Date:
20020725
Docket:
2001-4579-GST-G
BETWEEN:
JOZO (JOE)
KOVACEVIC,
Appellant,
and
HER MAJESTY
THE QUEEN,
Respondent.
Reasons
for order
Bonner,
T.C.J.
[1]
The Minister of National Revenue (the "Minister")
assessed the Appellant under s. 323 of the Excise Tax Act
(the "Act") on October 31, 1996. On December 15, 1996, the
Appellant objected to the assessment.
[2]
The Respondent asserts that the Minister confirmed the assessment
under ss. 301(3) of the Act and that on May 8, 1998,
the Minister sent to the Appellant by registered mail a notice of
his decision. If that is what happened then this appeal, which
was instituted by the filing of a Notice of Appeal on
December 21, 2001, must be dismissed because it was
instituted after the expiry of the 90-day period laid
down by s. 306 of the Act. The Respondent moved for
dismissal on that ground.
[3]
The Appellant has brought a cross-motion for summary judgment
allowing the appeal and for a declaration that the Minister's
Notice of Decision was not mailed to the Appellant as required by
the Act, s. 301(5), and is therefore a nullity.
[4]
In support of the Appellant's cross-motion, there was filed
the affidavit of the Appellant, sworn April 29, 2002. At page 2,
paragraph 4 he states:
"On or
about May 4, 2001, I was informed by a Collections Officer of
Canada Customs and Revenue Agency that I was liable, as a
Director of the Business, for unremitted GST. This was the first
time I became aware that my Notice of Objection had purportedly
been considered or disallowed. At no time did I receive a Notice
of Decision in respect of my Notice of
Objection."
This evidence
was not shaken on cross-examination.
[5]
Based on this evidence, the Appellant argues that the onus is on
the Respondent to establish that the Notice of the Minister's
decision was sent as required by ss. 301(5) of the Act.
The Appellant relies on the decision of the Federal Court of
Appeal in Aztec Industries Inc. v. the Queen, 95 DTC 5235.
In that case the Court considered onus in relation to the
requirement in ss. 152(2) of the Income Tax Act that
the Minister send notice of an assessment to the taxpayer. The
Court reasoned:
"Where
as in the present case, a taxpayer alleges not only that he has
not received the notice of assessment but that no such notice was
ever issued, the burden of proving the existence of the notice
and the date of its mailing must necessarily fall on the
Minister; the facts are peculiarly within his knowledge and he
alone controls the means of adducing evidence of them. A number
of statutory provisions recognize the Minister's burden in
this respect and are clearly designed to alleviate
it."
The present
situation is analogous in relation to the onus of establishing
whether notice was sent in accordance with ss.301(5) of the
Act.
[6]
The Respondent filed the affidavit of Joe Poletto, an officer of
the Canada Customs and Revenue Agency (the "Agency") in
order to establish the sending of the Notice of Decision. The
affidavit reads in part:
"...
5.
In or around May 8, 1998, I prepared a Notice of Decision that
was intended to respond to the Notice of Objection as filed by
Mr. Kovacevic.
6.
The Notice of Decision was addressed to Jozo Kovacevic at 561
Kevedon Mews, Mississauga, Ontario, L4Z 1G3.
7.
The address of the Notice of Decision corresponded to the address
provided on the Notice of Objection.
8.
The Notice of Decision was approved by my Team Leader and
submitted for signing by the Assistant Director of Appeals,
Ken Fox.
9.
The Notice of Decision was approved and signed by Mr. Fox on
May 15, 1998. Attached and marked as Exhibit "C"
to this my affidavit is a true copy of the Notice of Decision
dated May 15, 1998.
10.
It is the policy and practice of the Agency to then forward the
Notice of Decision to a clerk who arranges for the Notice of
Decision to be sent my (sic) registered mail. The method of
delivery is indicated on the Notice of Decision by the typed word
"registered" on the face of the Notice of
Decision. Attached and marked as Exhibit "C" to
this my affidavit is a true copy of the Notice of Decision dated
May 15, 1998. The word "registered" is recorded
in the top left corner.
11.
It is the policy and practice of the Agency to indicate the date
of mailing by registered mail by date stamping the Notice of
Decision with the mailing date. The date stamp of this Notice of
Decision indicates the date of mailing as May 15, 1998. Attached
and marked as Exhibit "C" to this my affidavit
is a true copy of the Notice of Decision dated May 15, 1998,
showing the date stamp in the top, left corner.
..."
[7]
Mr. Poletto was cross-examined on his affidavit by counsel for
the Appellant. That cross-examination established that Mr.
Poletto's actual knowledge of the Notice of Decision in this
case ended when he put the document in his team leader's
in-basket prior to receipt of the approval mentioned in paragraph
8 of the affidavit.
[8]
Although Mr. Poletto does not suggest that he has direct personal
knowledge with respect to subsequent events that is not in my
opinion fatal to the Respondent's position. It is clear that
Mr. Poletto is familiar with the policy and practice of the
Agency. His evidence of the state of Agency records, in
particular the date stamp on the Notice of Decision, establishes
on the balance of probabilities the fact that the Notice of
Decision was sent as required by the Act on May 15,
1998.
[9]
In Schafer v. The Queen, [1998] G.S.T.C. 60, my colleague
Bowman, J. (as he then was) noted:
"In a large organization, such as a government department, a
law or accounting firm or a corporation, where many pieces of
mail are sent out every day it is virtually impossible to find a
witness who can swear that he or she put an envelope addressed to
a particular person in the post office. The best that can be done
is to set out in detail the procedures followed, such as
addressing the envelopes, putting mail in them, taking them to
the mail room and delivering the mail to the post
office."
[10] The present
case may usefully be compared with my decision in
Mr. Kovacevic's income tax appeal. In that case, there
was no evidence that the Notice of Assessment ever reached the
mail room.
[11] It is not
necessary to consider the question of whether the Appellant would
have been entitled to summary judgment allowing the appeal if the
Minister had failed to send the Notice of Decision to the
Appellant. I will observe however in passing that in such a case
the Appellant's remedy would have been to launch an appeal
under s. 306 of the Act following expiry of the 180-day
period.
[12] The
Appellant, in paragraphs 14 and 15 of the written outline of
argument, states:
14.
By request dated September 20, 2001, the Appellant, pursuant to
section 303 of the Excise Tax Act, sought an extension of the
time to challenge the Assessment.
Reference:
Notice of Appeal, GST Matter, paragraph 8.
15.
By Notice of Decision dated November 22, 2001, the Respondent
denied the Appellant's request for an extension of time, thus
giving this court jurisdiction to consider whether a Notice of
Determination was ever mailed by the Respondent to the Appellant
in response to his Notice of Objection.
Reference:
Notice of Appeal, GST Matter, paragraph 9.
There is
confusion here. Section 303 of the Act has no bearing. The
Minister considered the objection, confirmed the assessment and
properly notified the Appellant pursuant to ss. 301(5). It is the
appeal which is late. No proper application for extension of the
time for appealing was made under s. 305 presumably because
the one-year period in paragraph 305(5)(a) had expired
long before September 20, 2001.
[13] An order
will therefore be issued quashing the appeal with costs to the
Respondent.
Signed at
Ottawa, Canada, this 25th day of July 2002.
T.C.J.
COURT FILE
NO.:
2001-4579(GST)G
STYLE OF
CAUSE:
Jozo (Joe) Kovacevic and H.M.Q.
PLACE OF
HEARING:
Toronto, Ontario
DATE OF
HEARING:
May 8, 2002
REASONS FOR
JUDGMENT BY: The Honourable Judge Michael
J. Bonner
DATE OF
JUDGMENT:
July 25, 2002
APPEARANCES:
Counsel
for the Appellant: Howard Winkler
Counsel
for the
Respondent:
Brent Cuddy
COUNSEL OF
RECORD:
For the
Appellant:
Name:
Howard Winkler
Gowling, Lafleur, Henderson
Firm:
For the
Respondent:
Morris Rosenberg
Deputy Attorney General of Canada
Ottawa, Canada
2001-4579(GST)G
BETWEEN:
JOZO (JOE)
KOVACEVIC,
Appellant,
and
HER MAJESTY
THE QUEEN,
Respondent.
Motion heard
on May 8, 2002 at Toronto, Ontario by
the
Honourable Judge Michael J. Bonner
Appearances
Counsel
for the
Appellant:
Howard Winkler
Counsel
for the
Respondent:
Brent Cuddy
ORDER
Upon application by the Respondent
for an Order;
a)
Dismissing the Appeal pursuant to paragraph 58(3)(b) of
the Tax Court of Canada Rules (General Procedure)(the
"Rules");
b)
Dismissing the Application for an Extension of Time in which to
file a Notice of Objection;
and for
ancillary relief;
And upon application by the Appellant for summary judgment
allowing the appeal of the Appellant and for a declaration that
the Notice of Decision in this matter was not mailed to the
Appellant as required by the Excise Tax Act and as such
the Notice of Decision is a nullity and for ancillary
relief;
And upon reading the affidavits of the Appellant and of Joe
Poletto filed and hearing counsel for the parties;
And no application to extend time having been made;
It is ordered that:
1.
The application of the Appellant is dismissed.
2.
The application of the Respondent is allowed and the appeal is
quashed.
3.
The Respondent shall have her costs of the appeal including both
motions.
Signed at
Ottawa, Canada, this 25th day of July 2002.
T.C.J
Email this Content