[OFFICIAL ENGLISH
TRANSLATION]
APPLICATION
UNDER SECTION 305 OF THE
EXCISE TAX ACT (APPEAL)
2002-508(GST)APP
BETWEEN:
LES
INDUSTRIES BONNEVILLE LTÉE,
Applicant,
and
HER
MAJESTY THE QUEEN,
Respondent.
Application
heard on June 10, 2002, at Québec, Quebec, by
the
Honourable Judge Louise Lamarre Proulx
Appearances
Counsel for the
Applicant: Gaétan Drolet
Counsel for the
Respondent: Danny Galarneau
ORDER
Upon application for an Order extending the time within which an
appeal from the assessment numbered 03408710 and dated August 17,
2001, made under the Excise Tax Act may be instituted;
And upon hearing what was alleged by the parties;
The application is granted in accordance with the attached
Reasons for Order, and the notice of appeal received with the application
constitutes a valid notice of appeal if the appropriate filing fees are paid to
the Court Registry no later than September 23, 2002.
Signed at Ottawa,
Canada, this 22nd day of August 2002.
J.T.C.C.
[OFFICIAL ENGLISH
TRANSLATION]
Date:
20020822
Docket:
2002-508(GST)APP
BETWEEN:
LES
INDUSTRIES BONNEVILLE LTÉE,
Applicant,
and
HER
MAJESTY THE QUEEN,
Respondent.
REASONS FOR ORDER
Lamarre
Proulx, J.T.C.C.
[1] This is an application for an extension of time to institute an
appeal from an assessment numbered 03408710 and issued on August 17,
2001. The application is made under section 305 of the Excise Tax Act
(the "Act").
[2] According to the facts set out in the application, on
March 27, 1996, the respondent issued an assessment against the applicant.
On June 21, 1996, the applicant objected to that assessment and many
meetings were held between the parties. On April 25, 2001, learning that
the Minister of National Revenue (the "Minister") was about to render
his decision on the objection, counsel for the applicant asked the Minister for
an opportunity to make representations. A meeting was held on August 17,
2001. However, without counsel for the applicant being informed, an assessment
of GST was issued that same day. It was not until January 21, 2002, at
another meeting, that the applicant learned that the case had been closed with
respect to the GST and that only the QST issue was outstanding.
[3] According to the respondent, on April 25, 2001, counsel for
the applicant communicated with the objections officer and asked whether the
case was closed. On June 5, 2001, the complaints office of Quebec's
Ministère du Revenu informed the respondent's various intervenors that the
instant case no longer needed to be put on hold and that the process of closing
the case could resume. On August 17, 2001, the respondent issued the
applicant a notice of reassessment numbered 03408710.
[4] The applicant's first witness was François Daoust, a
chartered accountant, who operates from his own office. He began to act in the
applicant's current case in 1995. In his view, this was a complex case that
required many meetings with various individuals.
[5] The first exhibits filed as Exhibits A‑1 and A‑2
are letters from Gaétan Drolet, lawyer, to Pierre Loranger, Director,
Ministère du Revenu du Québec. They are dated November 30, 1995, and
February 23, 1996. Exhibit A‑3 is a letter from Mr. Drolet
dated April 11, 1996, which was sent to Gaétan Hallé, Complaints Coordinator,
Ministère du Revenu du Québec. Exhibit A‑4 is a letter dated
July 2, 1996, sent "to whom it may concern", by counsel for the
applicant. Exhibit A‑5 is a letter dated August 29, 1996, from
the office of the Minister of National Revenue to André Bonneville,
president of the applicant. That letter suggested that there would likely be a
positive outcome to the applicant's problems.
[6] In April 2001, the applicant learned that the Government of Quebec
wanted to close the file and make an assessment. Exhibit A‑6 is a
letter or a handwritten note from Mr. Drolet dated April 25. The year
does not appear, but it may be considered that it was 2001. That letter is
addressed to Gaétan Hallé, Complaints Office, Revenu Québec, and requests
a meeting for the purpose of making representations. That meeting was held on
August 17, 2001.
[7] Exhibit A‑7 is a letter dated August 20, 2001,
from Mr. Drolet to Gaétan Hallé, thanking him for the meeting of
August 17. In the letter, he discusses draft assessments of both GST and
QST.
[8] The witness, François Daoust, filed as Exhibit A‑8
a letter from Caroline Daviau, lawyer, dated June 15, 2001, that had
been sent to him. The letter informed the accountant that the assessment would
be varied with respect to the point referred to in the letter. Mr. Daoust
explained that, when he received the notice of reassessment dated
August 17, 2001, he had thought that assessment resolved part of the
problem. He did not think the assessment was supposed to solve all the problems.
That had not been clearly explained to him.
[9] Mr. Daoust stated that, in January 2002, he had met
Ms. Daviau to discuss certain points relating to the applicant.
Ms. Daviau purportedly told him at the time: [translation] "Nothing more can be corrected at the
federal level; the case is closed." He did not understand because he did
not believe the assessment had been issued in that regard.
[10] André Bonneville testified. He has been the president of the applicant for
40 years. He had secured the services of professionals to advise him and
resolve the applicant's GST and QST problems.
[11] Mr. Bonneville stated that he had understood the exact nature
of the assessment of August 17, 2001, at a meeting with Ms. Daviau in
January 2002. He and his advisers asked Ms. Daviau to harmonize the GST
with the QST, and she informed them that it was too late since the GST
assessment had been issued on August 17, 2001.
[12] Mr. Bonneville filed his letter dated January 28, 2002,
to Gaétan Hallé as Exhibit A‑10. That letter explained the
applicant's understanding. It had filed the document on the assumption that it
merely confirmed part of what had been discussed. That was why no objection had
been filed since it was believed that the other parts of the assessment were still
under discussion.
[13] Following the meeting with Ms. Daviau, Mr. Bonneville
immediately wrote to Mr. Hallé, that is, the letter of January 28,
2002 (Exhibit A‑10). This application is dated February 1,
2002, and it was received at the Court on February 4, 2002.
[14] Ms. Daviau and Mr. Hallé testified at the request of
counsel for the respondent. Their version of the facts was not substantially
different from that of the applicant's witnesses. However, with respect, it
should be noted that the explanations given by Ms. Daviau concerning the
numbers and text appearing in the assessment of August 17, 2001, filed as
Exhibit A‑9, were not clear. It is therefore plausible that
Mr. Daoust might also have misinterpreted it.
Conclusion
[15] In my view, the most important element in this case is the letter
of August 20, 2001, filed as Exhibit A‑7. It was a result of
the meeting of August 17, 2001, and it specifically states that the
discussions had dealt with both the GST and the QST. A summary of the substance
of the meeting is provided, and nowhere is it mentioned that only the QST was
at issue. There does not appear to have been a response precisely describing
the situation with respect to the GST. It seems strange that no reference seems
to have been made to the GST assessment that was issued on the day of the
meeting between the applicant, its lawyers, and the agents of Revenu Québec
either at the time of that meeting or after receipt of Mr. Drolet's letter
dated August 20, 2001.
[16] An assessment normally covers all points. Since a number of
advisers were involved in this case and since the Minister's agents did not
clear up the confusion following the meeting of August 17, 2001, it is
plausible that the applicant did not completely grasp the nature of the assessment
issued that same day by other agents of the Minister.
[17] The evidence showed that, as soon as the applicant and its
advisers realized that the assessment had been issued covering all the points
under discussion relating to the GST, they requested an extension of time to
institute an appeal. That intention to appeal existed throughout this case.
[18] The application is accordingly granted.
Signed at Ottawa, Canada, this 22nd day of August 2002.
J.T.C.C.
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