister’s delegate if it is satisfied that “the decision was made fairly, not arbitrarily or in bad faith”.

A ground for judicial review made available under subsection 18.1(4) of the Federal Court Act is “error of law”. That a search for whether an error of this kind was made in the exercise of a discretionary power may be pursued by a reviewing judge is clear. In this Court’s very recent decision in Barron v. Minister of National Revenue, (1997), 97 D.T.C. 5121 (Fed. C.A.) , at page 5122, Pratte J.A. stated:

The court may intervene and set aside the discretionary decision under review only if that decision was made in bad faith, if its author clearly ignored some relevant facts or took into consideration irrelevant facts or if the decision is contrary to law.

In our view, it is arguable that the statutory delegate erred in law by refusing to extend the time for filing a preferred beneficiary election which had been signed and passed on to the staff by the trustee for posting prior to the filing deadline. It is, of course, for the reviewing judge to determine whether such an error occurred.

The appeal will therefore be allowed with costs, the order of the Trial Division of June 28, 1996 set aside, and the time within which the appellant may commence a judicial review application of the decision in issue extended to and including November 21, 1997.

Appeal allowed.