Docket: 2009-2034(IT)I
BETWEEN:
PATRICK NICHOLLS,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
____________________________________________________________________
Motions
heard on common evidence with the motions of Patrick Nicholls
(2010-2433(IT)APP) and Patrick Nicholls (2010-1587(IT)G) on
March 31, 2011, at Toronto,
Ontario
Before: The Honourable
Justice L.M. Little
Appearances:
|
For the Appellant:
|
The
Appellant himself
|
|
Counsel for the Respondent:
|
Ricky Tang
|
____________________________________________________________________
AMENDED ORDER
Upon motion by the Appellant for:
… reopening proceedings having satisfied the requirement to do so,
sending to the Registry, a copy of the final judgment in T-565-09.
And upon cross-motion by the Respondent for:
1. An Order, pursuant
to paragraph 58(3)(a) of the Tax Court of Canada Rules (General Procedure)(“Rules”),
dismissing the Appellant’s appeal in respect of the Minister’s decision not to
extend the time to file a notice of eligibility for Canada Child Tax Benefit
(“CCTB”) payments under s.122.62(2) of the Income Tax Act (“ITA”).
That issue is properly within the jurisdiction of the Federal Court. The
Federal Court heard the Appellant’s judicial review application on that issue
and dismissed the application with costs on December 7, 2010;
2. In the alternative,
an Order pursuant to subsection 18.16(1) of the Tax Court of Canada Act
(“TCCA”), extending the time within which the Respondent shall file
and serve its Reply to the Notice of Appeal to 60 days from the date of this
Court’s order; and
3. Such further and
other relief as counsel may advise and this Court may deem just;
And upon reading the pleadings and hearing
submissions of the parties;
IT IS ORDERED
THAT:
1. The Appellant’s motion is dismissed;
2. Costs shall be payable
forthwith to the Respondent by the Appellant in the amount of $1,000;
in accordance with the attached
Reasons for Order.
Signed at Vancouver, British Columbia, this 3rd day of June 2011.
“L.M. Little”
Citation: 2011 TCC 287
Date: 20110602
Docket: 2009-2034(IT)I
BETWEEN:
PATRICK NICHOLLS,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
AMENDED REASONS FOR ORDER
Little J.
A. FACTS
[1]
The Appellant is claiming
Canada Child Tax Benefit (“CCTB”) payments in respect of his two children. The
Appellant filed his application for CCTB payments on August 16, 2006 when he
filed his 2005 income tax return. At that time, he claimed benefits for one
child from June 25, 2005 onward and from October 17, 2001 onward for
the other child.
[2]
The Minister of
National Revenue (the “Minister”) accepted the Appellant’s CCTB application for
the 11 months prior to his application and paid him CCTB benefits back to
September 2005. The Minister also exercised his discretion to accept the
late-filed application and paid the Appellant benefits for three additional
months back to July 2005 for one child and 14 additional months back to
July 2004 for the other child. The Appellant wishes to obtain CCTB payments
back to October 2001, but the Minister has refused to accept the application
filed by the Appellant.
[3]
On June 7, 2009, the Appellant
filed a Notice of Appeal to the Tax Court since the Minister refused to grant
him CCTB payments back to October 2001. At the same time, the Appellant sought judicial
review in the Federal Court of the Minister’s decision not to accept the
application beyond July 2004.
[4]
The present appeal was held in
abeyance by Justice D’Arcy of the Tax Court on September 30, 2009 pending a
decision on the judicial review application that had been filed by the
Appellant in the Federal Court.
[5]
Justice Russell of the Federal
Court upheld the Minister’s discretion not to extend the time limit within
which the Applicant could file a notice under subsection 122.62(2) of the Income
Tax Act (the “Act”).
[6]
The Appellant now asks
that the present appeal which was held in abeyance by Justice D’Arcy be
reopened to allow the Tax Court to determine whether he was eligible for the
CCTB payments prior to July 2004.
[7]
In response, the
Respondent has brought a cross-motion to strike the appeal for lack of
jurisdiction pursuant to Rule 58(3)(a) or, in the alternative, issue estoppel.
ISSUES:
[8]
The issues are:
1. Whether the appeal
should be dismissed due to lack of jurisdiction?
2. Whether the appeal
should be dismissed based on the principle of issue estoppel?
3. Whether the
Respondent should be granted an extension of time to file its Reply to the
Notice of Appeal?
B. ANALYSIS AND DECISION
[9]
According to Counsel for the Respondent,
the relevant provisions of the Act are subsections 122.62(1) and
122.62(2):
Eligible Individuals
122.62(1)
For the purposes of this subdivision, a person may be considered to be an
eligible individual in respect of a particular qualified dependent at the
beginning of a month only if the person has, no later than 11 months after
the end of the month, filed with the Minister a notice in prescribed form
containing prescribed information. (Emphasis added)
Extension for notices
(2) The Minister may at any time extend the time for filing a notice
under subsection 122.62(1).
[10]
The Respondent maintains that
subsection 122.62(2) of the Act is a discretionary measure similar to
the fairness provisions contained in the Act to cancel interest and
penalties under subsection 220(3.1), or the ability to accept a late-filed
election under subsection 85(7.1) of the Act. The Respondent then relies
on the jurisprudence to establish that questions regarding the Minister’s
discretion are within the jurisdiction of the Federal Court and not the Tax
Court of Canada.
[11]
The Appellant’s response to this
is that these provisions are irrelevant since he is not asking the Tax Court to
assess the Minister’s discretion. Instead, he is asking the Tax Court to
determine his eligibility for the years in question as the Minister has not
made this determination and the Tax Court has the jurisdiction to do this. The
Appellant’s argument is notwithstanding that he did not apply within 11 months
and notwithstanding that the Minister has not granted extension, he would like
the Tax Court to determine his eligibility.
[12]
I have determined that the Federal Court has the exclusive jurisdiction
to examine the question of the Minister’s discretion. Accordingly, what must be
examined is whether the Tax Court has the jurisdiction to make a determination
of eligibility for CCTB payments where the Minister has not made this
determination first.
[13]
I must, therefore,
determine whether the Appellant can circumvent Parliament’s requirement to
apply for CCTB payments within 11 months of eligibility and the Minister’s sole
discretion to extend this filing period.
[14]
In Nicholls v Canada (Revenue Agency), 2010 FC 1235, Justice Russell of the Federal
Court said at paragraph [1]:
APPLICATION
[1]
This is an application
for judicial review of a decision by the Canada Revenue Agency (CRA) dated
March 9, 2009 (Decision) not to extend the time limit within which the
Applicant could file notice under subsection 122.62(2) of the Income Tax Act
(Act) to be considered as an eligible individual to receive the Canada
Child Tax Benefit (CCTB) for certain months during which CRA was statute-barred
from recovering CCTB benefits already paid to the Applicant’s estranged wife
for their children, Charles and Penny, during the same period. (Emphasis added)
[15]
At paragraph [41],
Justice Russell said:
[41]
As regards the merits, the only
real issue before the Court is whether, on the facts of this case, the Minister
reasonably exercised his discretion under subsection 122.62(2) of the Act not
to extend in the Applicant’s favour the time for the filing of notice under
subsection 122.62(1) of the Act. (Emphasis added)
[16]
At paragraph [45],
Justice Russell said:
[45]
The CRA did not determine which
spouse was entitled to the CCTB payments during the period in dispute. It
simply concluded that the statute-barred payments already made could not be
recovered from Mrs. Nicholls and that it could not
prove that Mrs. Nicholls had made a
misrepresentation that is attributable to neglect, carelessness or wilful
neglect in failing to advise CRA that she was no longer the eligible recipient
for the period in question, so that it would not be reasonable to accede to Mr.
Nicholls’s full claim for payments going back to 2001.
[17]
And at paragraph [49],
Justice Russell said:
[49] … In the present case, it cannot be said that
the CRA policy not to pay CCTB retroactively unless payments already made to
another caregiver can be recovered is an unreasonable basis for the exercise of
the discretion or that the discretion was applied unreasonably in this case.
The policy has a rational basis and it cannot be said that it was applied
unfairly or unreasonably in this case. The Applicant has allowed a situation to
develop whereby CCTBs were made to Mrs. Nicholls
during a period of time when he now says they should have been paid to him. As
the Decision points out, the Applicant has failed to explain why he allowed
this situation to develop by not claiming CCTBs at a time when he says he was
entitled to them. (Emphasis added)
[18]
The Application made by
the Appellant was dismissed by Justice Russell.
[19]
I agree with the
comments made by Justice Russell and I agree with his conclusion.
[20]
It is clear from reading subsection 122.62(1) of the Act,
that it was Parliament’s intent to limit a retroactive application for CCTB
payments to 11 months prior to the application subject to the Minister’s
discretion to extend it. Accepting the Appellant’s interpretation would lead to
the result that taxpayers could undermine this intent by bringing their
application to the Tax Court for all years that were eligible. In an extreme
case, it might be possible to go back 17 years.
[21]
If we examine the Act contextually,
especially the portions relating to Appeals, it is apparent that there is a
general requirement that the Minister must first issue a Determination or
Assessment before an appeal can be commenced in the Tax Court. For example,
sections 171, 169 and 165 of the Act all make reference to the
assessment:
Disposal of Appeal
171.(1) The Tax Court of Canada
may dispose of an appeal by
(a)
dismissing it; or
(b)
allowing it and
(i) vacating
the assessment,
(ii) varying
the assessment, or
(iii)
referring the assessment back to the Minister for reconsideration and
reassessment.
Appeal
169.(1)
Where a taxpayer has served notice of objection to an assessment under section
165, the taxpayer may appeal to the Tax Court of Canada to have the assessment
vacated or varied after either
…
Objections to assessment
165.(1)
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,
…
[22]
Subsections 152(1) and 152(1.1) of the Act establish
the Minister’s duty to assess tax or determine losses. The Minister has the
requirement to assess or determine “with all due dispatch”. Where the Minister
does not issue an assessment or determination, there can be no appeal. The
assessment and the determination are both Ministerial duties and Ministerial
duties are in the realm of administrative law and, as a result, would be within
the jurisdiction of the Federal Court. For example, the jurisprudence has held
that where the Minister fails to assess, the proper recourse is to seek an
order of mandamus compelling the Minister to determine eligibility. This
was the case in Merlis Investments Ltd v MNR, 2000 D.T.C. 6634, where
the court declined to issue the order as the assessment was held up to allow
the GAAR committee to investigate the transaction. Another example is the
decision in Burnett v MNR, 98 D.T.C. 6205. However, in that case the
Federal Court of Appeal did issue the mandamus order.
[23]
The Minister refused to accept the
new application beyond the limitation period contained in 122.62(1). It
therefore follows that there is no determination and there is nothing to appeal
from. The
Applicant’s argument cannot be accepted to circumvent the 11 month limitation
period.
[24]
The Minister has decided not to
accept the Appellant’s late filed application. That is a decision which is
within the discretion of the Minister and the Minister’s discretion cannot be
reviewed, considered or reversed by the Tax Court of Canada.
[25]
The Appellant’s
Motion is dismissed.
[26]
Since I have concluded that the
Tax Court does not have the jurisdiction to hear this appeal, I do not have the
authority to deal with the issue estoppel argument.
Costs
[27]
On March 31, 2011, I
heard these Motions and two other Motions filed by the Appellant. In addition,
the Appellant has filed other Motions before the Tax Court, the Federal Court,
the Federal Court of Appeal and other Courts in Ontario.
The applications made by the Appellant are very similar to the points raised
before me by the Appellant.
[28]
In my opinion, the Appellant
is wasting the time of the Court and wasting the time of the Respondent in
bringing this type of Motion. I award costs of $1,000.00 payable by the Appellant
to the Respondent. The costs are to be payable forthwith.
Signed at Vancouver, British Columbia, this 3rd day of June 2011.
“L.M. Little”
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