Citation: 2008TCC339
Date: 20080703
Docket: 2007-3271(IT)I
BETWEEN:
INNOVATIONS ET INTÉGRATIONS
BRASSICOLES INC.,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
[OFFICIAL
ENGLISH TRANSLATION]
REASONS FOR JUDGMENT
Tardif J.
[1] This is a
rather unusual appeal in that the Appellant was already successful under a
judgment rendered on October 25, 2005, and amended on
December, 1, 2005, by the Honourable Justice Bédard of this Court.
[2] Upon enforcing
the judgment (Docket 2004‑2805(IT)I) pertaining to the reassessment dated
December 9, 2003, in respect of the 2001 taxation year, the Appellant
realized that it was being penalized to the extent of $7,000 because the matter
had been heard under the Informal Procedure instead of the General Procedure.
[3] The instant
appeal pertains essentially to the $7,000 that the Appellant was unable to
recover under the first judgment.
[4] The parties to
the litigation are the same, as are the nature and purpose of the litigation.
The judgment rendered on October 25, 2005, and amended on
December 1, 2005, was the outcome of a dispute regarding scientific
research and experimental development expenses. The Honourable Justice Paul Bédard
accepted the Appellant's arguments and allowed its appeal.
[5] The matter in
question was heard under the Informal Procedure contemplated in section 17
of the Tax Court of Canada Rules (Informal Procedure).
[6] Under that
provision, the amount in issue cannot exceed the $12,000 limit. Above that
limit, the matter is subject to the General Procedure. In the case at bar, the
matter was handled under the Informal Procedure.
[7] The distinction
between the two types of procedure is not trifling in any respect, nor is it
without consequences. The differences can be seen not only in the costs, but also,
inter alia, in the rules of evidence, which are stricter under the
General Procedure than they are under the Informal Procedure.
[8] Generally, the
parties are informed about the limit and the differences between the two
procedural schemes, especially when the amount in issue is close to the
threshold.
[9] In fact, in the
case at bar, the issue was first raised by the Respondent further to the Appellant's
Notice of Appeal, was referred to again in the Reply to the Notice of Appeal,
and was cited at the beginning of the hearing before the Honourable Justice Bédard.
[10] Despite the
issue being raised, the matter was never changed over to the General Procedure.
The Appellant pleads ignorance, claiming that it would have requested the
change if it had obtained all the information needed to make an informed
choice.
[11] Firstly,
ignorance is not an excuse, and secondly, the Appellant's agent, a person
who has no trouble expressing himself, and who was clearly able to understand
and, more importantly, assess and analyze the situation, did not intervene — a fact that could
certainly be interpreted as a tacit acceptance of the status quo.
[12] In other words,
the agent for the Appellant might, and I am only saying that he might, have
assessed the situation and played the ignorance card on the basis that a loss
under the Informal Procedure would have been less onerous with respect to
costs, its chances of recovering the full amount in issue in the reverse
scenario being equally possible, or even equally probable. Unfortunately for
the Appellant, the Respondent refused to grant it the full amount in
issue. These remarks obviously have no effect on the instant matter.
[13] Coming back to
the issue at hand, it is clear that the matter should have proceeded under the
General Procedure. Who is to blame for this poor choice, or this mistake?
[14] The question is
moot at this level because, unfortunately, judgments are sometimes rendered
without basis in law, or on the basis of irrelevant provisions, even though the
Court is required to comply with and apply legal rules provided they have not
been challenged on the grounds of unconstitutionality or Charter violations.
[15] The role of the courts
is not to make laws, but essentially to apply and comply with the laws enacted
by Parliament.
[16] First of all, a
court of first instance renders a decision, and then, at the initiative of one
or both of the parties, an appellate court can be seized of the matter.
In fact, that is the reason for the existence of appellate courts, whose
mandate is, among other things, to quash or vary decisions of the lower courts,
or even order a new trial, where the decision at first instance is found to be
invalid.
[17] In the case at
bar, the Appellant did not bring an appeal from the judgment within 30 days
after December 1, 2005, the date on which the amended judgment was pronounced.
[18] A party that
feels aggrieved after the Court has disposed of a matter and has rendered a
judgment has access to a certain number of remedies.
[19] First of all,
the party can take measures to have one or more patent errors, which have no
effect on the substance of the judgment, corrected; in fact, the judgment
was amended on December 1, 2005, at the Appellant's request.
[20] Under certain
circumstances, and subject to specific conditions, a party may ask that a
matter be reopened, especially where new evidence is discovered after the trial
and the affected party is above reproach.
[21] However, the
principle of res judicata clearly states that once a matter has been decided, it
cannot be decided a second time. The Federal Court of Appeal recently spoke to
this point in Armstrong:
The right of appeal
in subsection 169(2) does not displace or diminish the doctrine of res
judicata. It was established in Canada v. Chevron Canada Resources Ltd.
(1998), [1999] 1 F.C. 349 (Fed. C.A.) that the doctrine of res judicata applies
to income tax appeals, notwithstanding the limited right to appeal an
assessment following the conclusion of such an appeal. The Tax Court judge was
correct to say that Mr. Armstrong should have raised the issue of the 1993
rental losses before the conclusion of his Tax Court appeals for 1991 and 1993.
The doctrine of res judicata justified quashing the appeals for both years.
[22] In fact, the
Court held as follows in Grenier with
respect to an omission or error that does not warrant the withdrawal of a
judgment:
[W]ithdrawal is an exception to the
fundamental rule that judgments are irrevocable, an essential part of the
effective administration of justice: a case which has already been decided may
be reopened only for persuasive and clearly established reasons; the proceeding and the
resulting judgment contribute to protection of the rights of both parties; this
is why calling judgments into question remains the exception; an argument
dismissed for lack of evidence or after argument and counter-argument in
accordance with the settled rules does not meet the requirements for
withdrawal; the same is true of an error or omission by a party (see Saywack
v. Canada (Minister of Employment and Immigration), [1986] 3 F.C. 189
(C.A.); Rostamian v. Canada (Minister of Employment and Immigration),
[1991] F.C.J. No. 525 (F.C.A.) (QL) . . .
[23] In the case at
bar, these remedies were inappropriate given the conditions that must be met in
order for them to be available.
[24] If the Court were
to allow the Appellant's appeal, it would be allowing an appeal from a judgment
that has already been rendered. Obviously, the Court does not have jurisdiction
to do so.
[25] The decision in Breslaw
limits the ability of a judge to "review the merits of a decision of a
judge of coordinate jurisdiction . . . . As a result, any
proceeding to impeach or set aside an order of the Tax Court of Canada must be
taken in the Federal Court of Appeal."
[26] In light of the
facts, the only possible avenue was, quite simply, an appeal to the Federal
Court of Appeal.
[27] In other words,
the Appellant would have had to appeal from the judgment within the mandatory
time for bringing an appeal.
[28] Indeed, the
appeal to the Federal Court of Appeal was the Appellant's only solution.
However, that remedy would have needed to be exercised within 30 days
after the pronouncement of the amended judgment on December 1, 2005.
[29] The relevant
provisions of the Federal Courts Act are as follows:
27 (1.2) An appeal lies to the Federal Court
of Appeal from a final judgment of the Tax Court of Canada in respect of which
section 18, 18.29, 18.3 or 18.3001 of the Tax Court of Canada Act
applies.
(1.3) The
only grounds for an appeal under subsection (1.2) are that the Tax Court of Canada
(a) acted without jurisdiction, acted beyond its
jurisdiction or refused to exercise its jurisdiction;
(b) failed to observe a principle of natural justice,
procedural fairness or other procedure that it was required by law to observe;
(c) erred in law in making a decision or an order,
whether or not the error appears on the face of the record;
(d) based its decision or order on an erroneous finding
of fact that it made in a perverse or capricious manner or without regard for
the material before it;
(e) acted, or failed to act, by reason of fraud or
perjured evidence; or
(f) acted in any other way that was contrary to law.
(2) An
appeal under this section shall be brought by filing a notice of appeal in the
Registry of the Federal Court of Appeal
(a) in the case of an interlocutory judgment, within 10
days after the pronouncement of the judgment or within any further time that a
judge of the Federal Court of Appeal may fix or allow before or after the end
of those 10 days; and
(b) in any other case, within 30 days, not including any
days in July and August, after the pronouncement of the judgment or
determination appealed from or within any further time that a judge of the
Federal Court of Appeal may fix or allow before or after the end of those 30
days.
[30] The Appellant
cannot, today, indirectly do what it should have done within the time allotted
by the Act. Consequently, the Notice of Appeal is quashed.
Signed at Ottawa, Canada, this 3rd day of
July 2008.
"Alain Tardif"
Translation certified true
on this 8th day of August 2008.
Susan Deichert, Reviser
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