Reed, J.:—There are two main issues in this case. The first is whether subsection 225.1(5) of the Income Tax Act, (R.S.C. 1952, c. 148 as amended to February 25, 1987) requires that a taxpayer personally sign a letter of abeyance or whether such can be signed by an agent on the taxpayer's behalf. The second is whether the Minister of National Revenue can delegate his powers under that subsection to an official of his department. The decision in this case is potentially applicable to a large number of taxpayers.
Subsection 225.1(5) provides:
Notwithstanding any other provisions in this section, where a taxpayer has served a notice of objection under this Act to an assessment or has appealed to the Tax Court of Canada or the Federal Court-Trial Division from the assessment and agrees in writing with the Minister to delay proceedings on the objection or appeal, as the case may be, until judgment has been given in another action before the Tax Court of Canada, the Federal Court of Canada or the Supreme Court of Canada in which the issue is the same or substantially the same as that raised in the objection or appeal of the taxpayer, the Minister may take any of the actions described in paragraphs (1)(a) to (g) for the purpose of collecting the amount assessed, or a part thereof, determined in a manner consistent with the decision or judgment of the Court in the other action at any time after the Minister notifies the taxpayer in writing that
(a) the decision of the Tax Court of Canada in that action has been mailed to the Minister,
(b) judgment has been pronounced by the Federal Court of Canada in that action, or
(c) judgment has been delivered by the Supreme Court of Canada in that action, as the case may be.
[Emphasis added]
The relevant facts are as follows. A letter (an "abeyance letter") was sent, by Revenue Canada on February 25, 1987, to H.N. Thill & Associates (“Thill”), Re: Robert A. Doyle. The letter sought the taxpayer Doyle's consent to have proceedings with respect to his 1984 tax return delayed. It was proposed that proceedings be held in abeyance pending the outcome of other cases which were already before the Court. These other cases raised the same issue as that which was the subject of the dispute between the taxpayer and Revenue Canada, i.e., deductions on account of advance royalty payments for licences to use certain speed reading materials. The letter seeking the taxpayer Doyle's consent was returned to Revenue Canada signifying consent that the proceedings with respect to his return be held in abeyance. The letter was signed on behalf of Mr. Doyle by Mr. Sinclair, a director of Thill.
On January 20, 1989 a judgment in the other cases was rendered by Mr. Justice Joyal: Moloney v. Canada, [1989] 1 C.T.C. 213; 89 D.T.C. 5099 (F.C.T.D.). The judgment was not in the taxpayers' favour. An appeal has been filed.
The Minister is now entitled, pursuant to subsection 225.1(5), to collect the taxes which it is claimed are owing by Mr. Doyle for his 1984 taxation year. Had there been no letter of abeyance signed and had Mr. Doyle himself pursued litigation, as a plaintiff, through the courts the Minister would have been precluded from taking collection action until the litigation was finally disposed of at the appeal level.
Counsel for Mr. Doyle argues, with respect to his client's situation, that: (1) there was never any authority granted to Thill by the taxpayer to sign an abeyance agreement on his behalf; (2) even if such authority was granted it is ineffective because the statute (subsection 225.1(5)) requires that an abeyance agreement be with the taxpayer; (3) in addition, subsection 225.1(5) requires that an abeyance agreement be with the Minister and in this case the relevant letter was not signed by the Minister; it was signed by an officer of the Appeals Division of Revenue Canada (Mr. Gunn).
Scope of Agency Agreement
With respect to counsel's first argument, I have no doubt that Thill was the taxpayer's agent and had been granted sufficient authority by Doyle to sign the abeyance letter in question. The reason for that conclusion will appear clear from the following facts, which facts set out the framework for all three of counsel's arguments.
Thill prepared the taxpayer's 1983 tax return. While Doyle signed that return personally the address listed thereon as his own was Thill's. Thill prepared Doyle's 1984 tax return and again the address given as Doyle's was Thill’s. These are not crucial facts. They merely set the background and demonstrate that Doyle was looking to Thill for considerable guidance in the preparation and filing of his tax returns.
On February 15, 1985, when Doyle signed his 1984 tax return, he also signed the following authorization:
TO: H.N. Thill & Associates Inc.
22 - 1818 Cornwall Avenue
Vancouver, B.C.
The undersigned, in consideration of your acting herein, hereby empowers you and your authorized representatives to represent me as agent (any not by way of legal counsel or in any other professional capacity) with Revenue Canada in respect of any and all disputes arising from the filing of any income tax returns on my behalf and any assessments or reassessments resulting therefrom, and in each case including the power to conclude a binding settlement of such disputes or appeals based on oral or written instructions.
Revenue Canada wrote to Doyle personally sometime prior to the end of April 1985 notifying him that the Minister was disallowing the deductions he had claimed in his 1984 tax return with respect to the advance royalty payments for the licensing of the speed reading materials. That letter also stated that the Minister would be assessing accordingly. Mr. Doyle responded, by letter dated April 30, 1985:
Dear Sir,
I suggest, that you submit all further correspondence regarding my 1984/83 Tax Return to H. N. Till [sic] & Assoc. who have assured me that they are filing a formal objection, but were mystifyed [sic] by your thirty day requirement.
Yours
Robert A. Doyle
Thill wrote to Revenue Canada on May 3, 1985 sending a copy of the agency authorization which Mr. Doyle had signed on February 15, 1985 and informing the Department that no further representations or submissions would be made at that time, on behalf of Mr. Doyle. The letter also asked that the Department please proceed with assessment of Mr. Doyle's return “at the earliest possible instant". An assessment was subsequently made and a notice of objection with respect thereto was filed on May 31, 1985. The notice of objection was signed by the taxpayer personally. The address given on that notice as the taxpayer's was that of Thill. Thill was also described as the taxpayer's “authorized agent".
The issue in dispute respecting the taxpayer's 1984 tax return was also a matter of dispute in 1,736 other tax returns. Negotiations took place between Thill and Revenue Canada and it was agreed that four test cases would be proceeded with through the Federal Court. The fact that some assessments were confirmed and others were held in abeyance at the notice of objection stage is not important for the purposes of this case.
A dispute then arose between Revenue Canada and Thill concerning the appropriate signatory to the abeyance letters. Revenue Canada took the position that the letters of abeyance had to be signed by the taxpayer personally. Thill took the position that the agency authorizations which it held from its clients were sufficient to allow Thill to sign on the client's behalf. Mr. Gunn of Revenue Canada, attests as follows:
4. At all relevant times Thill took the position that Revenue Canada was wrong in its position that the “abeyance letters" had to be signed by the taxpayers and acted on the basis that the abeyance letters were properly executed.
5. In the course of the next month I prepared abeyance letters with respect to all the Notices of Objection held in abeyance and send them to Thill. I had indicated to Thill and Mr. Bruce Benzel in particular that the letter should be signed by the taxpayers and not the representatives.
6. At no time did Thill or its employees agree with my position. All abeyance letters were returned to me, including the letter relating to Robert A. Doyle, a copy of which is attached to this my Affidavit as Exhibit “A”, signed by Thill.
7. At no time did I question the authority of Thill to act as agent for Robert A. Doyle.
Mr. Doyle states that he was never informed about the letter of abeyance, was never consulted about it and did not know of its existence until a few months ago. The evidence from Thill is that they did not consult their clients before signing the letters.
Counsel for the taxpayer argues that the authorization of February 15, 1985 did not authorize Thill to sign the letter of abeyance because the abeyance letter constitutes a binding settlement of a dispute which type of agreement is expressly exempted from the authorization agreement. Alternately, it is argued that the signing of the letter of abeyance is acting "by way of legal counsel” and as such is outside the scope of Thill's authority as being expressly exempted from the authorization agreement. Thirdly, it is argued that even if the action taken by Thill does not fall within the specific exemption clauses of the authorization the signing of the letter can not be held to have been authorized because that action does not fall within the principal grant of authority given by the agreement.
None of these arguments is convincing. A letter of abeyance is not a "binding settlement of the dispute". It merely holds matters in abeyance pending the outcome of other litigation which outcome may lead to the settlement of the taxpayer's claim. But neither the letter of abeyance nor the outcome of the other litigation determines the specific rights or liabilities of the taxpayer who has agreed to have the resolution of his or her dispute delayed pending outcome of the other litigation. Nor do I think that the signing a letter of abeyance by Thill was acting "by way of legal counsel". It was acting on Doyle's behalf but not in a capacity which required that only legal counsel could act. With respect to counsel's third argument, reference was made to Information Circular IC 86-2R2 Guidelines for T-1 Tax Return Preparers, paragraphs 29 and 31. That guideline states that Revenue Canada requires the filing of an authorization before it will discuss a taxpayer's return with anyone other than the taxpayer. That requirement however is not a governing factor with respect to the proper interpretation of the authorization agreement of February 15, 1985. The words of the authorization govern. The authority granted by those words is very broad: “to represent me as agent ... with Revenue Canada in respect of any and all disputes arising from the filing of any tax returns on my behalf and any assessments or reassessments resulting therefrom. . .". In my view there is no doubt that these words encompassed the signing of a letter of abeyance on Doyle's behalf.
Having come to the conclusion set out above it is not necessary for me to discuss the various cases on apparent or ostensible authority which were cited to me: Freeman and Lockyer v. Buckhurst Park Properties (Mangal) Ltd. et al., [1964] 1 All E.R. 630 (C.A.); European Asian Bank A.G. v. Punjab & Sind Bank (No. 2), [1983] 1 W.L.R. 642 (C.A.); Woodhouse A.C. Israel Cocoa Ltd. SA et al. v. Nigerian Produce Marketing Co. Ltd., [1972] 2 All E.R. 271 (H.L.); Jensen v. South Trail Mobile Ltd., [1972] 5 W.W.R. 7; 28 D.L.R. (3d) 233 (Alta C.A.); Cypress Disposal Ltd. v. Inland Kenworth Sales (Nanaimo) Ltd., [1975] 3 W.W.R. 289; 54 D.L.R. (3d) 598 (B.C.C.A.); Cumberland Properties Ltd. v. Canada, [1989] 2 C.T.C. 75; 89 D.T.C. 5333 (F.C.A.); Hawitt v. Campbell and Cameron (1983), 46 B.C.L.R. 260; 148 D.L.R. (3d) 341 (C.A.).
Taxpayer Personally Required to Sign?
More difficult is the issue as to whether subsection 225.1(5) requires the taxpayer to personally sign the letter of abeyance. The argument is that subsection 225.1(5) states that it must be the "taxpayer" which agrees in writing with the Minister to delay proceedings and that that does not authorize agreement being given by an agent on the taxpayer's behalf. Counsel for the defendant referred me to Fortier [No. 2] v. M.N.R., [1969] C.T.C. 554; 69 D.T.C. 5354 (Ex. Ct.); a decision not in his favour. In that case the Court seemed to hold that a provision which required that a copy of a Tax Appeal Board decision be sent to the taxpayer was not satisfied when the decision was sent to an agent of the taxpayer. In addition, reference was made to the fact that the Department's position had always been that taxpayers must personally sign such letters and that notices of objection are always signed, as they were in this case, by taxpayers personally.
Firstly, I note that subsection 225.1(5) does not expressly state that agreements in writing to delay proceedings cannot be signed by an agent of the taxpayer. That subsection is not framed, for example, in a manner analogous to paragraph 150(1)(d) where it is made clear that when the taxpayer is an individual, tax returns must be signed by that individual. Nor is it similar to a provision such as 225.2(1) which specifies that it must be the taxpayer personally who is dealt with except to the extent that a specific alternative is expressly allowed.
Secondly, with respect to the Fortier case, it is clear that the "agent" in that case was not in fact an agent at the time the decision of the Tax Appeal Board was sent — his mandate had expired. The case therefore cannot be taken, on its facts, for a decision dealing with a situation in which an agent was acting for the taxpayer. Also, Noel, J. seemed to be saying at page 557 (D.T.C. 5356) of his decision that the statutory provisions (which required mailing of the decision to the taxpayer) could be departed from if this was done with the express consent of the parties.
Thirdly, with respect to the Department's practice of requiring that taxpayers personally sign letters of abeyance, it is clear, and was agreed by both counsel, that such action cannot constitute estoppel: Bert W. Woon v. M.N.R., [1950] C.T.C. 263; 50 D.T.C. 871; [1951] 1 Ex. C.R. 18 (Ex. Ct.). It may very well be that the Department's position in this regard is taken for a great variety of administrative reasons: the overriding one might be the difficulties which arise in proving agency, scope of authority, ostensible and apparent. Whatever the administrative imperatives might be which dictate the conduct of departmental officials, they do not dictate the interpretation of the applicable statutory provisions. In summary, I have been directed to no authority, either express or implied, which requires that the use of the term "taxpayer" in subsection 225.1(5) of the Income Tax Act be interpreted so as to preclude a taxpayer designating an agent to act on his or her behalf for the purposes of that subsection. I do not think the use of the term "taxpayer" in subsection 225.1(5) has the rigidity which counsel for the plaintiff argues. In my view it should be interpreted as allowing an agent to sign on behalf of a taxpayer providing the agency is well and truly established.
Minister or Assistant Deputy Minister Personally Required to Sign?
With respect to the third argument raised by counsel, there is no disagreement that at common law the powers accorded to a Minister under a statute are frequently such that the authority to delegate those powers is easily implied: P.S. & E. Contractors Ltd. v. Canada, [1989] 1 C.T.C. 184; 89 D.T.C. 5067 (Sask. C.A.) esp. at page 189 (D.T.C. 5070) (2nd column); F. Pica et al. v. The Queen, [1985] 1 C.T.C. 73; 85 D.T.C. 5041 (Ont. S.C.). Absent any statutory provisions I have no doubt that the kind of authority described in subsection 225.1(5) is such that it would be reasonable, indeed almost mandatory, to find that there was an implied intention in the legislation to allow the Minister to delegate that authority to the officials of his or her department. The authority is not such as requires personal attention or agreement of the Minister. Indeed, the thought that the Minister should personally be required to agree in writing with some 1700 taxpayers (who are concerned about the issue to which this litigation alone relates) seems clearly unreasonable. The agreements contemplated by subsection 225.1(5) are not ones of sensitive public policy; they merely have for their purpose the efficient channelling of legal disputes through the appeals division of the Department of National Revenue and through the courts. There is no good reason why abeyance agreements have to be signed by the Minister personally.
Applying the principles set out in the jurisprudence it is clear that the Minister's authority to enter into abeyance agreements pursuant to subsection 225.1(5) is such as to be subject to an implied delegation rule. However, paragraph 221 .(1)(f) of the Income Tax Act specifically authorizes the making, by regulation, of delegations for the purposes of the Income Tax Act:
221. (1) Regulations — The Governor in Council may make regulations
(f) authorizing a designated officer or class of officers to exercise powers or perform duties of the Minister under this Act.
Regulations have been enacted for this purpose. I quote part of them:
900. (1) An official holding a position of Assistant Deputy Minister of National Revenue for Taxation may exercise all the powers and perform all the duties of the Minister under the Act.
(2) An official holding a position of Director-Taxation in a District Office of the Department of National Revenue, Taxation, may exercise the powers and perform the duties of the Minister under
(a) sections 48, 224, 224.1, 224.3 and 233 of the Act;
(b) subsections 10(3) and (7), 13(6), 28(3), 45(3), 58(5), 65(3), 66(12.72), (12.73) and (14.4), 70(6), (9), (9.2), and (9.4), 74(5), 83(3.1), 85(7.1), 91(2), 93(5.1), 96(5.1), 104(2), 109(5), 110(7), 116(2), (4) and (5.2), 125(4), 126(5.1), 127(10), and (5), 162(3), 164(1.2), 190.17(3), 220(4), (4.1), (4.2), and (5), 223(1), 225.2(1), 226(1), 227(10.5), 230(1), (1.1), (3), (7) and (8), 230.1(3) (with respect to the application of subsections 230(3), (7) and (8) of the Act), 231.2(1), 244(4) and 248(9) of the Act;
(3) The Director General, Appeals Branch, the Director, Appeals and Referrals Division, or the Directory, Policy and Programs Division, of the Department of National Revenue, Taxation, may exercise the powers and perform the duties of the Minister under
(a) sections 174 and 179.1 of the Act; and
(b) subsections 164(4.1), 165(3) and (6) and 239(4) of the Act.
(4) An official holding a position of Chief of Appeals in a District Office or in a Taxation Centre of the Department of National Revenue, Taxation, may exercise the powers and perform the duties of the Minister under
(a) subsection 165(3) of the Act other than in respect of appeals to the Federal Court; and
(b) subsections 165(6) and 239(4) of the Act.
Nowhere in these provisions is reference made to subsection 225.1(5) of the Act.
The question in issue therefore is whether, in the face of this “legislative code” of delegations the common law principle of implied delegation has any role left to play. The question is whether it should be assumed that since Parliament has accorded the Governor in Council authority to delegate the Minister's powers and because the Governor in Council has exercised that authority that Parliament intended to remove the implied authority to delegate which the Minister would otherwise possess.
I note first of all that the regulation making authority in subsection 221.(1) is permissive:
The Governor in Council may make regulations ... authorizing a designated officer...
Also, while Assistant Deputy Ministers are authorized by Regulation 900 to exercise all the powers of the Minister under the Act, various directors general of the Department are also empowered to exercise some of these same powers. The specific empowering of officials below the rank of Assistant Deputy Minister to exercise authority with respect to certain sections of the Act does not detract from the general authority of the Assistant Deputies to also exercise that power. Nor would it detract from the authority of the Minister to personally exercise the powers in question should he or she decide to do so. The whole scheme is permissive.
As has already been noted, subsection 225.1(5) is nowhere specifically dealt with in Regulation 900. I have no doubt that the Minister’s power under that subsection can be exercised by an Assistant Deputy Minister pursuant to Regulation 900(1). The question remains whether the failure to specifically deal with subsection 225.1(5) in the regulations which follow 900(1) should be interpreted as meaning that an Assistant Deputy can be the only delegate of the Minister with respect to that subsection. I am not persuaded that it does. I am not persuaded that the general authority conferred on the Assistant Deputy Ministers detracts from the ability to delegate the Minister's powers under subsection 225.1(5) to officials of the department of a lower rank than Assistant Deputy Minister. It may very well be, with respect to the specifically enumerated sections in Regulation 900, that a scheme of delegation which accorded directors general other than those specifically identified in the regulation authority to exercise the Minister's powers pursuant to a specific section would be invalid as in conflict with the regulation. But this issue does not have to be decided. With respect to subsection 225.1(5) of the Act, it is my view that the principles allowing implied delegation to operate apply and that that authority has not been exceeded by allowing Mr. Gunn, an appeals officer, to sign the letters seeking consent to abeyance pursuant to subsection 225.1(5) of the Income Tax Act.
An order will issue in accordance with these reasons.
Application dismissed.
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