Citation: 2013 TCC 190
Date: 20130617
Docket: 2012-3736(IT)APP
BETWEEN:
KALDEP GIDDA,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent,
and
Docket: 2012-3738(IT)APP
BETWEEN:
NEELAM GIDDA,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent,
and
Docket: 2012-3739(IT)APP
BETWEEN:
SUNRISE VINEYARDS LTD.,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent,
and
Docket: 2012-3740(IT)APP
BETWEEN:
GIDDA BROS. ORCHARDS LTD.,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent,
REASONS FOR ORDER
C. Miller J.
[1]
The Tax Court of
Canada Act is clear that an appeal to the Tax Court of Canada is initiated
by filing the appeal in the Court Registry. The Income Tax Act (the
"Act") is likewise clear that a taxpayer has 90 days from the
date the Minister of National Revenue (the "Minister") issues a
Reassessment or Confirmation to file such an appeal, failing which the taxpayer
has a further one year to bring an application to the Tax Court of Canada to
extend that 90 day period.
In the case of the four Appellants before me, the application to extend was
brought well beyond the one year and 90 day period. Mr. Kaldep Gidda,
acting for all four Appellants, argues that he mistakenly filed the Appeals with
the Canada Revenue Agency (the "CRA") in Penticton and, based on the Hickerty
v. The Queen
decision, should be allowed to file the Appeals late.
[2]
I will briefly review
the facts. There are two individual Appellants, Kaldep Gidda and Neelam
Gidda and two corporate Appellants, Gidda Bros. Orchards Ltd. and Sunrise
Vineyards Ltd. The timing of their assessments and objections are set out in
the Affidavits of S. Hundal, a CRA officer. The pertinent dates are as follows:
With respect to Kaldep Gidda:
- on December 15, 2008,
Kaldep Gidda objected to the Notices of Reassessment for the 2003 and 2004
taxation years;
- on July 22, 2010, in
response to the Notice of Objection, the Minister confirmed the assessments for
the 2003 and 2004 taxation years;
- on September 17,
2012, Mr. Gidda filed an Application for an Extension of Time at the Registry
of the Tax Court of Canada.
With respect to Neelam Gidda:
- on December 15, 2008,
Neelam Gidda objected to the Notices of Reassessment for the 2003 and 2004
taxation years;
- on July 9, 2010, in
response to Ms. Gidda’s Notice of Objection, the Minister confirmed the
reassessments for the 2003 and 2004 taxation years;
- on September 17,
2012, Ms. Gidda filed an Application for an Extension of Time at the Registry of
the Tax Court of Canada.
With respect to Gidda Bros. Orchards Ltd.:
- Gidda Bros. objected
to the July 23, 2010, Notices of Reassessment for the 2003 and 2004 taxation
years by way of Notice of Objection dated September 29, 2010;
- In response to Gidda
Bros. Notice of Objection, a Notice of Confirmation was issued on March 3,
2011, for the 2003 and 2004 taxation years;
- Gidda Bros. filed an
Application at the Registry of the Tax Court of Canada on September 17, 2012 to
extend the time to file a notice of appeal.
With respect to Sunrise Vineyards Ltd.:
- Sunrise objected to
the July 27, 2010, Notice of Reassessment for the 2003 and 2004 taxation years
by way of Notice of Objection dated September 30, 2010;
- in response to the
Notice of Objection, a Notice of Confirmation was issued on March 3, 2011, for
the 2003 and 2004 taxation years;
- Sunrise filed an
Application at the Registry of the Tax Court of Canada on September 17, 2012 to
extend the time to file a notice of appeal.
[3]
Mr. Gidda, in his Affidavits
filed with the Motion, and also confirmed in his testimony at the hearing,
indicated that he attempted to file the Notices of Appeal for all four
Appellants on a timely basis with the CRA, not with the Tax Court of Canada.
Attached to his Affidavit were copies of brief letters for the two
corporations, such letters appearing to be Appeals, stamped as received at the Penticton office of the CRA on May 9, 2011. With respect to the personal Appeals of Mr.
Gidda and Ms. Gidda, Mr. Gidda’s Affidavits had copies of an appeal letter
addressed to the CRA in Surrey dated August 19, 2010 for Ms. Gidda, and August
20, 2010 for Mr. Gidda. At the hearing of the Application, Mr. Gidda testified
that all four Appeals were personally delivered to the Penticton office
together, presumably in May 2011. This does not appear to accord with his
affidavit. There is no evidence the letters from Mr. Gidda to Surrey regarding
the personal appeals of Mr. Gidda and Ms. Gidda were ever mailed or indeed
received in Surrey. A former collection officer, Ms. Lesnoski, testified that
when she took over the collections file, and discovered that Mr. Gidda believed
he had filed an Appeal at the Penticton CRA office, she checked the appeals’
Registry and found no notification of such.
[4]
Mr. Gidda claims he did
not know there was a difference between the CRA and the Tax Court of Canada,
and did not know where to file, though he did acknowledge that he had seen the
information sheet the CRA sends out to taxpayers, indicating how to appeal. He
also had an accounting firm assist with what he called the first appeal: he was
to deal with the rest of the appeals.
[5]
Mr. Gidda stated in his
Affidavit that he had no prior dealings with the Tax Court of Canada, yet the
Respondent produced two Tax Court of Canada judgments, one in which Mr. Gidda
was the Appellant and the other in which he acted as agent. The Crown also
provided a Federal Court order, effectively ordering Mr. Gidda to be
cooperative with the CRA.
[6]
A review of CRA
officers’ diaries, including Ms. Lesnoski own notations, make it clear that Mr.
Gidda did not always accept mailed notifications from the CRA, did not answer
calls, and at one point, refused to allow CRA officers on his property. It was
also clear that Mr. Gidda had a number of matters on the go with CRA, not just
the Appeals in issue.
[7]
Mr. Gidda presented in
Court as uncooperative, vague and evasive: at times his evidence was
contradictory and outright incorrect. He was initially not even prepared to
give evidence as the Court did not have his religion’s equivalent of the Bible,
and he refused to affirm. He also objected to the Respondent providing its
authorities the morning of the hearing, requesting an adjournment. I found his
attitude obstructionist and uncooperative. I allowed Mr. Gidda to have a friend
sit beside him for moral support, though it became clear that his friend was
really directing Mr. Gidda.
[8]
In his written
submissions, Mr. Gidda raised a number of arguments as to why the applications
should be allowed.
a) First, he relied on
Rules 7 and 9 of the Tax Court of Canada Rules (General Procedure) (the
"Rules"), arguing this gave the Court sufficient leeway to
effectively ignore the time restriction. The Appellant is mistaken. It is the
legislation itself, not the Court’s Rules, which sets the strict time
limit. The Court cannot, by its own rules, usurp Parliament’s authority in this
regard. Subsection 167(5) of the Act is clear – no application can be
made for an extension beyond one year after the 90 day period for filing the appeal
has passed. This is a strict requirement.
b) Second, the Appellant
argued that the requirement to file with the Tax Court of Canada Registry
includes the CRA as part of that Registry, especially where, as here, the CRA
accepts the envelop containing the appeal. "Registry" is a defined
term under the Tax Court of Canada Act and does not include any office
of the CRA under any circumstances. This argument has no merit.
c) Third, the Appellant
argued the CRA had an obligation to advise the Appellant that the Appeal had
been improperly filed and failure to do so cannot deprive the Appellant of his
day in Court. This is akin to the argument that the Courts are bound by the
actions or advice of the CRA. We are not. It is well established that if the CRA
proffers incorrect advice to a taxpayer, and the taxpayer relies on that advice
to his detriment, that does not bind the Tax Court of Canada as to how to
determine the correctness of an assessment. There may be avenues for the
taxpayer to pursue, but asking the Tax Court of Canada to base its judgment on
incorrect CRA advice is not one of them. While this may garner some sympathy,
it cannot override the clear wording of the legislation.
[9]
Having said that, I
turn now to what I consider the Appellant’s main argument, and that is the
reliance on the case of Hickerty to suspend the one year limitation
period in certain circumstances.
[10]
In Hickerty, the
Appellant mailed her appeal to the Tax Court of Canada, but at the wrong
address, and also to the CRA (on advice of a CRA Information Officer) on a
timely basis. She did so before getting the CRA’s information package as to
where to file. Justice Boyle clearly had some sympathy for Ms. Hickerty in
these circumstances and concluded:
12. Thus I return to the question whether the time the Applicant
was under the mistaken misapprehension that she had validly instituted her
appeal is included in the one year grace period. In the circumstances, I am of
the view that the period during which the taxpayer is under a reasonable but
mistaken belief that she has validly instituted an appeal is not included in
the further one year grace period provided for in paragraph 167(5)( a ). This issue does not appear to have
been previously considered by the Court with respect to either late filed
objections or appeals. An interpretation favourable to the taxpayer is
consistent with this Court’s expressed preference to have taxpayers’ tax
disputes heard and resolved on their merits, especially in the absence of any
prejudice to the Crown. To interpret and apply this differently would deprive a
taxpayer of the right to have an appeal that she reasonably believed for a
period of just less than five months to have properly instituted, heard on its
merits, where there was nothing else she could reasonably have been expected to
do during that period. In most cases, the one year period will be a calendar
year plain and simple. However, if a taxpayer mistakenly but reasonably
believes that she has validly instituted an appeal and the other requirements
of subsection 167(5) are met, the one year grace period stops running until the
taxpayer becomes aware, or should have become aware if she is acting and
thinking reasonably, that the intended appeal was invalid. That is, there will
come a point when a taxpayer’s mistaken belief may cease to be reasonable but,
on the facts of this case, it was reasonable for her to continue to so believe
until at least December 10, 2003, even if it may have ceased to be reasonable
by December 10, 2004.
13. This case and this last issue are significantly
different than the issues of awareness and understanding of an assessment, and
of discoverability, considered by the Federal Court of Appeal in the case of H.
M.Q. v. Carlson ,
2002 DTC 6893. In that case, the taxpayer had
not even objected to his tax assessments issued in 1993 until he sought to late
file his objection in 1999, some five years later. The Court of Appeal
concluded he could not be helped because he was “neither diligent nor
reasonable in the way he conducted himself following service of the Notice of
Assessment.”
[11]
What is clear is that
for a taxpayer to avail himself or herself of this suspension of limitation,
the taxpayer must act diligently and reasonably. As I indicated in the
case of Castle v. Canada,
I have some concern with this suspension of time. Clearly, Justice Boyle also
recognized there will be circumstances where a mistaken belief is no longer
reasonable.
[12]
For several reasons, I
have concluded Mr. Gidda was neither diligent nor reasonable such that, even if
I accepted Justice Boyle’s approach in Hickerty, Mr. Gidda does not
fall within this saving proposition. I am not prepared to suspend any time in
calculating the one year limitation for the following reasons.
[13]
Firstly, Mr. Gidda presented
as evasive and uncooperative. I have serious doubts whether the August 20
alleged letter of appeal was even ever received by the CRA. If Mr. Gidda
treated the CRA, as his attitude in Court might suggest he would have, I have
serious doubts about a good deal of what Mr. Gidda had to say actually occurred
between him and the CRA.
[14]
Second, Mr. Gidda was
aware of how to appeal. I simply do not believe him when he says he did not
understand there was a difference between the Tax Court of Canada and the CRA.
He acknowledged receiving the information package from CRA indicating how to
appeal. He had been in the Tax Court of Canada twice before. He had an
accountant looking at matters for him. It is unreasonable in these
circumstances to suggest there was any real mistaken belief of where to file.
[15]
Thirdly, and
importantly, unlike Ms. Hickerty, he did not attempt to file with the Tax Court
of Canada.
[16]
Finally, he did not act
diligently as he had ongoing communications with the CRA, though never
evidently asked into his Appeal. Also, when the CRA attempted to contact him,
he would avoid them. Had he acted reasonably, returned calls and generally
cooperated, he would have found out within the one year and 90 day period
that no appeals had been validly filed. He did not so act.
[17]
No, Mr. Gidda’s
circumstances are far different from Ms. Hickerty’s. I have not been persuaded
that his mistaken belief was reasonable. The Applications of all four
Appellant’s are indeed beyond the mandatory one year limitation period as set
out in subsection 167(5) of the Act, and their Applications must be
dismissed.
Signed at Ottawa, Canada, this 17th day of June 2013.
"Campbell J. Miller"
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