Citation: 2012TCC29
Date: 20120120
Docket: 2011-2681(IT)APP
BETWEEN:
KARL JABLONSKI,
Applicant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR ORDER
V.A. Miller J.
[1]
This is an application
by Karl Jablonski for an Order to extend the time within which he may serve a
Notice of Objection for his 2005 taxation year.
[2]
The Applicant was
represented at the hearing by his son John Jablonski and both he and his son
testified at the hearing.
[3]
The application was
opposed by the Respondent on the basis that it was filed with this Court beyond
the one year and 90 days allowed by the Income Tax Act (the “Act”).
In support of her position, the Respondent filed the affidavit of Bruce
Costigan, an officer in the Toronto Litigation Office of the Canada Revenue
Agency (“CRA”). Mr. Costigan also testified at the hearing.
[4]
According to Mr.
Costigan, the Applicant’s 2005 taxation year was reassessed on July 31, 2008.
The time limit for serving a Notice of Objection on the Minister of National
Revenue (the “Minister”) was October 29, 2008. An application for extension of
time was required to be made to the Minister no later than October 29, 2009.
[5]
It was the Applicant’s
position that he did not receive the Notice of Reassessment for his 2005
taxation year.
[6]
The relevant sections
of the Act are subparagraph 165(1)(a)(ii), section 166.1 and
subsections 166.2(1) and (5). They read, in part:
165. (1) Objections to assessment -- A taxpayer who objects to an assessment
under this Part may serve on the Minister a notice of objection, in writing,
setting out the reasons for the objection and all relevant facts,
(a)
where the assessment is in respect of the taxpayer for a taxation year and the
taxpayer is an individual (other than a trust) or a testamentary trust, on or
before the later of
(ii) the day
that is 90 days after the day of mailing of the notice of assessment;
166.2 (1) Extension of time [to object] by Tax Court -- A taxpayer who has made an application under
subsection 166.1[(1)] may apply to the Tax Court of Canada to have the
application granted after either
(a) the
Minister has refused the application, or
(b) 90
days have elapsed after service of the application under subsection 166.1(1)
and the Minister has not notified the taxpayer of the Minister's decision,
but no
application under this section may be made after the expiration of 90 days
after the day on which notification of the decision was mailed to the taxpayer.
(5) When application to be granted -- No application shall be granted under this
section unless
(a)
the application was made under subsection 166.1(1) within one year after the
expiration of the time otherwise limited by this Act for serving a notice of
objection or making a request, as the case may be; and
History
[7]
In 2005, the Applicant
claimed a charitable donation of $30,000 from his participation in the
Universal Donation Program (“Universal”). The donation consisted of $6,000 in
cash and $24,000 in kind.
[8]
The Minister initially
assessed the Applicant for 2005 by notice dated April 6, 2006.
[9]
By letter dated
September 7, 2006, the CRA informed the Applicant that it was auditing
Universal and it requested that the Applicant complete and return the
questionnaire which was attached to the letter. The completed questionnaire was
returned on or about September 30, 2006.
[10]
According to Mr.
Costigan, in July 2007, the Applicant requested relief from penalties and
interest for the 2005 year. The Applicant was informed by letter dated
September 12, 2007 that his request could not be considered until the
conclusion of the audit on Universal.
[11]
A proposal letter dated
October 22, 2007 was sent to the Applicant to inform him that the audit on
Universal was complete. It was proposed that the charitable donation credits
claimed on his 2005 tax return would be disallowed.
[12]
In a letter dated March
6, 2008, the Minister informed the Applicant that the charitable donation
credits which he had claimed on his 2005 tax return would be disallowed; that
he could object to the reassessment within 90 days after the date of the
reassessment; and, that his request for the cancellation of interest and
penalties was refused.
[13]
I gather from the
documents presented at the hearing that Universal had given the Applicant a
form entitled Notice of Objection. The Applicant dated this form March 28, 2008
and hand delivered it to the CRA Windsor Tax Services Office on April 11, 2008.
[14]
The CRA sent a letter
dated April 29, 2008 to the Applicant wherein it informed him that his
objection filed on April 11, 2008 was not valid because it was an objection to
a decision to reassess his tax return and that a notice of reassessment had not
yet been issued. The letter further informed the Applicant that he could file a
notice of objection once the notice of reassessment was issued. It gave the
time limits for filing a notice of objection.
[15]
The Applicant’s 2005
taxation year was reassessed by notice dated July 31, 2008. The charitable
donation which he had claimed was reduced to nil on the basis that there was no
gift within the meaning of the Income Tax Act.
[16]
In letters dated
October 23, 2008 and February 8, 2010, the CRA informed the Applicant that he
continued to be liable for an outstanding income tax debt arising from the 2005
taxation year.
[17]
All correspondence to
the Applicant from the CRA was addressed to him at 2500 Poplar Crescent, Mississauga, Ontario
(the “Poplar Crescent address”). This address had been given to
CRA by the Applicant on his 2005 income tax return.
[18]
The Applicant agreed
that the Poplar Crescent address was correct and that he has lived
at this address for 25 years.
[19]
The Applicant stated
that he did not receive the notice of reassessment and that he had no
recollection of receiving any of the letters from the CRA.
[20]
It was his evidence
that if he had received the notice of reassessment he would have called his son
to advise him with respect to the notice.
[21]
John Jablonski
reiterated his father’s evidence. He stated that when the Applicant received
mail which he did not understand, the Applicant called him to look at the
documents and to give advice about the documents. John Jablonski stated that
his advice was sought only with respect to the letter dated April 29, 2008.
However, on cross-examination, he stated that he didn’t recall discussing the
April 29, 2008 letter with his father.
[22]
There was no evidence
that would allow me to conclude that the notice of reassessment could have been
sent to an incorrect address.
[23]
Mr. Costigan had charge
of all material produced by the CRA with respect to the Applicant and the issue
which was before the Court. He knew the CRA’s mailing practices and procedures
and he testified to those practices and procedures as they related to the
Applicant.
[24]
I am satisfied that the
notice of reassessment dated July 31, 2008 was sent to the Applicant at the Poplar Crescent address.
[25]
Both the Applicant and
his son testified that the Applicant was ill and that he had the early stages
of dementia.
[26]
Included in the
application for extension of time was a copy of a letter dated July 31, 2011
from George Skocylak, M.D. in which he stated that he has been the Applicant’s
doctor for 32 years and that the Applicant “suffers from a host of medical
problems”. Dr. Skocylak listed several medical conditions suffered by the
Applicant and in the penultimate sentence he stated – “As well, he is beginning
to display the first signs of age-related dementia”.
[27]
I note that none of
these statements amount to proof that the Applicant had a mental incapacity in
2008 when the notice of reassessment was sent. Moreover, it is my view that the
time limits in sections 165, 166.1 and 166.2 are not altered by the mental
incapacity of a taxpayer.
[28]
Hershfield, J. recently
stated the following in Gyimah v. The Queen, 2010 TCC 621:
[37] Further, the Respondent answers
the capacity argument by reliance on the well established law that time runs
from the date of mailing. If receipt is irrelevant then capacity to act is
irrelevant. The Act sets a rule that prevents objections and appeals to
clog up the system forever regardless of the equities. If I cannot act because
the post office fails to deliver an assessment, then my inability to act is no
less excusable if I am unable to act because I am mentally unable to respond,
even if I had received it.
[38] Considering the authorities
she cites, it is difficult for me to take issue with her. She cites Chu v.
Canada[17] for example. In that case
I wrote:
18 However, with respect, the
language of the subject provisions is absolutely, unambiguously clear. It does
not suggest that receipt of the notice of assessment is relevant. Accordingly,
the authorities have found, for example, that proof of failure of the postal
service resulting in a non-receipt does not change the start date of the
prescribed limitation period. This was confirmed by the Federal Court of Appeal
in 2000, in Schafer v. Canada.
Essentially, such decisions frustrate the application of the doctrine of
discoverability. I believe my hands are tied.[18]
[39] Respondent’s counsel seems to be on pretty
safe ground then when the essence of her argument is that if receipt is
irrelevant, what difference does the state of mind of the intended recipient
make? If the receipt is rendered irrelevant by the statute, then understanding
its content or being able to respond are equally irrelevant and this Court has
no jurisdiction to re-write the legislation
[29]
It is unfortunate that the
Applicant may be suffering from dementia.
[30]
In the circumstances of this case,
no notice of objection was served on the Minister; no application for extension
of time was made to the Minister as required by section 166.1; and, the
application for extension of time to this Court was filed beyond the one year
and ninety days allowed by the Act.
[31]
I do not have any discretion to
extend the time for serving a Notice of Objection beyond the one year and 90
days.
[32]
For these reasons, the application
is dismissed.
Signed at Ottawa, Canada, this 20th
day of January 2012.
“V.A. Miller”
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