REASONS
FOR ORDER
Sommerfeldt J.
[1]
These Reasons pertain to an Application by Peter
Pilgrim for an Order under subsection 166.2(1) of the Income Tax Act
(Canada) (the “ITA”), extending the time
for serving a Notice of Objection in respect of the 2009, 2010 and 2011
taxation years. The Application was heard in Calgary, Alberta on November 18,
2015. At the conclusion of the hearing, I dismissed Mr. Pilgrim’s Application,
on the ground that the Minister of National Revenue (the “Minister”) had failed to prove that the Notices of
Reassessment for the 2009 and 2010 taxation years and the Notice of Assessment
for the 2011 taxation year (collectively the “Notices”)
had been sent to the correct address of Mr. Pilgrim. I also ordered
and declared that, by reason of the Minister’s failure to send the Notices to
the correct address of Mr. Pilgrim, Mr. Pilgrim’s Notice of Objection for the
2009, 2010 and 2011 taxation years had been served on the Minister within the
time limited by paragraph 165(1)(a) of the ITA. I was asked to provide
written reasons for my decision.
[2]
The evidence considered at the hearing consisted
of an Affidavit by Mr. Pilgrim, viva voce testimony given by Mr.
Pilgrim, a nine-page document consisting of various photographs and a site plan
for a residential development known as “Riverview
Terrace” and located at 245 Red Deer Drive SW, Medicine Hat, Alberta, and
an Affidavit of Paul Sendher, who is employed by the Canada Revenue Agency
(the “CRA”) as a Litigation Officer in the Vancouver
Tax Services Office.
[3]
In September 2012 the CRA issued to Mr. Pilgrim Notices
of Reassessment for the 2009 and 2010 taxation years and a Notice of Assessment
for the 2011 taxation year (collectively defined above as the “Notices”). The Notices were mailed by the CRA on
September 28, 2012.
[4]
The issue in this Application is whether the Notices
were mailed to Mr. Pilgrim’s correct address.
[5]
Mr. Pilgrim testified that he did not receive
the Notices and that he first learned of the reassessments and the assessment
which were the subject of the Notices (collectively the “Assessments”) in late May or early June of 2014, when
he received his Notice of Assessment for the 2012 taxation year, which had been
mailed to him on May 15, 2014. The 2012 Notice indicated that a substantial
outstanding balance was owed by Mr. Pilgrim in respect of taxation years
preceding 2012. Mr. Pilgrim then contacted an accountant, who brought this
Application on Mr. Pilgrim’s behalf.
[6]
Attached to Mr. Sendher’s Affidavit as Exhibit “A” is a redacted printout from the CRA’s electronic
records showing the Assessments and a printout from the CRA’s electronic
records showing a history of Mr. Pilgrim’s mailing addresses from July 2010 to
October 2015. Based on the first portion of Exhibit “A”, it appears that the Assessments were issued by
the CRA on September 28, 2012. The second portion of Exhibit “A” shows that, from September 15, 2011 to May 8,
2014, the mailing address used by the CRA for Mr. Pilgrim was 245 Red Deer
Drive SW, Medicine Hat, Alberta, T1A 8P4. On May 8, 2014, the CRA changed its
records to show Mr. Pilgrim’s mailing address as 318 – 245 Red
Deer Drive SW, Medicine Hat, Alberta, T1A 8P4 (emphasis added).
[7]
During the hearing, it was counsel for the
Respondent who first noticed that the address to which the CRA had mailed the
Notices was not the complete address of Mr. Pilgrim. At that point, counsel for
the Respondent graciously acknowledged that the CRA had not mailed the Notices
to Mr. Pilgrim’s correct address.
[8]
The history of mailing addresses used by the CRA
for Mr. Pilgrim, as set out in the second portion of Exhibit “A” to Mr. Sendher’s Affidavit, also indicates that on
September 15, 2011, December 5, 2011 and May 8, 2014, items mailed to Mr.
Pilgrim were returned to the CRA, suggesting that the CRA was aware, or could
have been aware, that 245 Red Deer Drive SW (i.e., without showing 318 as the
unit number) was not the correct address for Mr. Pilgrim.
[9]
During his testimony, Mr. Pilgrim indicated that
245 Red Deer Drive SW, Medicine Hat is the address of a large residential development
known as Riverview Terrace. Mr. Pilgrim’s agent tendered a document, which was
entered as Exhibit A-1, containing photographs of the exterior of Riverview
Terrace, a site plan and a photograph of the intercom directory located near
the front entrance of Riverview Terrace. The site plan shows that there are
approximately 115 on-site surface parking stalls in the parking lot at
Riverview Terrace. The photograph of the intercom directory at Riverview
Terrace indicates that there are 79 suites or units in that development.
[10]
Mr. Pilgrim’s agent submitted that Riverview
Terrace is such a large development that an occupant’s unit number is an
essential component of the address of that occupant. I concur with that
submission. Furthermore, as indicated above, between September 15, 2011 and May
8, 2014 at least three items were mailed by the CRA to the incomplete (i.e.,
without showing “318” as Mr. Pilgrim’s unit number)
address of Mr. Pilgrim and were subsequently returned to the CRA, presumably
without having been delivered to Mr. Pilgrim. Thus, it is plausible that other
items, such as the Notices, which were mailed with an incomplete address for
Mr. Pilgrim, may similarly not have been delivered.
[11]
Paragraph 166.1(7)(a) of the ITA
provides that an application to the CRA to extend the time for serving a notice
of objection must be made within one year after the expiration of the time
otherwise limited by the ITA for serving a notice of objection. As the Notices
were purportedly mailed by the CRA on September 28, 2012, the CRA took the
position that the deadline for making an application under subsection 166.1(1)
of the ITA was December 27, 2013 for the 2009 and 2010 taxation years
and April 30, 2014 for the 2011 taxation year. Those supposed deadlines were
calculated by reference to paragraph 165(1)(a) of the ITA, which
provides that the deadline for objecting to an assessment is the later of:
a.
the day that is one year after the particular
taxpayer’s filing-due date for the year, and
b.
the day that is 90 days after the day of sending
of the notice of assessment.
[12]
Subparagraph 165(1)(a)(ii) of the ITA
only requires, in essence, that a notice of assessment be sent. It does not
require that it be received. This can work a harsh result. For instance, in Chomatas
v The Queen,
this court stated that the period of one year and 90 days during which an
application to extend time may be made starts to run when the notice of
assessment is sent, and that receipt of the notice is not necessary, such that
a taxpayer’s right to object could expire without the taxpayer even knowing
about the assessment.
[13]
However, where a taxpayer alleges that a notice
of assessment or reassessment was not mailed or otherwise communicated to him,
the Minister bears the burden of proving that the notice was mailed or
otherwise communicated to the taxpayer.
[14]
It is incumbent upon the Minister to mail or
otherwise send a notice of assessment or reassessment to a taxpayer’s correct
address. In Scott v MNR,
the Exchequer Court stated:
… the giving of
notice of assessment is part of the fixation operation referred to as an
assessment in the statute and … an assessment is not made until the Minister
has completed his statutory duties as an assessor by giving the prescribed
notice….
… it would seem
apparent that Parliament intended that such notices [of assessment] should be
given by post. This, however, being itself an inference from language used in
the statute, it is in my opinion also to be inferred that Parliament never
intended that such a notice could be given effectively by the “mailing” of it to the taxpayer at some wrong or
fictitious address and I find nothing in the statute to suggest that Parliament
intended that a taxpayer should be bound by an assessment or fixed with notice
of an assessment upon the posting of a notice thereof addressed to him
elsewhere than at his actual address or at an address which he has in some
manner authorized or adopted as his address for that purpose.… [In] Societa
Principessa Iolanda Margherita di Savoia (fondata dai Bonitesi), Inc. v.
Broderick) (1932), 183 N.E. 382, … Kellogg, J., speaking for the Court of
Appeals of New York, said at page 384:
“When the
statute says that the superintendent ‘shall cause said notice to be mailed’…, we
think the intent clear that the notice must be ‘mailed’ with an appropriate
address upon the envelope;”
… such a mailing or sending [to an incorrect address] was not a
valid mailing or sending within the meaning of [the applicable provision] of
the Act….
[15]
In accordance
with the above principle, the Federal Court of Appeal has held that the fact
that a notice of reassessment was sent to a wrong address leads to the
conclusion that the reassessment was not issued at all.
[16]
As observed
above, from September 15, 2011 to May 8, 2014, the CRA was using an incomplete
address for Mr. Pilgrim. In particular, the address did not show the number of
his unit in Riverview Terrace. During this period, at least three items purportedly
sent by the CRA to Mr. Pilgrim were returned to the CRA as undelivered, with
the result that the CRA should have been on notice that it did not have an
appropriate address for him.
[17]
No evidence was
presented at the hearing as to how the CRA came to have an incomplete address for
Mr. Pilgrim or how it came to learn his complete address on or about May 8,
2014. It is possible that Mr. Pilgrim provided an incomplete address to the
CRA, and it is also possible that he provided the complete address but the CRA
incorrectly entered it into its computer. For the purposes of this Application,
I am prepared to give the benefit of the doubt to Mr. Pilgrim.
[18]
Accordingly, I
find that the CRA did not send the Notices to Mr. Pilgrim. Therefore, the
limitation period contemplated by subparagraph 165(1)(a)(ii) of the
ITA did not begin to run, with the result that Mr. Pilgrim’s Notice
of Objection was served on the Minister within the time limited by paragraph
165(1)(a) of the ITA.
[19]
Hence, there is
no need for Mr. Pilgrim to apply to extend the time for serving the Notice of
Objection. Thus, the issue of whether Mr. Pilgrim’s application under
subsection 166.1(1) of the ITA was made on or before the deadline
contemplated by paragraphs 166.1(7)(a) and 166.2(5)(a) of the ITA
is moot.
[20]
Given that Mr. Pilgrim’s
Notice of Objection was served on a timely basis, the appropriate disposition
of this Application is to dismiss it, on the ground that the Minister has failed to prove that the Notices
were sent to the correct address of Mr. Pilgrim.
Signed at Ottawa, Canada,
this 1st day of December 2015.
“Don R. Sommerfeldt”
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