Citation: 2011 TCC 387
Date: 20110818
Docket: 2011-1211(IT)APP
BETWEEN:
ERIK HESS,
Applicant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR JUDGMENT
Woods J.
[1]
This is an application for some type of extension
instituted by Erik Hess. The nature of the extension being sought is not clear
to me from the notice of application. The first line of the application states:
“I am preparing this request for an extension and notice of appeal under the
General Procedure rules.”
[2]
The Crown has interpreted this as
an application to extend time to serve a notice of objection to a reassessment
made under the Income Tax Act for the 2002 taxation year. The
reassessment is dated June 12, 2006. The Crown opposes the application on the
ground that Mr. Hess failed to request an extension from the Minister within
one year and 90 days from the date of the reassessment as required by
subsections 166.2(5) and 166.1(7) of the Act.
[3]
I do not think that the Crown has
properly interpreted the application, but nothing turns on this. The real issue
is whether Mr. Hess has appeal rights in respect of a charitable donation
claimed in the 2002 taxation year.
[4]
Mrs. Hess, who represented her
husband at the hearing, made two arguments in support of the application.
First, she submits that she made every effort to make the proper tax filings to
preserve her husband’s right of appeal. The situation was made difficult because
of a family tragedy and in part because an objection for another year was being
held in abeyance by the Minister. In essence, Mrs. Hess submits that it would
be inequitable to deny relief.
[5]
In addition, Mrs. Hess submits
that she was granted the relief sought in her own appeal and that the same
relief should be provided to her husband.
Analysis
[6]
It will be useful to
begin with a summary of the relevant dates, which are not in dispute.
-
original assessment –
July 31, 2003
-
possible notice of
objection – March 18, 2004
-
reassessment – June 12,
2006
-
possible notice of
objection – September 25, 2009
-
further notice of
objection – December 2, 2010
[7]
There are two possible
assessments which could be challenged by Mr. Hess, the 2003 original assessment
and the 2006 reassessment.
[8]
As for the original
assessment dated July 31, 2003, it is no longer possible for Mr. Hess to appeal
this assessment because it was nullified when the reassessment was issued. It
is only the reassessment that can be disputed.
[9]
As for the reassessment
dated June 12, 2006, appeal rights have unfortunately been lost because no
action was taken by Mr. Hess in respect of this reassessment until September
25, 2009. Some action had to have been taken by September 10, 2007 which is one
year and 90 days from the date of the reassessment. Nothing was done until two
years later.
[10]
In particular, the
possible action that could have been taken would be to file a notice of
objection or a notice of appeal to this Court, or to apply for an extension of
time to take one of these steps. In either case, the outside date for taking
these steps is one year and 90 days from the date of the reassessment. Clearly,
that was not done and unfortunately the time deadlines have been missed.
(a) Should relief be granted on grounds of fairness?
[11]
Mrs. Hess submits that, regardless
of whether the time limits were missed, relief should be granted because she
was under difficult circumstances and she did not understand the legislative
requirements even though she tried very hard to do so. This is essentially an
argument based on fairness.
[12]
It is not open to me to provide
the relief that Mrs. Hess seeks. I have no doubt that Mrs. Hess tried her best
to preserve her husband’s appeal rights, but this is not a sufficient reason to
grant the relief sought. The time limits in the Act are strict and the
Court is not permitted to waive them on grounds of fairness: Bormann v The
Queen, 2006 FCA 83, 2006 DTC 6147.
(b) Should the relief granted to Mrs. Hess be applied to Mr.
Hess?
[13]
Mrs. Hess’ second argument is that
her husband should be entitled to the same relief that was granted to her.
[14]
Mrs. Hess testified that she and
her husband both claimed charitable deductions that were denied. She has
managed the appeal process for both she and her husband and she objected to the
assessments at the same time.
[15]
Lamarre J. of this Court granted
an order in favour of Mrs. Hess, which is reproduced in part below:
The
application for an extension of time within which a notice of appeal for the
2002 taxation year may be filed is quashed because the Applicant filed a notice
of objection with the prescribed time and there is insufficient evidence to
show that she was subsequently sent a new reassessment;
It
is recommended that the Applicant file a notice of appeal for 2002 on or before
May 15, 2010, […];
[16]
Based on the submissions of the
parties, it appears that Justice Lamarre concluded that Mrs. Hess did not need
an application to extend time because she was within time to appeal to this
Court with respect to the original assessment issued in 2003. The underpinning
of this decision was that Mrs. Hess had filed a notice of objection to the
original assessment and that no further reassessment was issued.
[17]
Mrs. Hess suggests that the same
conclusion should be reached for her husband. She testified that her husband’s
situation is similar to hers and that she did parallel filings for both the
same time.
[18]
The problem with this submission
is that Mr. Hess’ situation is different from his wife’s because a subsequent
reassessment was issued to him in 2006. Lamarre J. concluded that there was
insufficient evidence that a reassessment was issued to Mrs. Hess.
[19]
The relief granted to Mrs. Hess,
which was to allow a notice of appeal for the 2003 assessment, is not available
to Mr. Hess because his 2003 assessment became a nullity once the reassessment
was issued to him in 2006.
[20]
The conclusion that I have reached
is that Mr. Hess cannot now appeal either the original assessment made in 2003
or the reassessment made in 2006. The application will be dismissed, and each
party shall bear their own costs.
Signed at Toronto,
Ontario this 18th day of August 2011.
“J. M. Woods”
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