Date: 20020621
Docket: T-1561-01
Neutral citation: 2002 FCT 655
Ottawa, Ontario, this 21st day of June 2002
PRESENT: The Honourable Madam Justice Layden-Stevenson
BETWEEN:
HARRY E. CHAPMAN,
Applicant,
- and -
MINISTER OF NATIONAL REVENUE,
Respondent.
Heard at Fredericton, New Brunswick on June 10, 2002
Reasons delivered orally from the bench at Fredericton, New Brunswick on June 10, 2002
Let the attached edited version of the transcript of my Reasons for Order delivered orally from the bench at Fredericton, New Brunswick on June 10, 2002 be filed to comply with section 51 of the Federal Court Act.
___________________________________
Judge
Ottawa, Ontario
June 21, 2002
File No. T-1561-01
IN THE FEDERAL COURT OF CANADA
TRIAL DIVISION
JUDICIAL DISTRICT OF FREDERICTON
B E T W E E N:
HARRY E. CHAPMAN,
Applicant
- and -
THE MINISTER OF NATIONAL REVENUE,
Respondent
DATE OF HEARING: June 10, 2002
DATE OF DECISION: June 10, 2002
APPEARANCES:
Harry Chapman, appearing on his own behalf
John J. Ashley, Esq., for the respondent
REASONS FOR ORDER
Layden-Stevenson, J. (Orally)
This is an application for judicial review of the decision of the Minister of National Revenue, dated July 31, 2001, wherein the Minister denied the applicant's, Mr. Chapman's, request for waiver of penalties and interest with respect to Mr. Chapman's personal income tax for the 1996, 1997, 1998, 1999 and 2000 taxation years. Mr. Chapman's request was made under what is commonly referred to as the "fairness provision" of the Income Tax Act, which is found at sub-section 220(3.1) of the Act.
The applicant, beginning in 1997, encountered various personal difficulties, the details of which need not be reviewed here. The difficulties had a significant impact on the applicant's income and his ability to meet his financial obligations. Between 1998 and 2000, the applicant made a series of requests for waivers of penalties and interest with respect to his personal income tax and his GST/HST accounts for the 1996, 1997, 1998, 1999 and 2000 income tax years.
The subject matter of this application relates to the applicant's request, on September 18, 2000 and a further request by his representative on March 29, 2001, that the applicant's penalties and interest, related to his personal income tax for the years 1996 to 2000 inclusive, be waived. By correspondence dated July 31, 2001, the delegate of the Minister informed the applicant that:
After reviewing the financial information that you have
provided, I have concluded that a waiver of interest for financial reasons, beyond the one year mentioned in the letter, is not warranted at this time. I will confirm, however, the waiver for interest on your 1996 arrears for a period of one year beginning the date of the letter mentioned above, which is July 23, 1999. This waiver will be contingent on you making arrangements immediately to pay all outstanding arrears.
It is from this decision that the applicant seeks judicial review.
The jurisdiction of the Court, Federal Court Trial Division, with respect to matters of this nature has been outlined by the Federal Court of Appeal in the decision of Baron v. Minister of National Revenue, which is reported at (1997) 2 C.T.C., 198. I am quoting a passage from that decision:
When an application for judicial review is directed against a
decision made in the exercise of a discretion, the Reviewing Court is not called upon to exercise the discretion conferred on the person who made the decision. The Court may intervene and set aside the discretionary decision under review only if that decision was made in bad faith, if its author clearly ignored some relevant facts or took into consideration irrelevant facts or if the decision is contrary to law.
On the hearing of the application for judicial review, the applicant's arguments related to the merits of his request for relief; it is not the function of this Court to examine the merits of the applicant's claim. In the written submissions, the applicant alleges two grounds upon which judicial review, in the applicant's submission, should be granted.
The first ground is fairness. The applicant does not allege a breach of procedural fairness. The allegation is that because the applicant was successful in his request for waiver of interest and penalties with respect to his GST/HST claim, he should also be successful in his request in relation to his personal income tax. The matter in relation to the GST/HST request was determined by correspondence dated August 31, 2000, some eleven months prior to the decision in this matter and also prior to the September 18, 2000 and March 29, 2001 requests of the applicant regarding his personal income tax. In essence, the argument is that the applicant received different treatment by the different ministerial delegates and that the inconsistency in the decisions renders the decision before the Court, that of July 31, 2001 regarding the personal income tax, unfair.
Counsel for the Minister, quite rightly notes that there is no evidence before this Court relative to the information upon which the ministerial delegate's decision in relation to the GST/HST was made, other than that the wording of the statutory sub-sections of the Excise Act are similar to those under the Income Tax Act. Even if there were such evidence, inconsistency in decisions does not constitute a ground for judicial review.
In that respect, I refer to the decision of the Supreme Court of Canada, by which I am bound, in Domtar Inc. v. Quebec (Commission d'appel en matière de lésions professionelles) which is reported at [1993] 2 S.C.R. 756. I am quoting specifically from page 800, a unanimous decision written by Madam Justice L'Heureux-Dubé, wherein Her Ladyship stated:
If Canadian administrative law has been able to evolve to
the point of recognizing that administrative tribunals have the authority to err within their area of expertise, I think that, by the same token, a lack of unanimity is the price to pay for the decision-making freedom and independence given to the members of these tribunals. Recognizing the existence of a conflict in decisions as an independent basis for judicial review would, in my opinion, constitute a serious undermining of those principles. This appears to me to be especially true as the administrative tribunals, like the legislature, have the power to resolve such conflicts themselves. The solution required by conflicting decisions among administrative tribunals thus remains a policy choice which, in the final analysis, should not be made by the courts.
And further to the Domtar case is the decision, again, of the Supreme Court of Canada, by which I am bound, in Shaw Cable Systems (B.C.) Ltd. and Canadian Radio-Television and Telecommunications Commission et al., which is reported at [1995] 2 S.C.R., 739. I am quoting from page 770, again, the decision of Madam Justice L'Heureux-Dubé.
¼it is important to note that such an abandonment of curial
deference is only appropriate in those few cases where there is true operational irreconcilability of administrative decisions. Conflicts should not be sought out or artificially created by the courts as a justification for judicial interference. Instead, judicial interference should only be contemplated where it is impossible to comply with two administrative decisions in that they are in direct operational conflict.
And for the benefit of the applicant, I would say that operational conflict is a situation where it is literally impossible to comply with the decisions of both tribunals because the decisions conflict one with the other, and you cannot do opposite things. That is not the situation here.
In my opinion, the comments that I have just quoted from those cases are dispositive. But I do note, as well, that the requests for relief made by the applicant relate to different times. Although they cover the same time frame, they were made at different times. They were made under different statutes. The decisions were rendered by different ministerial delegates and the decisions were dated at different times. Each case must be decided on its merits. Had the ministerial delegate in this matter simply referred to and adopted the findings of the ministerial delegate under the Excise Act, he would, indeed, have been fettering the discretion granted to him under the legislation. So the first argument, that of fairness as a ground for judicial review, based on inconsistency in the decisions under the different pieces of legislation, fails.
The second argument is that reasons should have been given, more detailed reasons for the refusal. In this respect, the applicant relies on the Supreme Court of Canada judgment in Baker v. Canada (Minister of Citizenship and Immigration) reported at [1999] 2 S.C.R. 817.
The applicant is certainly correct that the Baker decision does require that reasons be provided in certain circumstances. Specifically, where the decision has important significance for the individual, where there is a statutory right of appeal or in other circumstances, some form of reasons should be required.
In Baker, recognizing that the Court should not impose a level of procedural formality that would unduly encumber the efficient administration of the department, the Court accepted the notes of the decision-maker as constituting the reasons for his decision. Here, the respondent's record contains various documents pertaining to the applicant's request, including the completed departmental fairness request summary as well as the financial information provided by the applicant.
These, coupled with the correspondence of July 31, 2001, provide sufficient reasons for the decision. It was open to the applicant to request production of those documents pursuant to Rule 317 of the Federal Court Rules, 1998. No such request was made. The information was provided in the respondent's record in any event. The decision of the ministerial delegate was discretionary and was based on financial information that had been provided by the applicant. In the result, the failure to give reasons argument also fails and, therefore, for the reasons given this morning, the application must be dismissed.
Since costs are within the discretion of the Court, I, in the exercise of that discretion, decline to award costs.
________________________________________
Carolyn A. Layden-Stevenson
Judge of the Federal Court of Canada
FEDERAL COURT TRIAL DIVISION
NAMES OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: T-1561-01
STYLE OF CAUSE: Harry E. Chapman
- and -
Minister of National Revenue
PLACE OF HEARING: Fredericton, New Brunswick
DATE OF HEARING: June 10, 2002
REASONS FOR ORDER : Justice Layden-Stevenson
DATED: June 10, 2002 (delivered orally from the Bench)
APPEARANCES:
Self-represented FOR THE APPELLANT
John L. Ashley FOR THE RESPONDENT
SOLICITORS OF RECORD:
Harry E. Chapman
11436 Route 105
Kilburn, NB
E7H 3W2 FOR THE APPELLANT
John L. Ashley
Department of Justice Canada
Atlantic Regional Office
Suite 1400, Duke Tower
5251 Duke Street
Halifax, Nova Scotia
B3J 1P3 FOR THE RESPONDENT
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