Citation: 2009 TCC 131
Date: 20090306
Dockets: 2007-4859(GST)APP
2007-4861(GST)APP
BETWEEN:
MARC SIMARD,
TRANSPORT LANFORT INC.,
Applicants,
and
HER MAJESTY THE QUEEN,
Respondent.
[OFFICIAL ENGLISH
TRANSLATION]
REASONS FOR ORDER
Tardif J.
[1]
These are two
applications for an extension of the time in which to file a notice of
objection. Since the matters are interrelated, the parties agreed to have them
both heard on common evidence.
[2]
Both matters moved
through the system chaotically, to say the least. This was due to the existence
of other, parallel files, to a certain amount of confusion, but, also, to the
great number of actors. And it was capped by one or more instances of
negligence.
[3]
The contents of the
pleadings, the documentary evidence and testimony suggest several theories
about the cause of the failure to respect the time limits.
[4]
In order to avoid
unhelpful or irrelevant analyses, it is worth reproducing the relevant
provisions of the Act. First of all, subsection 12(4) of the Tax Court of
Canada Act provides as follows:
12(4) The Court has exclusive original jurisdiction
to hear and determine applications for extensions of time under section 45 or
47 of the Air Travellers Security Charge Act , subsection 28(1) of the Canada
Pension Plan , section 33.2 of the Cultural Property Export and Import
Act , section 97.52 or 97.53 of the Customs Act , subsection 103(1)
of the Employment Insurance Act , section 197 or 199 of the Excise
Act, 2001 , section 304 or 305 of the Excise Tax Act , section 166.2
or 167 of the Income Tax Act or section 56 or 58 of the Softwood
Lumber Products Export Charge Act, 2006.
[5]
The evidence refers to
a multitude of dates and conversations and several players. The Applicant
Marc Simard is a very active businessman who ran certain companies.
[6]
At one point, he was
having tax problems. Clearly clueless as to whom to turn to, he followed
the advice of his accountant and retained a lawyer who was elected to the House
of Commons shortly thereafter.
[7]
Since the lawyer's
election meant that he could no longer accept the mandate, the matter or
matters were transferred to another lawyer, who eventually acknowledged that he
lacked the relevant experience and knowledge.
[8]
The delays that gave
rise to the instant applications were characterized by the search for new
lawyers, and by the new law firm's various attempts and initiatives to take the
appropriate action. The situation was complicated by communication problems and
by problems identifying the files. Certain evidence that is essentially intended
to identify the potentially negligent person or persons has been added to the
mix.
[9]
Throughout this time,
the Applicant persists in his intention to exhaust all possible remedies, in
the firm belief that the assessments are without merit.
[10]
The Minister, for his
part, is convinced that the Applicant failed to send the appropriate documents — that is to say, the notices of assessment — to the person who was his lawyer at the
time. He also submits that the Applicant's lack of credibility rebuts the
presumption set out in subsection 335(10) of the Act.
[11]
The Applicant's
position is somewhat nebulous, because he says that he gave any relevant
documents that he received to his lawyers, but also claims that he may not have
received all the documents. In support of this theory, he refers to various
mistakes, changes in his company's head office address, etc.
[12]
I should state, at the
outset, that the evidence disclosed nothing that would cause the Applicant's
testimony to be rejected based on a lack of credibility. He might be
somewhat confused, but he is certainly not the only one, as the Respondent's
explanations are no model of transparency either.
Analysis
[13]
The decision of the
Federal Court of Appeal in Stanfield is highly relevant to the case at
bar:
3 Generally, in determining whether to grant an
extension of time, the four factors listed in Grewal v. Canada (Minister of Employment &
Immigration), [1985] 2 F.C. 263 (F.C.A.) should be
considered. The factors are (1) whether the party seeking the extension has a
continuing intention to pursue the matter, (2) whether the position taken by
the party seeking the extension of time has some merit, (3) whether the other
party is prejudiced by the delay, and (4) whether there is a reasonable
explanation for the delay. The weight to be given to each of these factors will
vary with the circumstances of each case.
4 Counsel for the appellant argues that no extension of
time can be granted if the other party suffers any prejudice at all from the
delay. That is not correct. The question of the existence of prejudice to the
other party, and the nature and extent of the prejudice, is only one of the
factors to be taken into account in deciding whether to grant an extension of
time. In this case, there was evidence of some prejudice to the appellant from
the delay. The Judge did not ignore that evidence. Indeed, it is clear from his
reasons that he was quite aware of it, as well as the relevant jurisprudence.
However, given the nature of the prejudice, the relatively short additional
delay resulting from the order, and the other evidence presented to the Judge
in respect of the Crown's motion, we are not persuaded that the Judge erred in
giving that factor little or no weight.
[14]
At the trial of the
matter, Bell J. had considered the prejudice to the appellant, but nonetheless
decided:
21 This is not a situation in which the Reply has not been
filed because of inadvertence. It is not a situation where the delay is borne
of any personal desire of counsel to be elsewhere. It is not an application
brought after four months of delay. Failure to file a Reply by June 21, 2004
is not the result of any oversight. Whereas some of the authorities are firm in
the tests to be applied to applications for extension of time, and while I have
some sympathy with the submissions of Appellant's counsel, I cannot conclude
that no extension of time should be given in this case. While realizing, if the
motion is denied, that there would be only a presumption that the allegations
of fact in the Notice of Appeal would be true and while that presumption is
rebuttable, the facts surrounding the Appellant's claim are best known to him,
including perhaps, those with whom he was associated in the transactions.
Logically, the Court should be better informed of the circumstances if the
Appellant presents his case in the normal way. This Court must be interested
in fairness and in justice and it appears to me that those objectives are
better served by this case proceeding in the normal fashion.
While Appellant's counsel urges the Court to find that the Respondent had
all facts necessary for the preparation of a Reply, counsel for the Minister
have, according to Wilhelm's affidavit and submissions made at this hearing not
obtained all the information apparently necessary for the preparation of a
proper Reply. . . .
[15]
In Massarotto, Dussault
J. dealt with an issue more similar to the one raised by the Applicant:
3 The applicant argued that he never received or saw the
notice of assessment referred to in paragraph 1 of the Reply to the Application
for an Extension of Time.
. . .
6 The applicant said that it was not until June 1998 that
he learned from Revenu Québec's collections unit that his dealings with Mr.
Bois had been audited in 1996, that he had been assessed in August 1996 and
that he owed about $35,000. The applicant stated that he never met the auditor,
one Jean-Pierre Lemieux, in 1996. He also said that, at the time, no one ever
contacted him about the audit and the subsequent assessment. Mr. Bois did
not tell him about the audit and assessment either.
. . .
16 Thus, not only is the applicant saying that he never
received the notice of assessment, but it also seems that the notice was never
sent to him by the Minister at his own address. Moreover, I note that, in her
Reply to the Application for an Extension of Time, the respondent does not
state that the notice of assessment was sent to the applicant or any other
person. No evidence was adduced on this point: the respondent did not call any
witnesses or file any affidavits.
17 It has been established that an assessment is not
complete, and is therefore not valid, unless a notice is sent to the taxpayer
concerned after the assessment is made. In this regard, reference may be made
to the Exchequer Court's
judgment in Scott v. M.N.R., 60 DTC 1273, [1960] C.T.C 402. More recently, the Federal
Court of Appeal, relying on subsection 152(2) of the Income Tax Act,
reaffirmed this principle in Aztec Industries Inc. v. The Queen, 95 DTC
5235 (at page 5237), [1995] 1 C.T.C. 327 (at page 330). In that case, the
taxpayer, which had made its application out of time as in the case at bar,
alleged not only that it had not received the notice of assessment but also
that no such notice had ever been issued. Hugessen J.A., who rendered
judgment for the Federal Court of Appeal, noted that in such circumstances the
burden of proving the existence of the notice of assessment and the date of its
mailing falls on the Minister, since those facts are normally within his
knowledge and he controls the means of proving them.
. . .
20
However, unlike in the Income Tax Act,
the definition of the word "person" set out in subsection 123(1) of
the Act includes for GST purposes a "partnership". Moreover, as is
the case with income tax, the Act contains a number of presumptions about the
date of an assessment and the date the notice was mailed and received. They are
in subsections 335(11), 335(10) and 334(1). Subsection 335(5) deals with the
affidavit evidence of an officer with respect to the nature and contents of a
document.
[Emphasis added.]
Case comment by David Sherman:
. . .
Indeed, as Judge Dussault pointed out, there are
mechanisms in s. 335 of the Excise Tax Act to simplify the burden
on the tax authorities of proving that an assessment has been issued. Revenu
Québec did not use those provisions to prove delivery of the Notice of
Assessment.
There is a curious corollary to the finding that
the notice of assessment was not delivered to the appellant. Judge Bowman ruled
in Rick Pearson that it followed that Revenue Canada could not take any
collection action on the assessment. In Massarotto, Judge Dussault
cited Rick Pearson as authority for making the same ruling. Technically,
however, such a ruling is outside the Tax Court's jurisdiction, which is
clearly limited in s. 309 to dismissing, confirming or varying an appeal, or,
under s. 304, to granting or dismissing an application for extension of time.
Disputes over collection matters are taken to the Federal Court --
Trial Division by way of application for injunction or similar relief. On the
other hand, given the finding of fact by the Tax Court, one would expect that
the Federal Court would routinely rule that no collection action could be taken
on the assessment, so from a practical point of view the ruling makes sense.
[Emphasis added.]
[16]
In Corsi, Boyle
J. addressed the inherent ambiguity of the postal system. The CRA had
apparently sent the notice of assessment to the wrong address:
[4] Based upon the affidavit evidence received today from
both parties, the chronology of the assessment, objection and appeal can be
summarized as follows. The CRA assessment is dated June 21st, 2004.
The CRA mailed it by Priority Courier on that date to the taxpayer at her
home address. This was not her authorized mailing address properly on file
with CRA for tax purposes.
[5] Canada Post returned that assessment to CRA with a stamp,
indicating it was unclaimed, and a label marked, "Moved/unknown." A
copy of the returned envelope was filed by CRA.
[6] It is apparent from the envelope that someone,
perhaps Canada Post, changed the postal code by hand to an incorrect postal
code. The envelope is also stamped that a card was sent on June 24, a
final notice on June 29 and that the mail itself was returned to the
sender on July 15.
[7] The Crown acknowledged today that, given this state of
affairs, the assessment could not be considered to have been sent to the
taxpayer on June 21, 2004 for purposes of subsection 152(2), nor
could that be the day of mailing for purposes of beginning the 90-day period
within which to file an objection under section 165.
[8] However, from the record it appears that CRA had until
now maintained the June 21, 2004 date was the day of mailing.
[9] Surprisingly, there is no evidence that CRA
did anything with the returned assessment, except keep the envelope. One would
expect at a minimum that the address of a returned package should be
double-checked against the sender's own records, regardless of who the sender
is. Had that been done, the CRA would have realized they had in fact sent it to
the wrong address and hopefully would have sent the assessment to the correct
authorized mailing address they had on file. It seems entirely unacceptable
that when registered mail is returned to CRA as undeliverable they do not even
check they sent it to the correct address.
[10] There was no evidence or explanation of why it was sent to
the taxpayer's home address and
not her authorized mailing address, nor was there an explanation of how CRA
could have used the wrong address, since it is clear from the Crown's affidavit
and the Exhibit "A" printout that CRA's only mailing address for her
is not the address to which they mailed the assessment.
[11] The taxpayer's materials explain that her authorized
mailing address is in fact that of her accountant. Ms. Corsi did not
receive the assessment; she first became aware of it when CRA's collections
group started to make demands for payment.
[12] A copy of the original assessment was then sent to
Ms. Corsi's accountant at his request and with her authorization.
This was in October 2005. More than one year and 90 days had elapsed
since the date of the original mailing of the assessment.
. . .
III. Analysis
[21] The taxpayer instituted an appeal from the assessment with
this Court. In order for the appeal to proceed as a properly instituted appeal,
the Act requires that its objection procedures first be followed. On these
facts, I am unable to conclude that the taxpayer validly filed an objection to
the assessment as required. None was filed within 90 days of either
June 2004 or October 2005, when the assessment was received by the
accountant. One was not even filed within 90 days of when her new counsel
received a copy in November of 2006.
[22] If no objection is filed this Court has no jurisdiction to
hear an appeal from that assessment.
. . .
[26] I have no choice but to grant the Crown's motion and order
that the taxpayer's appeal be dismissed.
[27] However, the facts of this case do raise the question of
whether the CRA ever issued a valid assessment. Indeed, that is the first issue
set out in the taxpayer's Notice of Appeal.
[28] The further question is if a valid assessment was issued,
when was it issued?
[29] If the taxpayer wants to dispute an assessment in the Tax
Court on the basis it is not a valid assessment, the Income Tax Act
nonetheless requires that the impugned assessment be objected to. In this case,
it was not.
[30] It may be that Ms. Corsi can seek a remedy in respect
of the assessment, on the basis it was never valid, in a different court. I
will leave that to the taxpayer and her advisers.
[31] It may also be that Ms. Corsi's remedy
may be in another court, if any of her several professional advisers did not
properly advise her or represent her.
[Emphasis added.]
[17]
Dussault J. dismissed
the application for an extension in Ferrara, because the grounds of the appeal did not satisfy subparagraph 304(5)(b)(iv). Mr. Sherman made the following
comment:
However, Ferrara
neglected to meet the condition in subpara. 305(5)(b)(iv), that
"there are reasonable grounds for appealing from the assessment". The
application for extension of time must be accompanied by a Notice of Appeal
(subsec. 305(3)), which must show a clear basis on which the appeal might be
allowed. If one does not make a case in the Notice of Appeal that is sufficient
to overturn the assessment, the extension of time will not be granted.
Since no reasonable grounds for appealing the
decision had been shown, Judge Dussault dismissed the application for
extension of time.
This case serves as a reminder for anyone
applying for an extension of time to object or appeal. Not only does evidence
have to be provided of the person's intention or inability to act during the
90-day deadline, but enough reasons have to be set out in the Notice of
Objection, or Notice of Appeal, to show that the assessment is likely
incorrect.
[18]
In Schafer, the
Federal Court of Appeal held that the ETA does not require anyone to have
acknowledged receipt of the notice of assessment. Despite their unanimous
position, the judges appeared to be somewhat frustrated with the rigidity of
the rules governing the question. Isaac J.A. stated:
12 . . . Paragraph 304(5)(a) does
not require the Minister to serve the notice of assessment on the taxpayer, personally,
or even that the notice be received by the taxpayer. The paragraph merely
states that the Tax Court shall not hear an application for an extension of
time if it is brought more than one year beyond the expiration of time limited
by subsection 301(1.1). Subsection 301(1.1) states that the limitation period
begins to run ninety days after the notice is "sent." Therefore, the
only requirement is that the Minister demonstrate that the notice was sent.
There is no requirement that the notice be received in order to start the
limitation period running. The language of subsection 301(1.1) is clear and
unambiguous and must be applied regardless of its object and purpose.
13 But even if, contrary to what I have
concluded to be the correct interpretation of "sent" in subsection
301(1.1), and the word "sent" means that the taxpayer must have
received the notice of assessment, then, in any event, subsection 334(1) of the
ETA applies in this case and the respondent is deemed to have received the
notice of assessment on 2 September 1993.
14 The Tax Court considers this
subsection to create a rebuttable presumption as to the date that the notice
was received. With respect, I do not agree.
15 In St. Peter's Evangelical Lutheran Church (Ottawa) v. Ottawa
(City), McIntyre J.
stated as follows:
It is true, of course, that the words
"deemed" or "deeming" do not always import a conclusive
deeming into a statutory scheme. The word must be construed in the entire
context of the statute concerned. . . . Any other conclusion [than a conclusive
deeming provision] would frustrate and break down the whole scheme of the Act
designed specifically to accomplish both the preservation of the heritage of Ontario and the protection of landowners.
The question therefore becomes whether the
conclusion that subsection 334(1) contains a rebuttable deeming provision that
would frustrate the scheme of the ETA.
16 In my respectful view, subsection
334(1) does not create a rebuttable presumption. I have come to this conclusion
for two reasons. The first is the conclusion of Stone J.A. in Bowen
that:
a requirement for the receipt of the
notification would be difficult, if not totally unworkable, from an
administrative standpoint.
I agree that
it would be extremely difficult to administer a scheme in which a notice is
sent by ordinary first class mail that would require the Minister to contact
every person who has been sent a notice of assessment to ensure that they have,
in fact, received it.
17 The second is subsection 335(1) of the
ETA. That subsection sets out the manner of proof for the Minister to
demonstrate that he has indeed sent the notice of assessment to the taxpayer. It
clearly establishes that the onus is on the Minister to establish that he sent
the notice to the respondent. There is no corresponding subsection
detailing how the Minister or the taxpayer is to establish that the taxpayer
received the notice of assessment. The absence of a provision in the ETA
detailing the method of proof of receipt or non-receipt of a notice of
assessment is, in my respectful view, cogent evidence that the deeming
provision is conclusive.
[Emphasis added.]
Sharlow J.A.:
1 I have read in draft the reasons of
Mr. Justice Isaac. I agree with his reasoning and conclusion. I wish only to add
one comment. Ms. Schafer, representing herself in this matter, stated her
argument on the main issue with admirable clarity:
... it is only fair and just to interpret the Excise
Tax Act in a manner that allows a citizen of Canada an opportunity to appeal
an arbitrary third party assessment when she learns of it and not allow Revenue
Canada to hide behind a technical interpretation of laws, that would permit
Revenue Canada not to be subjected to an independent review of its assessments
by the Tax Court.
2 The Tax Court Judge obviously agreed
with the principle underlying Ms. Schafer's argument, as do I,
although I am unable to conclude that the provisions of Excise Tax Act
governing applications for an extension of time can reasonably bear an interpretation
that achieves the result Ms. Schafer seeks. [Emphasis added.]
5 This result has much to
commend it. While doing no substantial violence to the scheme of the Excise
Tax Act relating to assessments and collection, it ensures that a taxpayer
has a chance to challenge an assessment that, through no fault of her own, is
not brought to her notice in time to permit the statutory deadline to be met.
6 The statutory provisions for
assessments, objections and appeals are intended to provide clear rules for determining
when the Minister's obligation to make an assessment is fulfilled, and to
provide procedures by which taxpayers may challenge assessments that may be
mistaken. Parliament has chosen to adopt a rule that makes no allowance for the
possibility, however remote, that the taxpayer may miss the deadline for
objecting or appealing because of a failure of the postal system. I do not
understand why Parliament has chosen to deprive taxpayers of the chance to
challenge an assessment of which they are unaware, but that is a choice that
Parliament is entitled to make.
EDITORIAL COMMENT
This case was a follow-up to the decision of the
Tax Court in Schafer, [1998] G.S.T.C. 7. In that case, the
appellant appealed five of six assessments issued to her for having received
transfers of property from her husband and a golf club corporation controlled
by him. Both her husband and the corporation had GST debts to Revenue Canada.
. . .
At the Tax Court, even though the extension of
time application would normally have had to be made by December 1994, Judge
Bowman found a solution. He ruled that the assessment was never received
by the appellant, and thus that the objection was filed on time because it was
filed within 90 days of the appellant's first receiving a copy of the notice of
assessment.
Although the evidence of Revenue Canada's mailing procedures suggested on
the balance of probabilities that the assessment had been mailed, it
apparently was never received. The most cogent evidence of this was the fact
that the appellant had objected to the other five assessments. There would have
been no reason for her not to object to this one. [Emphasis added.]
There was a difference between this case and two
earlier cases quoted in the Tax Court's judgment, Aztec Industries
and Rick Pearson Auto Transport. In those cases it was ruled that the
assessment had likely never been mailed. Here the Court concluded
that it had been mailed but was never received. This left Judge Bowman
with a problem: how to get around the rule in s. 334 that deems mail to be
received on the day it is posted.
Unfortunately, as I noted in my editorial
comment to the Tax Court ruling, Judge Bowman's solution was to rule that
the word "deemed" in subsec. 334(1) creates only a rebuttable
presumption. This runs counter to the use of the word "deemed"
throughout Canadian tax legislation. The word creates a "statutory
fiction" that decrees that for some particular purpose something shall be
taken as being other than what it is: R. v. Verrette, [1978] 2 S.C.R.
838. Deemed dispositions or deemed dividends in income tax, or deemed
supplies in the GST legislation, are of course not factual dispositions,
dividends or supplies; and to even suggest that because they do not factually
exist, their "deeming" can be rebutted, would be total nonsense. The Income
Tax Act and the Excise Tax Act can only work properly when
"deeming" cannot be refuted by the facts.
The Federal Court of Appeal has now agreed that
the "deeming" in subsec. 334(1) is absolute and does not create a
rebuttable presumption. The Court thus overturned Judge Bowman's ruling, and
ruled that the time for objecting had expired. In doing so the Court of Appeal
has also effectively overruled several income tax cases referred to in the
reasons for decision, such as Antoniou.
While the result is decidedly unfair to the
appellant, the Court of Appeal's view is that its hands are tied. As Madam
Justice Sharlow noted, "I do not understand why Parliament has chosen to
deprive taxpayers of the chance to challenge an assessment of which they are
unaware, but that is a choice that Parliament is entitled to make." A
remedy, if any, will have to come by way of amendment to the legislation.
This puts taxpayers in an impossible situation,
in cases where an assessment or reassessment is mailed but never reaches them
through no fault of their own. The only saving grace is that, in most
cases, the assessment or reassessment is followed by collection action on the
CCRA's part, which effectively alerts the taxpayer to the fact that the
assessment has been issued.
[19]
However, in Schafer,
the Federal Court of Appeal held that, even in cases where there is uncertainty
regarding the receipt of the notice of assessment, receipt is not required in
order for the ETA to apply and for the application for an extension to be
dismissed.
7 In my respectful view, however, the
relevant sections of the ETA clearly state that the time period for filing a
notice of objection begins to run on the date that the Minister sends the
notice of assessment, and that receipt of that notice is not required. . . .
[20]
According to the
decision in Schafer, if the Minister is not able to prove that the
notice of assessment was sent, the Appellant, if credible, is entitled to the
extension.
[21]
Mr. Desgagné's testimony
attests that the law firm of Hickson Noonan was not in possession of the notice
of assessment. As for Transport Lanfort, the meeting took place in early
December (or late November) and the notice of objection was filed [translation] "just after the
holidays", but still within the one-year period contemplated in the Act.
[22]
It is possible that the
Applicant received the notice of assessment but did not act on it. It is also
possible that the notice got lost due to the confusion regarding the address.
[23]
Counsel for the
Respondent therefore submits that, in the case of Transport Lanfort, the
notice of assessment was received and forwarded to counsel, but the notice of
objection was not sent on time.
[24]
As for the matter
involving the Applicant personally, he claims never to have received the notice
of assessment, but merely a payment demand. When counsel asked for that second
notice of assessment, the Minister only sent it after the deadline for sending
a notice of objection had elapsed. The Applicants submit that they should not
suffer a tax prejudice due to the problems that they had as a result of their
lawyer having been elected to the House of Commons.
The relevant provisions
[25]
Subsection 335(10) contains
the presumption that the date indicated on the notice of assessment is the date
on which it was sent:
335. (1) Where, under this Part or a
regulation made under this Part, provision is made for sending by mail a
request for information, a notice or a demand, an affidavit of an officer of
the Agency, sworn before a commissioner or other person authorized to take
affidavits, setting out that the officer has knowledge of the facts in the
particular case, that such a request, notice or demand was sent by registered
or certified mail on a named day to the person to whom it was addressed
(indicating the address), and that the officer identifies as exhibits attached
to the affidavit the post office certificate of registration of the letter or a
true copy of the relevant portion thereof and a true copy of the request,
notice or demand, is evidence of the sending and of the request, notice
or demand.
Mailing date
(10) Where any notice or demand that the Minister is required or
authorized under this Part to send or mail to a person is mailed to the person,
the day of mailing shall be presumed to be the date of the notice or demand.
Extension of time by Tax Court
304. (1) A person who has made an
application under section 303 may apply to the Tax Court to have the
application granted after either
(a) the Minister has refused the application, or
(b) ninety days have elapsed after service of the application under
subsection 303(1) and the Minister has not notified the person of the
Minister’s decision,
but no application under this section may be made after the
expiration of thirty days after the day the decision has been mailed to the
person under subsection 303(5).
How
application made
(2) An application under subsection (1) shall be made by filing in
the Registry of the Tax Court, in accordance with the provisions of the Tax
Court of Canada Act, three copies of the documents filed under subsection
303(3).
Copy to Commissioner
(3) After receiving an application made under this section, the Tax
Court shall send a copy of the application to the office of the Commissioner.
Powers of Court
(4) The Tax Court may dispose of an application made under subsection (1) by
(a)
dismissing it, or
(b) granting
it,
and
in granting an application, it may impose such terms as it deems just or order
that the notice of objection or the request be deemed to be a valid objection
or request as of the date of the order.
When application to be granted
(5) No application shall be granted under this
section unless
(a) the application was made under subsection 303(1)
within one year after the expiration of the time otherwise limited by this Part
for objecting or making a request under subsection 274(6), as the case may be;
and
(b) the person demonstrates that
(i) within the time otherwise limited by this Act for objecting,
(A) the person was unable to act or to give a mandate to act in the
person’s name, or
(B) the person had a bona fide intention to object to the assessment
or make the request,
(ii) given the reasons set out in the application and the circumstances
of the case, it would be just and equitable to grant the application, and
(iii) the application was made under subsection 303(1) as soon as
circumstances permitted it to be made.
(iv) there are reasonable grounds for appealing from the assessment.
[26]
The conditions set out
in subsection 304(5) are not very demanding.
[27]
In the case at bar, it
appears that the Applicant was unable to successfully give a mandate to act in
his name. He relied on several lawyers, who, due to a combination of
circumstances, were unable to file a notice of objection. It is clearly not
this Court's role attribute possible fault or error. It is sufficient to be
able to find that the Applicant was unable to act on the notice of assessment
issued.
[28]
The Applicant's
testimony, validated by his clearly-established habit of relying on legal
advice with respect to tax matters, as well as the evidence as a whole, satisfy
the condition in subparagraph (i). It is certainly clear that the Applicant
intended to object to the assessment.
[29]
The conditions set out
in subsection 304(5) are straightforward and precise:
(i) – …the person was unable to act or to give a
mandate to act in the person's name, or … had a bona fide intention to
object to the assessment or make the request;
(ii) ‑ given the reasons set out in the
application and the circumstances of the case, it would be just and equitable
to grant the application;
(iii) ‑ the application was made as soon as
circumstances permitted it to be made; and
(iv) – there are reasonable grounds for appealing from
the assessment.
[30]
In his notice of
objection dated July 5, 2007, the Applicant sets out the grounds of
his objection to the assessment:
[translation]
Marc Simard formally denies owing any amounts whatsoever to the Ministère
du revenu du Québec for the reasons reported hereunder:
1 – Assessments PQ-2007-9555 and PQ-2007-9556 are personal
assessments regarding Marc Simard by reason of his directorship of Transport
Lanfort Inc.
2 –Revenu Québec claims that the corporation owed it money under
notices of assessment #1575061 and #1580616, which are the subject of a pending
objection.
3 – Moreover, Transport Lanfort Inc. ceased operations in
June 2004. Consequently, the period covered by notices of assessment PQ‑2007‑9555
and PQ-2007-2556 [sic] should be limited to the period from 2003 to June
20, 2004.
4 – In addition, Revenu Québec refused, wrongly or without basis, to
recognize the validity of the ITC claims made by Transport Lanfort Inc. while
it was operating. This ITC disallowance deprived the company of significant
input tax credit rebates to which it was entitled.
5 – Marc Simard will show that the total input tax
credits to which Transport Lanfort Inc. is entitled exceeds the total amounts
claimed in notices of assessment PQ-2007-9555 and PQ-2007-2556 [sic] and
therefore, that once the set-off is effected, Transport Lanfort Inc. has a
credit balance with Revenu Québec.
[31]
On a balance of
probabilities, the requisite conditions have been met. The applications
are accordingly allowed.
Signed at Ottawa, Canada, this
6th day of March 2009.
"Alain Tardif"
Translation certified true
On this 16th day of April 2009
Monica Chamberlain, Reviser
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