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Citation: 2004TCC457
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Date: 20040629
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Docket: 2003-4335(GST)APP
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BETWEEN:
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2749807 CANADA INC.,
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Applicant,
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and
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HER MAJESTY THE QUEEN,
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Respondent.
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[OFFICIAL ENGLISH TRANSLATION]
REASONS FOR ORDER
Tardif J.
[1] This is an
application for an extension of time to appeal an assessment bearing number T-02-DSI-055FC and issued on
November 21, 2002.
[2] The contents of the
motion read as follows:
[translation]
. . .
MOTION OF THE APPLICANT
TO EXTEND THE TIME TO APPEAL TO THE COURT OF QUEBEC
(Article 93.1.13 of An
Act respecting the ministère du Revenu)
TO ONE OF THE HONOURABLE
JUSTICES OF THE COURT OF QUEBEC, SITTING IN THE CHAMBRE DE PRATIQUE, IN AND FOR
THE DISTRICT OF MONTRÉAL, THE APPLICANT RESPECTFULLY STATES THE FOLLOWING:
1. On
or around October 29, 2002, the Respondent informed the Applicant
that, further to its notices of objection, amendments would be made to its
notice of assessment for the QST, as it appears in a copy of a letter from
Mr. François Fontaine, which is filed as Exhibit R‑1;
2. On
December 31, 2002, the Respondent issued the Applicant a notice of
reassessment for the QST, as it appears in a copy of that notice of
assessment, which is filed as Exhibit R‑2;
3. Upon
receipt of this notice of reassessment, on or around January 8, 2003,
the Applicant forwarded it to its attorney and business advisor at the time,
Mr. Richard Corriveau, as it appears in a copy of the Applicant’s fax
activity report, which is filed as Exhibit R‑3;
4. The
Applicant knew that Mr. Richard Corriveau, a former lawyer, was
experiencing personal problems, but it mistakenly believed that he had assumed
the responsibility of securing a lawyer’s services to make the motion for
appeal before this Honourable Court, since the Applicant had mandated him to do
so.
5. The
facts reveal that the Applicant was dealing with said Richard Corriveau as
business consultant on certain cases and believed that he had taken the
professional undertaking to protect the interests of the Applicant as it had
requested;
6. The
Applicant discovered that no action had been taken in this regard when it
received a garnishee from the Toronto Dominion Bank dated
October 30, 2003, a copy of which the Applicant received on
November 5, 2003, as it appears in a copy of this notice filed as
Exhibit R‑4;
7. Upon
receipt, the Applicant traced the notice of assessment and had the case
forwarded to the undersigned counsel;
8. It
was not possible for the Applicant to act, having taken the necessary measures
to file a motion for appeal before this Honourable Court;
9. The
Applicant always had the intention of appealing notice of assessment R‑2;
10. The
Respondent had initially assessed the tax return in an arbitrary manner;
11. Originally,
the Respondent had forgotten to allow inputs, thus demonstrating the lack of
seriousness of the original assessment;
12. The
Respondent changed its mind, as it finally allowed the inputs;
13. Assessment
R‑2 remains nonetheless arbitrary and without justification;
14. No
more than one year passed since December 31, 2002, that is, the
mailing date of notice of assessment R‑2;
15. The
Applicant, through its undersigned counsel, asks this Honourable Court for an
extension of time to appeal in order to file its motion to appeal notice of
assessment R‑2 before this Honourable Court for a period of fifteen
(15) days following the judgment date on this motion;
16. This
motion is well founded in fact and in law;
[3] In response to the
motion, the Respondent countered as follows:
[translation]
. . .
In response to the
application for an order to extend the time within which the Applicant may file
a notice of appeal regarding the notice of appeal regarding the notice of
assessment dated November 21, 2002, the Deputy Attorney General of
Canada sets out the following:
1.) On
October 26, 2001, the Respondent issued to the Applicant a notice of
assessment bearing number T‑01‑DS1‑124PP, covering the
period from July 1st, 1997 to July 31, 2001;
2.) On
January 15, 2002, the Applicant objected to that assessment;
3.) In
a decision on the objection, the Respondent issued a notice of reassessment
dated November 21, 2002, bearing number T‑02DS1‑055FC;
4.) The
Applicant failed to file a notice of appeal with the Tax Court of Canada within
ninety (90) days, as specified under section 306 of the Excise Tax
Act;
5.) The
application to extend the time to file a notice of appeal before the Tax Court
of Canada was filed with the Registry of the Court on December 1st, 2003.
6.) The
Respondent argues that such application for extension should be dismissed for
the following reasons:
(a) The
Applicant did not show that it could not act, or give a mandate to act on its
behalf within the time to appeal otherwise limited by subparagraph 305(5)(b)(iii)
of the Act;
(b) The
Applicant did not show that the application was made as soon as circumstances
permitted in accordance with subparagraph 305(5)(b)(iii) of the
Act;
FOR THESE REASONS, the
Deputy Attorney General of Canada asks this Court to dismiss the Applicant's
application to extend the time with costs.
. . .
[4] Mr. Robin Thibault
was the only person to testify. He briefly described the Applicant’s role; he
also indicated that, generally speaking, he was in charge of special projects.
[5] He testified that
for approximately ten years, the Applicant entrusted
Richard Corriveau with all legal cases. A lawyer by trade, he was
disbarred from the Barreau du Québec. Mr. Thibault affirmed that he and
his boss were both aware of Corriveau’s disbarment.
[6] Having developed a
sound trusting relationship over the years, the business for which he worked
relied on Mr. Corriveau to challenge the merits of the assessments issued
with regard to the goods and services tax ("GST") as well as the
Quebec sales tax ("QST").
[7] With regard to the
first stage, that is, the objection, Mr. Corriveau had retained the
services of someone named Jean Lelièvre. As the objection resulted in a
substantially lower assessment, the Applicant, once again, retained the
services of Mr. Corriveau, so that he could find a competent and qualified
person to initiate the appeal process following the significantly reduced
assessment, yet confirmed for a considerable amount.
[8] The witness
indicated having met and conversed with Mr. Corriveau on a few occasions
and, each time, the latter had allegedly told him that everything was under
control. Several months passed after the mandate to prepare and seek a notice
of appeal was given; when the Respondent initiated execution procedures through
seizure, the Applicant ascertained that Mr. Corriveau had betrayed its trust
and that he had never assumed the mandate that he had been given.
[9] Arguing that it has
fallen victim to the incompetence, the indifference or the ignorance of its
agent, Mr. Corriveau, the Applicant submits its application for an
extension of time to file an appeal. It adds that it has good and valid reasons
to vacate, if not considerably reduce the assessment that had already been
substantially reduced following the objection.
[10] Is relying on an
allegedly qualified and competent person to act in itself an acceptable excuse
to justify and explain a failure to act within the prescribed time? I do not
believe so.
[11] Anyone should
automatically ensure that the person whom he or she mandates skilfully and
adequately carries out the mandate.
[12] In this case,
Mr. Corriveau had acted skilfully during the objection process. The latter
had retained the services of an individual named Jean Lelièvre; it
resulted in a substantial reduction of the initial assessment, thereby
suggesting that he had the skills to carry out any mandate in relation to the
progression of the case. The fact that he had been highly successful in the
objection was certainly a determining factor for any reasonable person to
believe that the following procedures would be prepared according to
requirements. As for the time passed, it was normal for a reasonable layperson
to believe that this was not abnormal since time limits applicable to such
challenges are, unfortunately, always very long.
[13] The argument that
the reduced reassessment amount, which was still considerably high, would
normally have resulted in greater vigilance on the Applicant's part as well as
a constant follow‑up of its case, is certainly a valid one.
[14] Conversely however,
given that the amounts owing were so high, it was highly unlikely that someone
would be reckless to the point of being indifferent about the outcome of his or
her case.
[15] This approach
supports the interpretation that the Applicant had complete confidence in
Mr. Corriveau, despite his professional setbacks. Having correctly acted
at the objection stage, the Applicant had no reason or serious motive for
doubting his competence or ability to conduct and pursue the case.
[16] A mandate can be
executed in good or bad faith. In a hypothetical case of bad faith, it could
arise out of ignorance, carelessness, an error, an omission or negligence. For
all of this unsatisfactory behaviour, variables may range from very minor to
very serious.
[17] Where a mandate is
not executed in accordance with the principal's expectations and the resulting
non‑execution proves to be fatal for his or her rights, the penalty for
the principal does not depend on the seriousness of the agent's act: it is
total and final.
[18] Admittedly, there
are recourses with respect to responsibility: however, where it is possible to
remedy the repercussions of a behaviour resulting in a loss of a right,
particularly where it can be done without any prejudice to the opposing party,
an application allowing a person to assert his or her rights should be allowed.
[19] Lastly, while this
court is not bound by the decisions of the Court of Quebec, especially where
the relevant legal provisions are not the same, I believe it is important,
insofar as it is possible, to help ensure that the judgments on a single issue
are consistent. To that effect, Counsel for the Applicant submitted that the
same motion had been filed before the Court of Quebec, which has jurisdiction
with respect to the QST.
[20] It involved the same
facts and reasons, the only distinction being that the applicable legal
provisions, that is, An Act respecting the ministère du Revenu –
(article 93.1.13), were different because it addressed the QST, whereas
the Excise Tax Act – (article 305.1) addressed the GST. The case,
however, dealt with the same period and the same business transactions.
[21] The application is
allowed.
Signed at Ottawa, Canada, this 29th day
of June 2004.
Tardif J.
on this 2nd day
of July 2004.
Maria Fernandes, Translator
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