Date: 19990203
Docket: 98-852-IT-I
BETWEEN:
NORMAN BAKER,
Applicant,
and
HER MAJESTY THE QUEEN,
Respondent.
Reasons for judgment
BOWIE J.T.C.C.
[1] These appeals from assessments for income tax for the
years 1993, 1994 and 1995 were begun by a Notice of Appeal filed
on March 23, 1998 by the Applicant's agent, Barry Ward, CA.
The Applicant elected the informal procedure. A Reply to the
Notice of Appeal was served and filed on or about May 21, 1998.
Notice of Hearing was mailed to both parties on November 3,
1998.
[2] On December 8, 1998, a letter was sent on Mr. Ward's
letterhead to the Registrar of the Court. It reads as
follows:
This is to advise that the above taxpayer wishes to withdraw
his above appeal scheduled to be heard on January 12, 1999 at the
Tax Court in Vancouver, B.C.
It was signed "K. Mari per B. Ward", over the typed
signature "Barry Ward, CA". A copy was sent to the
Applicant.
[3] On December 21, 1998, the Registry of the Court
acknowledged the receipt of this letter, advising that it was
filed on December 16, 1998, and that the file was then
closed.
[4] On December 22, 1998, Mr. Ward wrote to the Registrar as
follows:
On December 8, 1998 I wrote to you regarding the above noted
taxpayer stating he wished to withdraw his appeal. There was some
confusion between the taxpayer and ourselves as he has now
advised us he wishes to continue this appeal and represent
himself when it's heard.
Please disregard our letter of December 8, 1998 and keep the
appeal open. As I am with this letter resigning as his authorized
representative, he may be contacted at 11470 Warsley Street,
Maple Ridge, B.C. V2X 1T1, telephone 604-465-4438.
The letter is signed by Mr. Ward, over his typed signature. A
copy was sent to the Applicant.
[5] Counsel for the Respondent, upon being made aware of this
letter, wrote to the Registrar to record his opposition to the
purported withdrawal of the Notice of Discontinuance. The
Applicant, represented by his agent, appeared before me on
January 12, 1999, seeking an Order to reinstate his appeals.
[6] The Applicant and Mrs. Ward gave evidence which
established these facts. Mr. Ward was authorized to, and did,
file the Notice of Appeal on the Appellant's behalf. In the
latter part of 1988, a serious health problem prevented him from
attending to his practice for several weeks. During this time his
daughter, who works for him as a clerk and bookkeeper, and his
wife, who works part-time in his office, attended to his
practice. Upon receiving the Notice of Hearing in these appeals,
Mrs. Ward telephoned the Applicant and arranged to meet with him.
During that meeting she somehow gained the impression that the
Applicant did not wish to pursue his appeals, and she therefore
caused the letter of December 8 to be sent to the Court. When he
received a copy of this letter, the Applicant telephoned the
agent's office, demanding an explanation. I believe his
testimony, which was to the effect that he did not wish to
abandon his appeals, and that the letter of December 8 was sent
without his instructions. I also believe the evidence of Mrs.
Ward, which was that she believed, after meeting with the
Applicant, that he did not wish to pursue his appeals.
[7] The agent for the Applicant takes the position that the
letter of December 8 was the result of a misunderstanding between
the Applicant and Mrs. Ward, that it was withdrawn as soon as the
misunderstanding was discovered, and that the Applicant should
not be prejudiced by this mistake.
[8] Counsel for the Respondent argued that the letter of
December 8 was an effective Notice of Withdrawal, and that by the
operation of section 16.2[1] of the Tax Court of Canada Act (the
Act), the appeals are deemed to have been dismissed on
December 16, 1998, when it was filed. He relies on two judgments
of this Court: Laskaris v. M.N.R.[2] and Bogie v. Canada.[3] The
Laskaris case was decided before section 16.2 was enacted.
Laskaris, by his agent, filed a Notice of Appeal in the Court
more than 180 days after his Notice of Objection was delivered to
the Minister, but before the Minister had dealt with the
objection. A representative of the Minister, mistakenly, advised
the agent of the Applicant to withdraw the appeal, on the
understanding that he could refile it after the objection had
been dealt with. He did so, and, as was then the practice of the
Court, the Notice of Discontinuance was placed before the
Chief Judge, who made an Order dismissing the appeal.
Sarchuk J. held that, even though the Respondent had, without
malice, induced the Applicant to file the Notice of
Discontinuance, the Court had no power to relieve against the
dismissal, based on the withdrawal, of what had been a valid
appeal. The Court's power was spent, and the Applicant had
lost the right to appeal the assessment.
[9] In Bogie, the Appellant filed a Notice of Appeal
from an assessment for income tax, asserting that a property sold
by him had been his principal residence. He was then advised,
erroneously, by his accountant that he had in the past claimed
capital cost allowance on the property, and that it therefore
could not be a principal residence. The Appellant discontinued
his appeal, only to be advised by the accountant that his earlier
advice had been a mistake. On a motion to have the Notice of
Discontinuance set aside, Brulé J. concluded that he
had no such jurisdiction, as section 16.2 operated to deem the
appeal to be dismissed as of the day of filing the Notice of
Discontinuance.
[10] In Bogie, Brulé J. referred to the
Appellant's "considered decision to terminate the
appeal". In the present case the Applicant made no such
decision, considered or otherwise. The appeal was terminated by
the action of Mrs. Ward, which she was not, as she thought,
instructed to take. I have, somewhat reluctantly, concluded that
this factual difference does not permit the Applicant to avoid
the effect of the December 8, 1998 letter. Section 17.1 of the
Tax Court of Canada Act permits an Appellant who elects
the informal procedure to be represented by counsel, or by an
agent.
17.1(1) A party to a proceeding in respect of which this
section applies may appear in person or be represented by
counsel, but where the party wished to be represented by counsel,
only a person who is referred to in subsection (2) shall
represent the party.
(2) Every person who may practise as a barrister, advocate,
attorney or solicitor in any of the provinces may so practise in
the Court and is an officer of the Court.
There is no doubt that a litigant is bound by the actions of
counsel taken in the conduct of the litigation.[4] There is nothing in section
17.1, or elsewhere in the Act, to suggest that a non-legal
agent has any lesser, or different, authority than a lawyer has
in representing a litigant before this Court. Nor is there any
principled reason why the extent of an agent's implied
authority should be different, at least in the context of a
professional person who acts for a fee. I was referred to no
authority that would support such a distinction. Nor was it
suggested by Mr. Ward that his wife lacked the authority to
act for him in his absence. Indeed, it is clear that she did have
his authority to act. The words of section 16.2 are clear, and I
must give effect to them.[5]
[11] I should add that my conclusion is based on the words of
section 16.2 of the Act, and the implied authority which a
professional agent who is paid to conduct an appeal in the Court
has to bind his client. The result might well be different if the
agent were simply a friend, professing no particular skill, and
assisting the Applicant for no consideration.
[12] I have reached my decision in this matter reluctantly, as
I would relieve the Applicant from the serious consequences of
his agent's mistake if it were open to me to do so. The
prospect of an action for damages must be of little comfort to
him, given the cost and the uncertainty of such litigation. This
case should serve as a reminder to those who elect to act as
professional agents before this Court that by doing so they
accept the responsibility to exercise an adequate degree of care
to safeguard the interests of their clients.
[13] The application to set aside the deemed dismissal and to
reinstate the appeals is denied.
Signed at Ottawa, Canada, this 3rd day of February, 1999.
"E.A. Bowie"
J.T.C.C.
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