Date: 20011205
Docket: 2001-1784-GST-APP
BETWEEN:
106850 CANADA INC.,
Applicant,
and
HER MAJESTY THE QUEEN,
Respondent.
Reasonsfor
Order
Lamarre, J.T.C.C.
[1]
This is an application to this Court pursuant to section 305
of the Excise Tax Act ("Act") for an
order extending the time within which an appeal may be instituted
with a view to having assessment number PL-99184 dated June 23,
1999, made under the Act vacated.
[2]
The respondent opposes the granting of such an order on the
following grounds (which are reproduced verbatim from the
Response to the Respondent to the Application):
1. On June
15th, 1999, the Respondent sent the Petitioner a
letter of intent stating that an Assessment was going to be
issued following a transaction between the Petitioner and 130231
Canada inc, a linked company, said letter was sent at the address
of the Petitioner at 7965 boul. Décary, in Montreal.
2. On June
23rd, 1999, a Notice of New Assessment was
issued, this at the same address as the letter of intent, in the
name of the Petitioner under section 325(2) of the Excice Tax
Act [L.R.C. (1985), c. E-15], as amended (here after ETA),
number PL-99184, this following a transfer and/or transaction on
an immovable set at 1595 boul. Des Laurentides, in the city of
Laval, between the Petitioner and 130231 Canada inc., a
linked company.
3. That the Petitioner
did not present an opposition to the said
Assessment within the prescribed 90 day delay of
subsection 301(1.1) ETA, rather the Petitioner made an
application to the Minister under subsection 303(1) ETA asking
for extension of time to file an objection, this 155
days after said Assessment was mailed, namely by letter
signed on November 24th, 1999, and December
3rd, 1999, said Notice of objection and letter
indicating that the address of the Petitioner was the same that
was used to send the letter of intent and the Notice of
Assessment.
4. That the reasons given
by the Petitioner to ask an extension of time to file an
opposition was that the sole administrator and owner of the
Petitioner was out of the Country and was therefor unable
to give a mandate to his lawyer.
5. On or about March
17th, 2000, the minister granted the extension of
time to present an objection, the Notice of objection being
considered file at said date under subsection 303(6) ETA.
6. On November
9th, 2000, a decision on opposition was handed
down maintaining the Notice of Assessment of June
23rd, 1999, said decision being sent to the address of
the Petitioner, namely 7965 boul. Décary, in Montreal.
7. Copy of said
decision on opposition was also sent on November
9th, 2000, to the lawyers of the Petitioner Gross
Pinsky (Me Roger Vokey), said lawyer representing the
Petitioner at the opposition level and now in the present
application.
8. Nonetheless, the
Petitioner did not file an appeal within the 90 days of
said decision and it is only on May 16th, 2001,
this filing date being 188 days after said decision on
objection, that the lawyers for the Petitioner filed the present
application.
9. At no time since 1999
did the Petitioner indicate having an other address then that
used by the Respondent, nor did the Petitioner indicate any other
address of business in Canada.
10. The Respondent submits that the
application for an order to extend time to file an appeal should
be rejected for the following reasons:
a) For the
principal reason that the Petitioner does not show in what manner
it is within the breath of subsection 305(5)(b) ETA, to
which;
b) That following
it's late filing of the opposition, no simple, normal and
reasonable measures where taken by the Petitioner to make sure
that important letters where looked at within a reasonable time,
thus again giving rise to the same reasons for the present
application, namely that the Petitioner was late because the sole
administrator and owner was in China was supposedly made aware of
the decision on opposition in February 2001;
c) that the
lawyers for the Petitioner had the decision on opposition since
November 9th, 1999, but did not act or present any
demand to this Court;
d) that the
Petitioner cannot avail itself of it's own negligence and
plead it's lack of order in it's commercial affair and
then use this state of affairs to be excused for having not filed
an appeal before the expiration of the 90 days;
e) that
following it's late filing of the opposition, no simple,
normal and reasonable measures were taken by the Petitioner to
make sure that it had mandated a person that would see to
important and preventive measures concerning the business affairs
of the Petitioner;
f) that by
said negligence of it's affairs, the Petitioner does not show
that it was in fact unable to act within the 90 days, nor that it
was completely unable give a mandate to act in it's name;
g) that as of
February 5th, 2001, following paragraph 4 of the
present application, the Petitioner did not even have an opinion
if it was or not going to appeal the Assessment: "...the
principle... did not receive a copy... until February
5th, 2001... a representative of the Petitioner wished
to understand the options...";
h) that given the
way the Petitioner conducted it's business affairs before and
since the issuance of the Notice of Assessment, it would not
be just and equitable to grant the application because it
would indicate that the Court does not consider that the
Petitioner had the obligation to act like a reasonable person
would act;
i)
that the Petitioner did not present the present
application as soon as the circumstances permitted because the
Petitioner took 69 days after it would of taken notice of the
decision on opposition, thus invoking no valid reason such as
delays linked to telephone and mail services although the
application could be presented, and was presented, by the
lawyers for the Petitioner, and no affidavit was needed.
11. The Respondent also contest any
and all factual statements made by the Petitioner in the present
application and will question the representative of the
Petitioner on all these event's.
[3]
Mr. Shu Qin Gu, who apparently acts as the representative of the
applicant, resides in China and did not travel to Canada to
testify. His counsel, who was present at the hearing, filed an
affidavit ostensibly signed in China by Mr. Shu Qin Gu
before a commissioner of oaths. In paragraph 20 of that
affidavit, Mr. Shu Qin Gu states the following:
THAT the I did not receive a copy of said Decision on
Opposition until the beginning of February and this being
approximately February 5, 2001 and this due to the fact that I,
the representative of 106850 Canada Inc. reside at an address
being building 35, suite 1104, zone 3, Majapu, Jiayauan Fengtai
District, Beijing, China, and that frequently correspondence
between China and the outside world is interrupted by a various
assortment of reasons being amongst others a complete closedown
of China for two (2) weeks during New Years which took place in
the month of January 2001 as well as the normal congestion of
communications during the Christmas period with the consequence
that I was not aware of the Decision on Opposition until said
date of approximately February 5, 2001.
[4]
The affidavit was not part of the Court's file, and counsel
for the respondent indicated to the Court that it was never
served on the respondent. Nevertheless, counsel for the applicant
said that he himself filed with this Court the affidavit and the
Application for an Extension of Time to File a Notice of Appeal,
together with the Notice of Appeal.
[5]
Counsel for the respondent objects to the filing of that
affidavit on the basis that it was not validly served and on the
basis that it does not meet the requirements of the Tax Court
of Canada Rules (General Procedure)
("Rules"), for it is signed in the Chinese
language, it is undated, and there is no evidence that it was
signed before a commissioner of oaths or a judicial officer in
China.
[6]
At first sight, I was tempted to accept the affidavit as
constituting evidence as to the reasons why the applicant's
representative was unable to instruct counsel for the applicant
to file an appeal before the month of February 2001 (which is the
date he apparently was made aware of the decision of the Minister
dated November 9, 2000). Indeed, the fact that Mr. Shu Qin Gu
resides in China and the fact that he is the only representative
of the applicant are certainly exceptional circumstances in which
an affidavit could be authorized by this Court (under section 71
of the Rules), especially in the case of an application
for an extension of time.
[7]
However, there is no evidence that the affidavit in question was
sworn before a judicial officer in China or someone belonging to
any of the other categories of persons enumerated in section 52
of the Canada Evidence Act. Furthermore, the affidavit is
not dated and therefore does not meet the requirements of section
19 of the Rules. Nor does it meet the requirements of
article 91 of the Quebec Code of Civil Procedure, which
reads as follows:
91. Every affidavit must be divided into paragraphs numbered
consecutively, and be in the first person.
The names, occupation and exact address of the deponent must
be inserted therein.
The date when and the place where it was sworn must be
inserted in the jurat.
L.R.Q., 1977, c.C-25
Failure to meet those requirements constitutes sufficient
grounds for not accepting an affidavit (see for example Caron
c. Tribunal du travail, [1976] C.S. 864, a case in which an
affidavit was not accepted because the "commission du
commissaire à l'assermentation" was not
mentioned, and Syndicat des travailleurs de Commonwealth
Plywood (C.S.N.) c. Commonwealth Plywood Compagnie
Limitée, [1979] C.S. 905, a case in which an undated
affidavit was not accepted). It is therefore difficult for me in
the circumstances to give much weight to the affidavit concerned
in the present case.
[8]
Furthermore, even if I were to accept this affidavit as is, I do
not find that it is sufficient to justify an extension of time
under subsection 305(5) of the Act, which reads as
follows:
(5) When order to be made - No order shall be
made under this section unless
(a) the application is
made within one year after the expiration of the time otherwise
limited by this Part for appealing; and
(b) the person
demonstrates that
(i)
within the time otherwise limited by this Part for appealing,
(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 appeal,
(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.
[9] Although
paragraph 305(5)(a) is not at issue, the respondent is of
the view that the applicant did not show that all the conditions
required by paragraph 305(5)(b) in order for the
application to be granted were met.
[10] After reviewing the
documents before me, I agree with counsel for the respondent.
[11] I find that the
applicant's representative did not demonstrate, by his
affidavit or otherwise, that he was unable to act or to give a
mandate to act in the applicant's name, or that the applicant
had a bona fide intention to appeal within the time otherwise
limited by the Act for appealing. Indeed, the applicant
had been confronted with the same problems at the objection
stage. Mr. Shu Qin Gu knew that there was an assessment against
the applicant, and he experienced problems with delays when it
came to objecting to that assessment. The Minister was not
opposed to an extension of the time for filing a notice of
objection and so advised the applicant on March 17, 2000, thereby
agreeing to deal with that objection. From that point on, the
applicant was aware that a decision on its objection was to be
made by the Minister. That decision came on November 9, 2000 and
was sent to the applicant's address in Montreal, with a copy
going to the applicant's counsel.
[12] Counsel for the applicant
said that Mr. Shu Qin Gu contacted him at the end of February
2001 after having learned of that decision. In my view, knowing
that a decision from the Minister was forthcoming and being aware
of delays caused by the fact that its representative lived in
China, the applicant should have instructed its counsel to call
Mr. Shu Qin Gu as soon as the decision was issued in order to
receive instructions with respect thereto. Obviously this was not
done. There is no evidence that there was anyone taking care of
the applicant's tax problem in Canada. The evidence shows
rather that the applicant was heedless of the requirements of the
Act, most particularly with respect to delays. I do not
think, therefore, that the applicant can say that it was unable
to give a mandate to its counsel to act in its name after the
decision was issued on November 9, 2000, or that it had a bona
fide intention to appeal within the time otherwise limited by the
Act for appealing.
[13] Furthermore, even if I were
to accept the fact that the applicant could not act, or give a
mandate to act in its name, before the month of February 2001, I
am not convinced that the application was made as soon as
circumstances permitted it to be made. Indeed, the application
was only made on May 16, 2001, that is, six months after the
Notice of Decision and three months after the applicant became
aware of that decision. Counsel for the applicant explained that
delay by the fact that he had been instructed by the applicant to
draft a document and send it to Mr. Shu Qin Gu in China, which
document was received by Mr. Shu Quin Gu only at the
beginning of April 2001 and sent back to Canada at the beginning
of May 2001. None of this information is evidenced by any
document or any other reliable evidence. It is not even alluded
to in Mr. Shu Qin Gu's affidavit. It is difficult in the
circumstances to rely on such an explanation.
[14] I therefore conclude that
the applicant has not demonstrated on a balance of probabilities
that it took all the necessary and appropriate steps required by
the Act in order for it to be granted an extension of time
for filing its notice of appeal pursuant to section 305 of the
Act.
[15] The application for an
order extending the time for filing a notice of appeal is
dismissed.
Signed at Ottawa, Canada, this 5th day of December 2001.
"Lucie Lamarre"
J.T.C.C.
COURT FILE
NO.:
2001-1784(GST)APP
STYLE OF
CAUSE:
106850 Canada Inc. v. The Queen
PLACE OF
HEARING:
Montreal, Quebec
DATE OF
HEARING:
November 27, 2001
REASONS FOR JUDGMENT
BY:
The Honourable Judge Lucie Lamarre
DATE OF
JUDGMENT:
December 5, 2001
APPEARANCES:
Counsel for the
Appellant:
Roger Vokey
Counsel for the
Respondent:
Gérald Danis
COUNSEL OF RECORD:
For the
Appellant:
Name:
Roger Vokey
Firm:
Gross, Pinsky
For the
Respondent:
Morris Rosenberg
Deputy Attorney General of Canada
Ottawa, Canada
APPLICATION UNDER SECTION 305 OF THE
EXCISE TAX ACT(APPEAL)
2001-1784(GST)APP
BETWEEN:
106850 CANADA INC.,
Applicant,
and
HER MAJESTY THE QUEEN,
Respondent.
Application heard on November 27, 2001, at
Montreal, Quebec, by
the Honourable Judge Lucie Lamarre
Appearances
Counsel for the
Applicant: Roger
Vokey
Counsel for the Respondent:
Gérald Danis
ORDER
Upon
reading the application for an order extending the time within
which an appeal may be instituted from assessment number PL-99184
dated June 23, 1999, made under the Excise Tax Act;
And
upon hearing what was alleged by the parties;
The
application is dismissed.
Signed at Ottawa, Canada, this 5th day of December 2001.
J.T.C.C.
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