SDC Sterling Development Corp. v. The Queen, docket 97-826-GST-I (Informal Procedure)

Date: 19971118

Docket: 97-826-GST-I

BETWEEN:

SDC STERLING DEVELOPMENT CORPORATION,

Appellant,

and

HER MAJESTY THE QUEEN,

Respondent.

Reasons for Judgment

Christie A.C.J.T.C.

[1] This appeal is governed by the informal procedure prescribed under section 18.3001 and related provisions of the Tax Court of Canada Act.

[2] Apart from the references to case law the Notice of Appeal reads:

“TAKE NOTICE THAT SDC Sterling Development (hereinafter the ‘Appellant’) appeals to the Court from the Notice of Decision of the Minister of National Revenue dated December 19, 1995, in connection with the Goods and Services Tax Assessment No. 04BP0300830 dated May 1, 1995 under Part IX of the Excise Tax Act (‘ETA’), in respect of the period January 1, 1991 through January 31, 1995.

A. Reasons for Appeal

The assessment includes an amount under ETA subsection 281(1) for penalty and interest for supplies which are ‘wash transactions’. The stated policy of the Minister of National Revenue (the ‘Minister’) is to waive or cancel the penalty and a portion of interest in the case of a wash transaction.

The assessment includes an amount for penalty under ETA subsection 280(1) whereas the Appellant exercised due diligence in its effort to comply with its obligations under the ETA.

B. Relevant Facts

Wash Transactions

Section 281.1 provides to the Minister the authority to waive or cancel interest or penalty otherwise payable by a person under ETA section 280.

The Facts

1) The Appellant charged fees to limited partnerships for the management of commercial rental properties.

2) The Appellant charged fees to limited partnerships for the management of the construction of commercial rental properties.

3) The Appellant did not collect and remit GST on the fees charged to the limited partnerships, because it did not consider its management services to be taxable supplies.

4) The limited partnerships are registrants for the purpose of the ETA.

5) The limited partnerships acquired the Appellant’s management services in the course of their commercial activities.

6) Pursuant to ETA subsection 169(1), the limited partnerships would have been entitled to claim a full input tax credit (‘ITC’) if the Appellant had collected GST on the supply of the management services.

7) The limited partnerships did not claim any ITCs based on the initial charges of the Appellant.

8) Subsequent to the audit for the period January 1, 1991 to January 31, 1995, the Appellant invoiced the limited partnerships for the GST that should have been charged under ETA subsection 165(1) and 221(1).

In Technical Information Bulletin (‘TIB’) B-074, Guidelines for the Reduction of Penalty and Interest in ‘Wash Transactions’ Situations, Revenue Canada defines a wash transaction in the following manner:

A ‘wash transaction’ occurs when a supply, taxable at the rate of 7%, is made and the supplier has not remitted an amount of net tax by virtue of not having correctly charged and collected the tax from the recipient who is a registrant and who would have been entitled to claim a full input tax credit if the tax had been correctly applied.

In the circumstances of a ‘wash transaction’, the Minister will waive all interest or penalty payable by a person, other than a minimum penalty equal to the lesser of the total interest and penalty owing and 4% of the tax not remitted. By this policy, the Minister mitigates the significant interest and penalty consequences that a registrant would otherwise suffer when the registrant made errors in applying the GST rules, but when these errors did not result in any net revenue loss to the government.

In TIB B-074, Revenue Canada states that the Minister will waive or cancel the portion of the penalty and interest that is in excess of 4% of the GST not collected in a ‘wash transaction’ situation where the following conditions are satisfied:

a) it is demonstrated that the supply in question was made to a registrant who would have been entitled to a full ITC if the GST has been correctly applied;

b) the supplier has not been previously assessed for the same mistake and has a satisfactory history of voluntary compliance;

c) the supplier has remedied the situation to ensure that GST is collected on future supplies of a similar nature; and

d) the supplier has exercised reasonable care and diligence without being negligent or careless in the conduct of its affairs to ensure that GST is collected on all taxable supplies.

The Appellant’s supplies of management services to the limited partnerships are ‘wash transactions’ as described by Revenue Canada in TIB B-074. The Appellant meets the criteria set out in TIB B-074 for waiver of the penalty and interest, because:

a) the limited partnerships who were charged the GST did not claim ITCs on the GST charged;

b) the Appellant had not been previously assessed on these issues; and

c) the Appellant hired a firm of chartered accountants to set up its accounting system to take into account GST, and followed that accounting system. Therefore, the Appellant exercised care and diligence in relation to its GST obligations.

Because the Appellant is no longer operational, there will be no question of failure to collect GST on future supplies of property management services.

Due Diligence

The Facts

1) The Appellant hired a national public accounting firm to set up its accounting system. The Appellant ensured that its accounting staff were involved in the process;

2) The Appellant had its computer accounting system updated to reflect the GST and ensured that its staff was trained in this new software;

3) The Appellant’s financial affairs were subject to significant scrutiny by financial specialists because the Appellant reported this financial information in documentation prepared for the distribution to prospective investors. None of the reviews done by the professionals who were involved in preparation of these documents indicated that the construction revenue was subject to GST;

4) The Appellant hired qualified employees with accounting designations to perform its accounting and tax-reporting functions;

5) The Appellant’s financial statements were reviewed on an annual basis by a public accounting firm, including a specific examination of the GST accounts to ensure that GST was accounted for correctly. The annual reviews did not report any irregularities or errors; and

6) The Appellant’s activity was in an area where the GST issues were extremely complex. During the course of the audit, even the auditor requested technical guidance from his superiors on the nature of these supplies. The denial of ITCs on GST paid or payable with respect to these taxable supplies was a significant part of the adjustment.”

[3] The opening paragraph and paragraphs 1 to 7 inclusive of the Reply to the Notice of Appeal read:

“In reply to the Notice of Appeal for the period from January 1, 1991 to January 31, 1995, the Deputy Attorney General of Canada says:

A. STATEMENT OF FACTS

1. Except as hereinafter expressly admitted, he denies each and every allegation in the Notice of Appeal, and puts the Plaintiff to the strict proof thereof.

2. By Notice of Assessment number 04BP0300830, dated May 1, 1995, the Minister of National Revenue (the ‘Minister’) assessed the Appellant’s GST liability for the reporting periods of January 1, 1991 to January 31, 1995 by:

a) increasing the Appellant’s GST payable in the amount of $69,608.15;

b) reducing the Appellant’s claim for input tax credit in an amount of $60,945.70, by disallowing $67,523.70 and allowing a previously unclaimed amount of $6,578.00;

c) assessing penalties and interest in the amount of $22,903.98 and $21,259.52 respectively.

3. In so assessing the Appellant’s tax liability, the Minister made, inter alia, the following assumptions of fact:

a) the Appellant is a GST registrant effective January 1, 1991, involved in real estate syndication and management;

b) the Appellant understated its GST on its returns for the periods from January 1,1991 to January 31, 1995;

c) the Appellant overstated input tax credits allowable on its returns for the periods from January 1,1991 to January 31, 1995;

d) the Appellant’s year end is October 31; and

e) the Appellant was deregistered for GST purposes, effective April 30, 1995.

4. On July 28, 1995, the Appellant filed a Notice of Objection to Assessment No. 04BP0300830 with the Minister.

5. The Minister reviewed the objections made by the Appellant and allowed them in part, issuing Notice of Reassessment No. 04BP113891709, which reduced the net tax owing for the periods January 1, 1991 to January 31, 1995 to $93,882.82 and issued the accompanying Notice of Decision on December 19, 1996.

6. In so reassessing, the Minister reviewed all documentary evidence presented by the Appellant and based on that evidence, concluded that the Appellant did not exercise due diligence in filing its returns properly.

B. ISSUES

7. The issue is whether the Minister properly assessed the Appellant a net increase in its GST liability in the amount of $93,882.82, with penalty and interest in the amounts of $19,561.12 and $18,485.80 respectively, for the period of January 1, 1991 to January 31, 1995.”

[4] The Court was informed at the hearing on November 5, 1997, that the increase in the appellant’s GST liability of $93,882.82 was not an issue before it. The issues to be determined are liability to the penalty and interest. Subsection 280(1) of the Excise Tax Act (“the Act”) provides:

“280. (1) Subject to this section and section 281, where a person fails to remit or pay an amount to the Receiver General when required under this Part, the person shall pay on the amount not remitted or paid

(a) a penalty of 6% per year, and

(b) interest at the prescribed rate,

computed for the period beginning on the first day following the day on or before which the amount was required to be remitted or paid and ending on the day the amount is remitted or paid.”

[5] The onus is on the appellant to show that the reassessment is in error. This can be established on a balance of probabilities. Where the onus lies has been settled by numerous authorities binding on this Court. It is sufficient to refer to two judgments of the Supreme Court of Canada in this regard: Anderson Logging Co. v. The King, [1925] S.C.R. 45 and Johnston v. M.N.R., [1948] S.C.R. 486. This applies to both penalty and interest payable under subsection 280(1) of the Act: DeHede Fashions International Limited v. The Queen, [1996] G.S.T.C. 50 (T.C.C.) at p. 50-3.

[6] With respect to interest, decided cases establish that this court is not in a position to grant relief in that regard. In Somnus Enterprises No. 1 Limited v. The Queen, [1995] G.S.T.C. 4 (T.C.C.) both penalty and interest had been assessed against the appellant under subsection 280(1) of the Act. Bowman, T.C.J. said at pp. 4-2 and 4-3:

“Nor can I provide any relief against the assessment of interest. Interest is exigible automatically where there is a deficiency in the tax paid. The only circumstance in which relief against interest is available is where the Minister of National Revenue exercises his discretion under s. 281.1[1] of the Excise Tax Act. I agree with the respondent that it is not within this court’s jurisdiction to review the Minister’s exercise of his discretion under s. 281.1. Our jurisdiction, like that of the Federal Court, is defined by the statute creating the court. If such a jurisdiction is conferred upon the Federal Court it is for that court to determine under the Federal Court Act.

Where this court clearly does have jurisdiction is, not to review the exercise of the Minister’s discretion to waive penalties and interest under s. 281.1 where interest and penalties have otherwise been properly assessed under the Act, but rather to determine whether the penalties and interest have been properly assessed in accordance with the law. I can do nothing about the interest in this case, but the penalties are another matter.”

In Kornacker v. The Queen, [1996] G.S.T.C. 21 Sarchuk, T.C.J. said at p. 21-3 with reference to paragraph 280(1)(b) of the Act: “Interest is payable in such cases regardless of the reasons for delay or failure”. He went on to point out as Bowman, T.C.J. had done in Somnus that the Minister of National Revenue could grant relief under section 281.1 of the Act. In Roberts v. The Queen, [1997] T.C.J. No. 771 (T.C.C.) Bowman, T.C.J., again speaking with reference to paragraph 280(1)(b), said at paragraph 8: “I can, of course, do nothing about the imposition of interest on deficient payments. That is automatic.” In Lawson v. The Queen, [1995] G.S.T.C. 59 Mogan, T.C.J., after citing subsection 280(1), said at p. 59-4:

“The important verb in that section is ‘shall pay’. The payment of the penalty and the interest is obligatory. Parliament has made it so. To the extent that the appellant acknowledges his liability for the tax, he is also acknowledging his liability for both the penalty and the interest because they run concurrently with the liability for the tax to the extent that it was not paid. It was not paid on the due date because the appellant did not know that the liability was there. And a significant amount of it still has not been paid because he has been in such financial straits after selling the house at a loss at a time when there was still $26,000 owing to National Trust.

Because the obligation to pay penalty and interest is mandatory, I do not have any jurisdiction to reverse what Parliament has enacted. I cannot take away the liability for the penalty or the interest. When the appellant acknowledges his liability for the tax, he has also acknowledged his liability for the penalty and the interest because they are obligatory and they flow from the liability for the tax. The only relief available to the appellant is under s. 281.1 of the Excise Tax Act which is within that group of sections that relate to goods and services tax.”

[7] The law in relation to penalties payable under paragraph 280(1)(a) is different. In Pillar Oilfield Projects Ltd. v. The Queen, [1993] G.S.T.C. 49 (T.C.C.) Bowman, T.C.J. enunciated for the first time the existence of the defence of “due diligence” in relation to such penalties. After referring to a number of reported cases including several decisions of the Supreme Court of Canada he concluded at p. 49-7:

“In my opinion the penalties imposed under subsec. 280(1) of the Excise Tax Act fall under the second category described by Dickson J. They involve ‘strict’ as opposed to ‘absolute’ liability and are susceptible of being challenged where the taxpayer demonstrates due diligence.”

Earlier at the same page he made the point that: “Innocent good faith does not, however, amount to due diligence”.

[8] In Somnus (supra) this is said at pp. 4-3 and 4-4:

“As stated in Pillar Oilfield Projects Ltd. v. Canada, [1993] G.S.T.C. 49 (T.C.C.) there can be no justification for the routine and automatic imposition of penalties merely because a taxpayer has incorrectly computed his or her tax liability. Such penalties are not absolute. Rather they are strict, in the sense in which that expression is used in R. v. Sault Ste. Marie, [1978] 2 S.C.R. 1299, 85 D.L.R. (3d) 161 and are susceptible of a defence of due diligence. It is unnecessary that I repeat what was said in the Pillar Oilfield case.

Here I think the defence of due diligence has been made out. What constitutes due diligence in a particular case involves both subjective and objective criteria and depends on the facts of the particular case. Mere innocent good faith is not in itself sufficient. It requires an honest attempt by the taxpayer to comply, to the best of his or her ability, with the requirements of the statute, using the sources of information, facilities and resources available to that taxpayer. In considering whether a taxpayer has exercised due diligence a factor may, depending upon the circumstances, be that taxpayer’s level of sophistication in tax matters. The evidence discloses that the appellant kept meticulous books, showing which of its suppliers were registrants and which were not. The appellant’s bookkeeper, Ms. Templeton, testified that she obtained videos from the Department of National Revenue in an attempt to determine how she should comply with the Act. She consulted another large company that carried on the same business as the appellant and determined from them the manner in which they dealt with export sales of used goods. She consulted chartered accountants and made enquiries of officials of the Department of National Revenue. She went to public libraries in an unsuccessful attempt to obtain up-to-date copies of the Excise Tax Act. She followed instructions in departmental publications but was not able to find any reference to the tax consequences of exporting used goods.

I am satisfied on the evidence that the appellant did all that could reasonably be expected of it to comply with the Excise Tax Act and that the appellant has demolished one of the basic assumptions set out in para. 3(k) of the Reply that:

k) the Appellant was not duly diligent in ensuring that it met its requirements under the Act to recapture the notional input tax credits when the goods on which they were claimed were subsequently exported.”

[9] In Consolidated Canadian Contractors Inc. v. The Queen, [1997] G.S.T.C. 34 the issue is described by Bowman, T.C.J. at page 34-2:

“The appellant is a building contractor and the matter arises from its construction of two schools. Hickory Wood Public School and Blessed Edith Stein School. The issue relates to the inclusion by the Minister in the base upon which GST is calculated of the cost of certain items that are zero-rated and of Ontario sales taxes paid on goods purchased by the appellant and incorporated in the structures that it built.”

He went on at page 34-5:

“I turn now briefly to the penalties. Obviously they must be deleted with respect to the provincial sales tax component on which the Minister has assessed tax. Quite apart from that, with respect also to the zero-rated supplies, I have not seen a case recently in which a taxpayer has more amply demonstrated due diligence. He did everything that could reasonably be expected of him to ensure that the GST was properly collected and paid. He relied upon published bulletins and upon oral confirmation with officials of the Department of National Revenue.”

[10] In Roberts (supra) Bowman, T.C.J. said at paragraphs 5 to 11 inclusive:

“For the period January 1, 1991 to April 30, 1993 he declared GST of $14,065.86 and ITCs of $7,604.58. The Department of National Revenue in auditing adjusted these figures to $15,808.62 and $7,127.36 respectively for a net tax adjustment of $2,219.98.

For the period May 1, 1993 to October 31, 1994 he filed no returns and the Minister, on the basis of his records, calculated his GST at $11,057.63 and his ITCs at $4,718.12 for a net tax of $6,339.51.

The appellant, as stated, does not dispute these adjustments. He argues however that having hired bookkeepers who turned out to be worse than useless, and having paid them almost $6,000, he has demonstrated due diligence as that expression is used in the decision of this court in Pillar Oilfield Project Ltd. v. The Queen, [1993] G.S.T.C. 49.

I can of course do nothing about the imposition of interest on deficient payments. That is automatic. The imposition of penalties although (incorrectly in my view) administratively automatic, is susceptible of a defence of due diligence. The Pillar Oilfield case has been followed in about 20 cases in this court. As the principle has been applied in this court, the threshold, however, is a fairly high one. Simple good faith is not enough.

Here it is true the appellant hired bookkeepers for one of the periods in question and paid them what appears to me to be excessive amounts for their incompetence and inaction. This might justify an action by the appellant against them, but it does not amount to due diligence. The accountants are after all the appellant’s agents and the appellant is responsible of what they did or failed to do. In the same way as the exercise of due diligence on the part of a taxpayer’s accountants or bookkeepers would be attributed to the taxpayer and would justify the removal of a penalty, so too does the absence of due diligence on the part of the taxpayer’s accountants or bookkeepers disentitle him or her to the relief envisaged by the Pillar Oilfield case.

So far as the second period is concerned, it would require a drastic rewriting of the definition of due diligence to interpret it as encompassing the failure to file returns at all.

In light of the difficulty that the appellant had in the first period with the overpaid and essentially useless bookkeepers, the Minister would be justified in waiving the interest and penalties on $2,219.98 under section 281.1 of the Excise Tax Act. That is however a matter within the discretion of the Minister. This court’s power to cancel penalties must be exercised within the ambit of the due diligence test set out in Pillar Oilfield.”

[11] While the defence of due diligence has been acknowledged in a number of decisions of this court that has not occurred in all appeals involving liability for penalties under paragraph 280(1)(a). I refer, for example, to Kornacker v. The Queen and Lawson v. The Queen, both of which have already been cited regarding interest. See also Breault v. The Queen, [1997] G.S.T.C. 25 (T.C.C.).

[12] On February 7, 1996 judgment was issued by this court in 770373 Ontario Ltd. v. The Queen. The appellant had been reassessed for penalties and interest under subsection 280(1) of the Act. The appeal was allowed regarding the penalties. The Attorney General of Canada made application for judicial review of that decision under section 28 of the Federal Court Act: Attorney General of Canada v. 770393 Ontario Ltd., [1997] G.S.T.C. 1. As reported in an editorial comment at page 1-3 the issue of the validity of the due diligence defence was thoroughly argued before the Court of Appeal. Nevertheless it chose to dispose of the application in this way. Strayer J.A.:

“The Court has found this application for judicial review to be difficult because no findings of fact and no reasons were given by the learned Tax Court Judge in support of his decision to set aside the penalty imposed on the respondent under s. 280 of the Excise Tax Act.

The only basis argued before us for supporting that decision has been the defence of due diligence, a matter adverted to briefly by the Minister’s counsel in the Tax Court. Even if in law there is a defence of due diligence to payment of the penalty under s. 280, a matter which we find it inappropriate to decide in these circumstances, we have been referred to no evidence before the trial judge, either in the transcript of the trial proceedings or in documents, that would have supported such a defence. We must therefore set aside the decision on the basis that it was made without regard to the evidence, even assuming that there was no error of law in applying a defence of due diligence.

The application will therefore be allowed, the decision of the Tax Court be set aside and the matter referred back to the Tax Court for determination in accordance with these reasons. Reasonable and proper costs will be awarded to the respondent in accordance with s. 18.3008 of the Tax Court of Canada Act.”

This same failure to resolve the issue was repeated by the Federal Court of Appeal in Locater of Missing Persons Inc. v. The Queen, [1997] G.S.T.C. 16.

[13] In my opinion the defence of due diligence exists in respect of penalties assessed under paragraph 280(1)(a) of the Act. Its existence is founded upon sound judicial principles.

[14] In the case at hand Mr. Paul Hunter signed the Notice of Appeal as president of the appellant. There is evidence that prior to becoming president he was a vice-president of the appellant. The inference to be drawn from the evidence is that at least for the purposes of what is relevant to this appeal Mr. Hunter was the directing mind and will of the appellant. He is a chartered accountant although he emphasized that he has not practiced that profession for 10 years and that he is no longer a member of the Canadian Institute of Chartered Accountants.

[15] The appellant charged fees to limited partnerships to manage commercial rental properties. Mr. Hunter states that it was not aware that the services were taxable supplies under the GST. This is alleged notwithstanding that early in the history of the GST the appellant retained the services of a well known national accounting firm. If that firm did in fact give insufficient or erroneous advice to the appellant, that does not go to establishing due diligence: Roberts (supra). I add that particulars of what the firm did or did not do were not spelled out in evidence at the hearing.

[16] The evidence of the respondent is that extracting required information from the appellant was a slow and arduous process. On more than one occasion it was considered necessary to send it a DEMAND FOR GOODS AND SERVICES TAX RETURN(S). Mr. Robert W. Ingram, an auditor with Revenue Canada, testified that in each of the quarters ending January 1991, April 1991, July 1991, October 1991, January 1992, April 1992, July 1992, October 1992 the appellant was late in filing the required returns. This tardiness ranged from five weeks to six months. The returns for the quarter ending January 1993 up to the quarter ending April 1994 were filed on July 20, 1994. Mr. Hunter said that some of these returns do not indicate tax owing. I accept that. But it does not really mitigate the delinquency in filing the returns in the context of this appeal.

[17] While the defence of due diligence did succeed in Somnus and Consolidated Canadian Contractors Inc., it will be seen from what is quoted in paragraphs 8 and 9 of these reasons from the reasons for judgment in those appeals, that the facts in the case at hand do not compare favourably with those in Somnus or Consolidated Canadian Contractors Inc. On the whole of the evidence the appellant in this appeal has not established due diligence.

[18] Finally the appellant claims entitlement to the benefits described in Technical Information Bulletin B-074 which is entitled: Guidelines For The reduction of Penalty and Interest in “Wash Transaction” Situations. It is sufficient for present purposes to reproduce these portions of B-074:

“Introduction

This bulletin explains the guidelines for the reduction of penalty and interest in ‘wash transaction’ situations.

Pursuant to the announcement made by the Minister of Finance on September 14, 1992 and the enactment of section 281.1 of the Excise Tax Act on June 10, 1993, c. 27, s. 127(1), the Minister of National Revenue (hereinafter referred to as the ‘Minister’) will consider waiving or cancelling all but a minimum portion of the penalty and interest payable by a person under section 280 of the Excise Tax Act where the penalty and interest charge is the direct result of a ‘wash transaction’. These guidelines do not affect a person’s obligation to pay or collect the tax payable for a taxable supply.

Wash Transactions

A ‘wash transaction’ occurs when a supply, taxable at the rate of 7%, is made and the supplier has not remitted an amount of net tax by virtue of not having correctly charged and collected the tax from the recipient who is a registrant and who would have been entitled to claim a full input tax credit if the tax had been correctly applied.

Administrative Guidelines for ‘Wash Transactions’

Where there is a ‘wash transaction’, the Minister will consider waiving or cancelling the portion of the penalty and interest, payable at the time of assessment, that is in excess of 4% of the tax not properly collected by the supplier.

Where it is determined that an amount of penalty and interest will be reduced to 4% of the tax not collected, the Minister will first waive or cancel all or a portion of the interest. In most cases, the remaining 4% will be penalty which is payable in addition to the amount assessed to account for the GST not properly charged.

Conditions

The Minister will consider waiving or cancelling the portion of the penalty and interest that is in excess of 4% of the tax not collected in a ‘wash transaction’ situation where the following conditions are satisfied:

(a) It must be demonstrated that the supply in question was made to a registrant who would have been entitled to a full input tax credit if the tax had been correctly applied.

(b) The supplier must not have been previously assessed for the same mistake and must have a satisfactory history of voluntary compliance.

(c) The supplier must have remedied the situation to ensure that tax is collected on future supplies of a similar nature.

(d) The supplier must have exercised reasonable care and diligence without being negligent or careless in the conduct of its affairs to ensure that tax is collected on all taxable supplies.”

It is made clear that the Bulletin is founded upon section 281.1 of the Act which provides that the Minister of National Revenue “may” waive or cancel interest or penalties or both payable by a person under section 280.[2]

[19] The purely discretionary nature of what is provided is emphasized in B-074. It is said in the Introduction that the Minister “will consider waiving or cancelling” penalties and interest. This is repeated under the heading Administrative Guidelines for “Wash Transactions” and Conditions.

[20] It was made certain in Somnus and the other authorities previously cited with reference to interest that this Court has no jurisdiction to review the Minister’s exercise of discretion under section 281.1.

[21] Stobbie Construction v. The Queen, [1996] G.S.T.C. 41 (T.C.C.) involved wash transactions. The Court gave effect to the due diligence defence in respect of penalties imposed under paragraph 280(1)(a) of the Act. It did not, however, interfere with the Minister’s exercise of discretion under section 281.1 in relation to interest payable under paragraph 280(1)(b). Lamarre, T.C.J. repeated what was said in Somnus about the lack of jurisdiction of this Court to review the exercise of the Minister’s discretion under section 281.1.

[22] The appeal is dismissed.

"D.H. Christie"

A.C.J.T.C.C.

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