Dubé,
J:—This
application
is
for
an
order
to
set
aside
the
decision
made
by
the
Minister
of
National
Revenue
on
November
30,
1992,
wherein
the
Minister
denied
the
applicant's
request
for
the
cancellation
of
interest.
The
two
grounds
for
this
judicial
review
application
are
first,
that
the
Minister
made
his
decision
without
regard
to
the
facts,
i.e.,
the
interest
levied
upon
the
applicant
arose
primarily
due
to
an
error
on
the
part
of
the
Minister
and
secondly,
that
the
Minister
failed
to
observe
procedural
fairness
in
that
the
amount
of
interest
is
due
to
a
processing
delay
on
the
part
of
the
Minister.
In
a
nutshell,
the
applicant’s
clerk
made
an
arithmetic
error
in
determining
the
total
income
for
1990.
He
did
not
include
annuity
payments
of
$38,803
from
Sun
Life
Canada
in
computing
the
terminal
income
tax
return.
The
information
was
included
and
the
T4RSP
slips
issued
by
Sun
Life
of
Canada
were
attached
to
the
return
but
the
amount
was
not
included
in
the
calculation
for
the
total
income.
By
a
notice
of
assessment
dated
September
9,1991,
the
Minister
assessed
tax
to
the
applicant
based
upon
the
total
amount
of
income
computed
by
the
applicant.
On
September
26,
1991,
the
applicant
requested
a
clearance
certificate
and
by
letter
dated
October
17,
1991,
the
respondent
acknowledged
receipt
and
advised
that
the
request
would
be
processed
as
soon
as
the
relevant
information
had
been
reviewed.
As
a
result
of
that
review,
the
omission
to
include
the
amount
of
$38,803
was
discovered
and
on
December
4,
1991,
the
applicant
was
so
informed.
The
Minister
reassessed
the
applicant
on
May
22,
1992,
with
an
additional
tax
liability
of
$18,713.61
plus
arrears
interest
of
$2,412.04.
It
is
the
latter
amount
that
the
applicant
claims
ought
to
have
been
waived
by
the
Minister
under
the
new
subsection
220(3.1),
a
1991
amendment
which
reads
as
follows:
220(3.1)
The
Minister
may
at
any
time
waive
or
cancel
all
or
any
portion
of
any
penalty
or
interest
otherwise
payable
under
this
Act
by
a
taxpayer
or
a
partnership.
Prior
to
the
1991
amendment,
the
governing
subsection
161(1)
allowed
the
Minister
no
discretion
to
waive
interest
upon
unpaid
tax.
The
liability
for
interest
payable
under
that
section
was
also
beyond
the
authority
of
the
Court
to
cancel
(Rath
v.
The
Queen,
[1982]
C.T.C.
207,
82
D.T.C.
6175
(F.C.A.)
at
pages
208-09
(D.T.C.
6177)).
The
subsection
reads
as
follows:
161(1)
Where
at
any
time
after
the
day
on
or
before
which
a
taxpayer
is
required
to
pay
the
remainder
of
his
tax
payable
under
this
Part
for
a
taxation
year,
(a)
the
amount
of
his
tax
payable
for
the
year
under
this
Part
exceeds
(b)
the
aggregate
of
all
amounts
each
of
which
is
an
amount
paid
at
or
before
that
time
on
account
of
his
tax
payable
and
applied
as
at
that
time
by
the
Minister
against
the
taxpayer's
liability
for
an
amount
payable
under
this
Part
for
the
year.
the
person
liable
to
pay
the
tax
shall
pay
to
the
Receiver
General
interest
at
the
prescribed
rate
on
the
excess
computed
for
the
period
during
which
that
excess
is
outstanding.
[Emphasis
added.]
The
new
subsection
220(3.1)
is
applicable
with
respect
to
penalties
and
interest
from
the
1985
taxation
year
but
no
decision
has
yet
been
released
on
its
interpretation.
At
the
outset,
I
should
point
out
that
it
is
not
for
the
Court
to
decide
whether
the
interest
otherwise
payable
by
the
taxpayer
ought
to
be
waived
or
cancelled.
It
is
within
the
discretion
of
the
Minister.
The
function
of
the
Court
in
this
judicial
review,
as
I
understand
it,
is
to
determine
whether
or
not
the
Minister
failed
to
observe
procedural
fairness
or
erred
in
law
in
making
his
decision,
as
outlined
under
subsection
18.1(4)
of
the
Federal
Court
Act.
A
duty
to
act
fairly,
in
general,
means
a
duty
to
observe
the
rudiments
of
natural
justice
in
the
exercise
of
administrative
functions
(Martineau
v.
Matsqui
Institution,
[1980]
1
S.C.R.
602,
106
D.L.R.
(3d)
385
at
page
630
(D.L.R.
411-12).
At
common
law,
a
duty
to
exercise
procedural
fairness
lies
on
every
public
authority
making
an
administrative
decision
which
is
not
of
a
legislative
nature
and
which
affects
the
rights,
privileges
or
interests
of
an
individual
(see
also
Cardinal
v.
Kent
Institution,
[1985]
2
S.C.R.
643,
D.L.R.
(4th)
44
at
page
653
(D.L.R.
51-52)
and
R.
v.
Miller,
[1985]
2
S.C.R.
613,
24
D.L.R.
(4th)
9
at
pages
623-24
(D.L.R.
17).
It
involves
the
compliance
with
only
some
of
the
principles
of
natural
justice.
Between
judicial
decisions,
and
those
which
are
discretionary
and
policy-oriented,
can
be
found
a
myriad
of
decision-making
processes
with
a
flexible
gradation
of
procedural
fairness
through
the
administrative
spectrum
(see
Martineau,
supra,
note
2,
at
629
(D.L.R.
410)).
The
existence
of
a
duty
to
act
fairly
will
depend
on
the
existence
of
three
factors:
(1)
the
nature
of
the
decision
to
be
made
by
the
administrative
body;
(2)
the
relationship
existing
between
that
body
and
the
individual;
and
(3)
the
effect
of
that
decision
on
the
individual’s
rights
(see
Knight
v.
Indian
Head
School
Division
No.
19,
[1990]
1
S.C.R.
653,
69
D.L.R.
489
at
page
669
(D.L.R.
500)).
A
duty
to
observe
procedural
fairness
need
not
be
expressed
in
explicit
terms
and
it
may
not
be
implied
in
every
case.
It
is
always
a
question
of
construing
the
statutory
scheme
as
a
whole
in
order
to
see
to
what
degree,
if
any,
the
legislator
intended
the
principle
to
govern
(see
Attorney
General
of
Canada
v.
Inuit
Tapirisat
of
Canada,
[1980]
2
S.C.R.
735,
115
D.L.R.
(3d)
1
at
page
755
(D.L.R.
17)).
Applying
these
principles
and
criteria
to
the
case
at
bar,
it
cannot
be
said
that
the
Minister
did
not
act
fairly
towards
this
taxpayer.
The
applicant
was
afforded
full
opportunity
to
make
representations.
The
Minister’s
statutory
delegate
exercising
the
discretion
had
before
him
the
relevant
considerations
on
which
to
base
a
decision.
The
three
departmental
officers
involved,
namely
the
appeals
officer,
the
section
chief
of
the
Appeals
Division
and
the
chief
of
appeals
testified
by
way
of
affidavit
that
they
considered
the
following
facts:
(a)
the
request
made
by
the
applicant
and
the
reasons
therefore
[sic];
(b)
in
filing
its
income
tax
return
for
the
1990
taxation
year,
the
applicant
did
not
include
income
in
the
amount
of
$38,803.03
in
its
computation
of
total
income;
(c)
the
applicant
does
not
dispute
its
tax
liability;
(d)
the
“self-assessing”
system
of
taxation
puts
the
onus
on
the
taxpayer
to
properly
report
income;
(e)
there
are
a
number
of
elective
returns
that
can
be
filed
in
the
year
of
death;
(f)
the
guidelines
established
in
Information
Circular
No.
92-2
and
Internal
Directive
ARD-92-01
dated
April
16,
1992
were
not
met
in
these
circumstances.
The
guidelines
in
question
stipulate
that
the
cancellation
or
waiver
of
interest
is
not
a
widely
available
option
but
is
one
limited
to
circumstances
beyond
the
taxpayer's
control.
Section
5
reads
as
follows:
5.
Penalties
and
interest
may
be
waived
or
cancelled
in
whole
or
in
part
where
they
result
in
circumstances
beyond
a
taxpayer's
or
employer's
control.
For
example,
one
of
the
following
extraordinary
circumstances
may
have
prevented
a
taxpayer,
a
taxpayer's
agent,
the
executor
of
an
estate,
or
an
employer
from
making
a
payment
when
due,
or
otherwise
complying
with
the
Income
Tax
Act:
(a)
natural
or
human-made
disasters
such
as,
flood
or
fire;
(b)
civil
disturbances
or
disruptions
in
services,
such
as
a
postal
strike;
(c)
a
serious
illness
or
accident;
or
(d)
serious
emotional
or
mental
distress,
such
as
death
in
the
immediate
family.
The
respondent's
affiants
were
not
cross-examined
and
their
evidence
has
not
been
otherwise
contradicted.
Therefore,
I
fail
to
see
how
the
Minister
has
not
carried
out
his
duty
to
act
fairly
in
this
matter.
Again,
it
must
be
borne
in
mind
that
the
original
error
was
committed
by
the
clerk
of
the
taxpayer
and
not
by
the
officers
of
the
Minister
and,
since
the
whole
Canadian
income
tax
system
is
based
on
self-assessment,
the
officers
of
the
Minister
cannot
be
blamed
for
not
having
detected
the
taxpayer's
own
mistake
sooner.
As
to
the
second
prong
of
the
application,
namely
the
alleged
processing
delay
on
the
part
of
the
Minister,
the
facts
cited
above
indicate
that
all
steps
were
taken
within
a
fairly
reasonable
time
and
the
affidavits
of
the
three
officers
indicate
the
various
steps
that
had
to
be
taken
within
that
time
frame.
Consequently,
this
application
for
judicial
review
is
dismissed
with
costs.
Application
dismissed.
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