Citation: 2008 TCC 457
Date: 20080808
Docket: 2005-1851(IT)G
BETWEEN:
MAHVASH LECHCIER-KIMEL,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR ORDER
McArthur J.
[1]
This motion by the
Respondent is for an Order dismissing this appeal herein, with costs. At the
hearing, I granted an Order to the Respondent, abridging the time to file and
serve its motion record, despite the objection of counsel for the Appellant.
The Appellant was reassessed under subsection 160(1) of the Income Tax Act
for the 1990 taxation year, in the amount of $172,822 in July 2002.
[2]
The facts upon which
the Respondent relies are clearly set out in a lengthy affidavit of Donna
Dorosh, filed in its motion record. Ms. Mboutsiadis appeared on behalf of the
Respondent and Mr. Finder appeared alone as counsel for the Appellant, not
having been able to notify his client.
[3]
It appears that the
Notice of Appeal was filed with the Court on June 6, 2005, the Reply to the
Notice of Appeal was filed and served on August 3, 2005, and an Answer to the
Reply was filed and served on or around August 22, 2005.
[4]
Because the Appellant
had not taken certain procedural steps, a status hearing was scheduled for
June 8, 2006. Prior to the hearing, Mr. Finder was appointed as counsel by the
Appellant, and the Court ordered dates for completion of certain procedural
steps, upon consent of both parties.
[5]
The Respondent served a
list of documents before the July 14, 2006 deadline, but the Appellant did not.
By letters dated August 16, 2006, September 18, 2006 and November 6, 2006,
the Respondent reminded counsel for the Appellant that the list of documents
had not been filed. Further, on November 15, 2006, the Respondent advised
the Appellant that she would move to dismiss the appeal on February 7, 2007,
for delay. The Appellant served her list of documents on February 2, 2007, and
the motion was withdrawn.
[6]
The Court ordered a show
cause hearing for March 22, 2007. By letter dated March 20, 2007, the Court
agreed to issue an Order confirming a new timetable, upon consent of both
parties. The Order reflected:
(i)
the Appellant to file
and serve a list of documents by March 29, 2007;
(ii)
examinations for
discovery to be completed by May 29, 2007; and
(iii)
undertakings to be
satisfied by June 29, 2007.
[7]
The Appellant missed
the examinations for discovery deadline but filed her answers on written
examination, with no Order of the Court to extend the time.
[8]
Counsel for the
Appellant and the Appellant’s husband attended a pre‑hearing conference
on January 16, 2008, without having filed a pre-hearing brief, although having
twice been advised to provide same by letters from the Court’s hearing coordinator.
The pre-hearing conference proceeded in any event, and by Order dated January
23, 2008, the Appellant was ordered to file and serve an Amended Notice of
Appeal within 60 days. Once again, this Order was ignored, resulting in
the cancellation of a continuation of the pre-hearing conference scheduled for
June 23, 2008, and rather, this motion was heard.
[9]
Apparently, counsel for
the Appellant was unable to contact his client, and he therefore appeared
alone. His request for an adjournment was denied, and as mentioned above, I granted
leave to the Respondent to file and serve its motion record having in mind that
by way of Order dated April 29, 2008, the parties were informed of the
continuation of the pre‑hearing conference on June 23, 2008. It would
appear that the Appellant had no intention of attending on June 23, 2008
because her lawyer was unable to reach her, although counsel for the Respondent
had spoken to Mr. Finder on June 5, 2008, about the motion to dismiss.
[10]
I commend Ms.
Mboutsiadis for her relentless yet fair persistence in her many attempts to
have the Appellant prosecute her appeal within the Rules of the Tax Court
of Canada.
[11]
With respect to
dismissal of appeals, Hamlyn J. in D’Abbondanza v. R. is often cited
for the following:
8 It is the responsibility of the appellant to prosecute
his appeals without delay and with due dispatch within the prescribed rules. The
appellant in these appeals has not been proactive but merely reactive. The
appellant has not filed the list of documents in accordance with the rules nor
in compliance with a specific Court order. The explanation given, as reviewed,
is without merit.
9 The total effect of the appellant’s conduct of the
appeals is by deliberate intentional action to delay the prosecution of the
appeals.
10 The conclusion is that the appellant has not provided a
reasonable excuse for non compliance nor has he made any attempt whatsoever to
comply with the rules or the order of this Court, as such this Court is left
with no alternative but to dismiss the appeals in relation to the 1986, 1987,
1988 and 1989 taxation years.
[12]
In addition, the
Respondent’s Book of Authorities included eight cases, most of which resulted
in dismissal of the appeals for lesser delays and infractions than in the
present case. Some of the paragraphs highlighted by the Respondent include the
following:
From United Color & Chemicals Ltd.
v. R.
8 To paraphrase a now famous Canadian quote, the record of
the Appellants is of “delay, delay, delay”. It is one which the Appellants’
counsel has aided and abetted.
9 There is no acceptable valid reason or excuse for an
adjournment of these appeals. The request for an adjournment is dismissed in
respect of both appeals.
10 For the foregoing reasons, and on the basis of the failure
by both Appellants to prosecute their appeals on January 19, 1998, the appeals
are dismissed. The Respondent is awarded a full set of party and party costs
against each Appellant.
From Ho v. R.
9 … In determining whether an appeal should be dismissed, it is
necessary to consider whether the taxpayer has made any attempt to comply with
the Rules or an Order of the Court or has provided a reasonable excuse for
non-compliance. In this particular case, both Appellants were represented at
the status hearing, were aware of and understood the directions made by the
Court and I am satisfied, in each case received the Order of Bowie J. dated May
17, 1999. Since that time they have chosen to completely ignore the Order and
their failure to comply with it constitutes a deliberate and inexcusable delay.
From Bourque v. R.
41
For a year, the appellant displayed a flagrant
breach of his obligations before this Court. Continued tolerance of such
actions could cause prejudice to the due administration of justice. It is trite
law that an abuse of process can, in appropriate circumstances, lead to the
dismissal or the stay of proceedings (see Yacyshyn v. R., [1999]
F.C.J. No. 196 (Fed. C.A.)
paragraph 18).
…
43 The appeals are therefore dismissed for failure to
prosecute in accordance with section 64 and paragraph 91(c) of the Rules.
[13]
Also, as in Lichman
v. R.,
the Appellant has shown little attempt to comply with the Respondent’s repeated
requests. The taxpayer has had a cavalier attitude including a disregard for
Court Orders and Procedures, while counsel for the Respondent has made serious
efforts to accommodate her.
[14]
After these conclusions,
the next logical step would appear to be to dismiss the appeal with costs to
the Respondent, yet I would be remiss in not considering the following
troubling matters.
[15]
I commence with the
premise that it is in the best interest of justice that the appeal be heard on
its merits. The Appellant’s counsel stated he was unable to reach the Appellant
and she was unaware of this motion.
[16]
Further, the history of
this appeal has two sides and the Respondent’s actions should also be
scrutinized. Briefly, the Respondent’s position is the following. The Appellant’s
husband purchased a matrimonial home in March 1989 for $3,713,000. In May 1990,
he transferred it to the Appellant (his wife) for $2 at a time when the
Respondent states it had an equity of $1,110,000 and, he, the transferor, was
liable to pay tax of $172,822. The Appellant states that the home had no equity
in May 1990, and that the transferor had no tax obligations. For unknown
reasons, the Appellant was not assessed under subsection 160(1) of the Act
until July 2002, an unexplained delay of over 12 years. The delay makes it
very difficult for the Appellant to challenge the original assessment as
permitted in Gaucher v. Her Majesty the Queen, or to
establish the market value of her home as of May 1990. Further, the Reply to
the Notice of Appeal was inadequately drafted in the first instance, and
an application to amend had to be made.
[17]
The unacceptable
conduct of the Appellant and her representatives is partially balanced by the
Respondent’s delays. I believe that the seriousness of her intentions to pursue
her appeal, and the Respondent’s time wasted can be best dealt with by an award
of costs. Justice is better served by a hearing on the merits than a dismissal
on procedural grounds.
[18]
In conclusion, the
Respondent’s motion for an Order dismissing the appeal is denied. Costs are fixed
at $5,000 payable by the Appellant to the Respondent, by September 30, 2008,
and as requested by counsel for the Appellant, an Amended Notice of Appeal shall
also be filed by September 30, 2008, and the Respondent may file a Reply to the
Amended Notice of Appeal by October 30, 2008.
[19]
If the Appellant does
not comply with the terms of the Order in the matter by September 30, 2008, the
appeal from the reassessment made under subsection 160(1) of the Income
Tax Act for the 1990 taxation year shall be dismissed.
Signed at Ottawa, Canada, this 8th
day of August 2008.
“C.H. McArthur”
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