Date: 19980605
Docket: APP-274-97-IT
BETWEEN:
2318-2256 QUÉBEC INC.,
Applicant,
and
HER MAJESTY THE QUEEN,
Respondent.
Reasons for Order
Guy Tremblay, J.T.C.C.
[1]
The following facts support the application for an extension of
time. These facts were essentially confirmed by the testimony of
Gilles Roberge, an accountant, André Therrien,
the appellant's principal shareholder, and
Claude Charpentier, an appeals officer from the
respondent's Sherbrooke office. They read as follows:
[TRANSLATION]
(1)
On November 18, 1996 a notice confirming the assessments
made for the 1993 and 1994 taxation years was sent to the
appellant;
(2)
On or about November 26, 1996 the appellant sent its
accountant, Gilles Roberge, the notice of confirmation of
the assessments, dated November 18, 1996;
(3)
The appellant was represented at all times in the instant case by
its accountant, Gilles Roberge, in whom it placed full
confidence; the accountant was responsible for following up on
the file from the audit to the final settlement; he also assumed
responsibility for proceedings at the objection stage and
undertook to retain counsel for the appeal;
(4)
On or about November 26, 1996 the taxpayer's accountant
did contact my office to inquire about the possibility of
retaining my services, though without confirming this, as appears
from the enclosed transmittal
slip . . . .
As Exhibit R-1, 10 pages of documents concerning
the case were transferred to Serge Racine, including the
Notice of Objection.
[TRANSLATION]
(5)
At the same time, the accountant entered into negotiations with a
Revenue Canada representative, Claude Charpentier; however,
these negotiations were unsuccessful and the accountant failed to
contact the law firm to commence the
appeal . . . .
This is confirmed by Gilles Roberge's testimony.
[TRANSLATION]
(6)
On or about February 16, 1997 the time to appeal
expired;
(7)
On or about April 23, 1997 the taxpayer, which believed that
action on its case had been completed, learned as appears from a
letter from Nicole Dion to the taxpayer's accountant
that its case was now at the collection stage rather than at that
of an appeal;
(8)
At this point the accountant consultant again contacted my firm,
on or about May 5, 1997, to confirm the instructions, as
appears from a second transmittal slip . . . .
Exhibit R-2: facsimile from Mr. Roberge to
Mr. Racine of seven documents concerning this matter.
[TRANSLATION]
(9)
On or about June 23, 1997 my firm sent the Court and
Claude Charpentier of the Appeals Division, Sherbrooke
office, an application for an extension of time and a Notice of
Appeal . . . .
However, the Court's stamp shows July 9, 1997 as the
date on which the document was received.
[TRANSLATION]
(10) The lapse
of time between May 5 and June 23, 1997 was due to the
fact that my firm moved and its staff was reorganized at that
time; we moved our premises and hired new staff as of
June 1, 1997;
(11) At all
times relevant hereto the taxpayer acted as a diligent and
responsible individual by entrusting the handling of its case, at
the first available opportunity, to professionals, and the delay
was entirely attributable to those professionals; moreover, the
taxpayer reacted immediately when it learned that its file had
not been dealt with as planned . . . .
This is confirmed by Mr. Therrien's testimony. He said
he was not informed of the respondent's decision to confirm
the assessment until the claim was received, after the appeal
period had expired.
[TRANSLATION]
(12) Revenue
Canada will suffer no loss due to this application for an
extension of time, since in the event that the assessment is
confirmed the taxpayer will be required to pay the accrued
interest;
(13) The
taxpayer has sound arguments to make in support of its appeal and
it would be contrary to the interests of justice to dismiss the
application for an extension of time, which in all justice and
equity should be allowed;
(14) The
respondent was notified of the facts set out in the instant
amended application in a letter dated November 5, 1997 to
Alain Gareau, counsel for the respondent at the time.
Accordingly, may it please the Court:
TO ALLOW this amended application for an extension of time in
which to file an appeal;
THE WHOLE without costs.
Date: [not indicated]
Serge M. Racine, Attorney, M. Fisc.
Counsel for the appellant
3030 Boul. Le Carrefour, Suite 1002
Laval, Quebec H7T 2P5
(514) 688-5400
To:
Registrar
Tax Court of Canada
200 Kent Street
Ottawa, Ontario
K1A 0M1
[2]
As his substantive argument counsel for the appellant maintained
that through its principal shareholder his client had done
everything within its power by entrusting the tax problem to its
accountant, and subsequently to counsel.
[3]
The respondent, for her part, relied on the 1985 decision in
Garry R. Harris (APP-1079(IT)), which
concerned the 1980 and 1981 taxation years. The present wording
of s. 167(5) is different from the provision applicable in
1980 and 1981.
[4]
Section 167(5) of the Act reads as follows:
167. (5) When order to be made. 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.
[5]
The requirement of section 167(5)(a) of the Act has
been met.
[6]
The Court finds that the appellant did in fact instruct someone
to act within the meaning of s. 167(5)(b)(i). There
was a failure, a human error. However, that error did not
eliminate the final condition of the subparagraph: "had a
bona fide intention to appeal". This condition was
clearly met in the instant case. Though counsel was not
officially instructed, he received a notice from the
appellant's accountant in this regard on November 26,
1996 ([1] (4)).
[7]
There are reasonable grounds for the appeal within the meaning of
s. 167(5)(b)(iv) of the Act.
[8]
In the Court's opinion the requirements of
ss. 167(5)(b)(ii) and (iii) of the Act have been
met.
Conclusion
[9]
The application is allowed.
Signed at Québec, Quebec, June 5, 1998.
"Guy Tremblay"
J.T.C.C.
[OFFICIAL ENGLISH TRANSLATION]
Translation certified true on this 16th day of October
1998.
Stephen Balogh, revisor
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