Docket: 2012-4968(GST)APP
BETWEEN:
ALAIN BELLEMARE,
Applicant,
and
HER MAJESTY THE QUEEN,
Respondent.
____________________________________________________________________
Application
heard on October 29, 2013 at Montreal, Quebec.
Before: The Honourable
Justice Patrick Boyle
Appearances:
|
Counsel for the Applicant:
|
Marc
B. Bilodeau
|
|
Counsel for the Respondent:
|
Philippe Gilliard
|
____________________________________________________________________
ORDER
UPON application for an Order extending the time within
which a Notice of Objection may be filed with respect to the assessment dated December
3, 2010 made under the Excise Tax Act;
AND UPON hearing from the parties;
IT IS ORDERED that the application is
dismissed, without costs.
Signed at Ottawa, Canada this 29th day of November
2013.
"Patrick Boyle"
Citation: 2013 TCC 381
Date: 20131129
Docket: 2012-4968(GST)APP
BETWEEN:
ALAIN BELLEMARE,
Applicant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR ORDER
Boyle J.
[1]
The taxpayer, Mr.
Bellemare, wishes to object to a director’s liability assessment issued against
him on December 3, 2010 by the Minister of Revenue of Quebec (“MRQ”) under
section 323 of the Excise Tax Act. The assessment is with respect to a
debt of Sinibelle Inc. (“Sinibelle”). However, having missed the time prescribed
for filing an objection, Mr. Bellemare sought an extension from the tax
authorities, which was denied. Mr. Bellemare has made application to this Court
for the needed extension.
[2]
Mr. Bellemare’s spouse
was the sole shareholder and director of Sinibelle. However, it is the
Respondent’s position that Mr. Bellemare was a de facto director of Sinibelle,
and the assessment was issued on that basis.
[3]
Prior to the assessment
in question, Mr. Bellemare had been assessed as a director of 9092-8201 Québec
Inc. (“9092”) of which he was the sole director. The 9092 assessment is not
related to the Sinibelle assessment except that they were both issued to Mr.
Bellemare as director, and the 9092 assessment had not yet been paid when the Sinibelle
assessment was issued. Also, before the Sinibelle assessment was issued, Mr.
Bellemare had made a bankruptcy proposal that extended to his debt relating to
the 9092 assessment.
[4]
According to Mr.
Bellemare’s statements at the initial hearing of this application, upon receipt
of the Sinibelle assessment he gave it to his spouse as she was the sole
shareholder and director of Sinibelle. He then discussed it with his trustee in
bankruptcy, who advised him that it must have been issued in error because he
was not shown as a director of Sinibelle on the relevant corporate records.
[5]
According to Mr.
Bellemare, he received nothing further from the tax authorities regarding the Sinibelle
assessment, nor did he hear anything further about it from his trustee in
bankruptcy during the proposal period. Then, the week after the expiry of the one-year-and-90-day
maximum period for filing an objection, Mr. Bellemare’s bank debit card
purchase at a grocery store was declined by his financial institution. Upon inquiring,
his bank advised him that the tax authorities had seized his account. In fact,
the authorities seized his accounts at both Caisse Desjardins and Banque
Nationale on March 12, 2012.
[6]
It is clear that Mr.
Bellemare only made application for an extension of the time within which to
object after that incident, that is, more than one year after the normal 90 day
period for objecting had passed. For that reason, the tax authorities were
correct in not permitting him to late file an objection to his Sinibelle
assessment.
[7]
It is also clear that,
after receiving the tax authorities’ decision on his late- filing application,
Mr. Bellemare then also missed the thirty-day period time for applying to this
Court for permission to file an objection late. He missed this thirty- day time
limit by only a matter of days. The thirty-day period, along with the one-
year-and-90-day period, is fixed by law and this Court has no jurisdiction not
to apply it on grounds of equity, fairness or otherwise. For both of these
reasons, Mr. Bellemare’s application to file an objection late must be
dismissed by this Court.
[8]
However, at the initial
hearing, Mr. Bellemare was concerned that it appeared that the tax authorities
had waited to take any collection steps, or even to send him statements of
account or reminders regarding the Sinibelle tax debt, with a view to frustrating
his right to object to the assessment.
[9]
The Court took his
concern seriously in the circumstances. Canadians would be rightly disappointed
if it turned out that the tax authorities lie in wait for appeal periods to
expire before continuing their communication with the taxpayers or beginning
collection proceedings. Mr. Bellemare certainly had a history with the tax
authorities. Taxpayers may come to court without entirely clean hands. However,
the Respondent is the government and Canadians rightly expect the government to
act in good faith throughout, for proper purposes, and with clean hands. If it
were otherwise, our tax collection system, which relies firstly and largely on
voluntary compliance and self-reporting and assessment, would quickly erode.
[10]
The initial hearing was
adjourned to allow the Respondent to produce evidence with regard to whether
Mr. Bellemare was correct in stating that there had been no follow-up steps
taken until after all his rights of appeal had expired, and if Mr. Bellemare
was not correct, to submit evidence of the steps taken.
[11]
The hearing resumed
months later after the Respondent filed the affidavit of a Ministère du Revenu
du Québec collections officer. The affiant also testified at the continued
hearing and tendered documentary evidence.
[12]
It does not appear that
the MRQ, acting on behalf of the Canada Revenue Agency (“CRA”), took any steps
to collect the debt at issue until after the period for objecting had expired
as can be seen from the following:
(i) There were no
statements of account or letters showing the amount of the Sinibelle assessment
after it was originally issued.
(ii) The legal hypothec on
Mr. Bellemare’s house was not amended to increase it beyond the amount of the
9092 assessment. This could not be satisfactorily explained, even though the
house was sold and the MRQ received an amount equal to the 9092 assessment out
of the proceeds.
(iii) While the
Respondent’s witness thought the claim in bankruptcy would have been amended to
add the amount of the later Sinibelle assessment, no amended claim in
bankruptcy was put in evidence nor had the witness inquired about the actions
or reasoning of her predecessor on the file. Mr. Bellemare does not recall
seeing a revised claim referring to the Sinibelle assessment.
(iv) The letter sent by the
MRQ to Mr. Bellemare after his proposal was annulled does not refer to the
Sinibelle assessment nor does the amount referred to therein include the amount
of the Sinibelle assessment.
(v) There was no evidence
that the bank accounts seized after the objection period expired had been newly
opened by Mr. Bellemare or only recently been discovered by the MRQ.
[13]
In short, having
adjourned the hearing so that the Respondent could answer Mr. Bellemare’s
concern, having read the affidavit filed, having heard the Respondent’s witness,
and having read the correspondence tendered in evidence, I continue to share
Mr. Bellemare’s concern. It certainly appears to be a remarkable coincidence
that the MRQ’s collection steps began the week after Mr. Bellemare’s objection
period expired. This remains a coincidence that the MRQ is unable to explain
satisfactorily.
[14]
This Court has no
jurisdiction to remedy Mr. Bellemare’s concern should it be proven true, nor
does this Court have any jurisdiction to tell the CRA or the Ministère du
Revenu du Québec how to conduct itself in administering Canadian tax
legislation. However, having listened to Mr. Bellemare’s concern and given the
Respondent full opportunity to respond, I continue to be concerned. I would
hope that the appropriate persons delve into this to determine if internal processes,
policies or training the CRA and/or the Ministère du Revenu du Québec should be
improved.
[15]
Mr. Bellemare is
clearly out of time for obtaining from this Court an extension of the time
within which he may file his objection to his Sinibelle assessment. This Court
must therefore dismiss his application. The application is accordingly dismissed.
Signed at Ottawa, Canada this 29th day of November 2013.
"Patrick Boyle"
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