Date: 20100203
Docket: T-207-09
Citation:
2010 FC 116
Ottawa, Ontario, February 3,
2010
PRESENT: The Honourable Mr. Justice Boivin
BETWEEN:
RODIN
LEMERISE
Applicant
and
THE
ATTORNEY GENERAL OF CANADA
Respondent
REASONS FOR JUDGMENT AND JUDGMENT
[1]
This
is an application for judicial review of a decision by Mario Marchand, Manager
of Client Services at the Canada Revenue Agency (the Agency), dated January 15,
2009, denying the applicant’s request for relief seeking the cancellation of
interest and penalties for the late filing of his income tax return for the
2006 taxation year, under subsection 152(4.2) of the Income Tax Act, R.S.C.
1985, c. 1 (5th Supp.) (the Act).
[2]
In
the case at bar, the applicant is representing himself.
Factual background
[3]
The
applicant, Rodin Lemerise, was late in filing his income tax return for the 2006
taxation year. He filed his tax return nearly one year late, on April 14, 2008,
when the deadline for filing had been April 30, 2007.
[4]
On
May 1, 2008, the Agency sent a notice of assessment for 2006 in which interest
and penalties were imposed on the applicant for the late filing of his income
tax return.
[5]
On
June 2, 2008, the applicant made a first request for relief seeking the
cancellation of the late filing penalty in the amount of $223.40 and interest
on arrears in the amount of $140.29 from January 2009. The applicant claims he
suffers from Attention-Deficit Hyperactivity Disorder (ADHD) and that this
condition was the main reason why he was late in filing his income tax return
and that this is a situation beyond his control.
[6]
On
September 5, 2008, the applicant received the Agency’s decision advising him
that his request for relief had been denied.
[7]
On
October 24, 2008, the applicant applied to the Agency for a review of the
decision dated September 5, 2008. For the purposes of this application, a
client services officer at the Agency named Claude Gagnon was tasked with
preparing a recommendation for his supervisor, Mario Marchand. Mr. Gagnon
relied on the information and evidence submitted by the applicant, including Information
Circular IC07-1 – Taxpayer Relief Provisions (Circular IC07-1).
[8]
On
January 13, 2009, after reviewing all of the documents submitted by the
applicant, Claude Gagnon recommended not cancelling the interest and penalties
that were the subject of the applicant’s request for relief.
[9]
On
January 15, 2009, Mario Marchand, on behalf of the Minister, informed the
applicant that his request had been denied, stating that no extraordinary
circumstances had prevented the applicant from filing his income tax return on
time.
[10]
The
applicant is challenging the January 15, 2009 decision.
Issues
[11]
The
only issue in the case at bar is whether the Minister exercised his discretion
in accordance with subsection 220(3.1) of the Act in denying the applicant’s
request to have the interest and penalties cancelled.
Relevant legislation
[12]
Income
Tax Act,
R.S.C. 1985, c. 1 (5th Supp.):
|
220.
(3.1) The
Minister may, on or before the day that is ten calendar years after the end
of a taxation year of a taxpayer (or in the case of a partnership, a fiscal
period of the partnership) or on application by the taxpayer or partnership
on or before that day, waive or cancel all or any portion of any penalty or
interest otherwise payable under this Act by the taxpayer or partnership in
respect of that taxation year or fiscal period, and notwithstanding
subsections 152(4) to (5), any assessment of the interest and penalties
payable by the taxpayer or partnership shall be made that is necessary to
take into account the cancellation of the penalty or interest.
|
220.
(3.1) Le
ministre peut, au plus tard le jour qui suit de dix années civiles la fin de
l’année d’imposition d’un contribuable ou de l’exercice d’une société de
personnes ou sur demande du contribuable ou de la société de personnes faite
au plus tard ce jour-là, renoncer à tout ou partie d’un montant de pénalité
ou d’intérêts payable par ailleurs par le contribuable ou la société de
personnes en application de la présente loi pour cette année d’imposition ou
cet exercice, ou l’annuler en tout ou en partie. Malgré les paragraphes
152(4) à (5), le ministre établit les cotisations voulues concernant les
intérêts et pénalités payables par le contribuable ou la société de personnes
pour tenir compte de pareille annulation.
|
|
152.
(4.2)
Notwithstanding subsections (4), (4.1) and (5), for the purpose of
determining, at any time after the end of the normal reassessment period of a
taxpayer who is an individual (other than a trust) or a testamentary trust in
respect of a taxation year, the amount of any refund to which the taxpayer is
entitled at that time for the year, or a reduction of an amount payable under
this Part by the taxpayer for the year, the Minister may, if the taxpayer
makes an application for that determination on or before the day that is ten
calendar years after the end of that taxation year,
(a)
reassess tax, interest or penalties payable under this Part by the taxpayer
in respect of that year; and
(b)
redetermine the amount, if any, deemed by subsection 120(2) or (2.2),
122.5(3), 122.51(2), 122.7(2) or (3), 127.1(1), 127.41(3) or 210.2(3) or (4)
to be paid on account of the taxpayer’s tax payable under this Part for the
year or deemed by subsection 122.61(1) to be an overpayment on account of the
taxpayer’s liability under this Part for the year.
|
152.
(4.2)
Malgré les paragraphes (4), (4.1) et (5), pour déterminer, à un moment donné
après la fin de la période normale de nouvelle cotisation applicable à un
contribuable — particulier, autre qu’une fiducie, ou fiducie testamentaire —
pour une année d’imposition le remboursement auquel le contribuable a droit à
ce moment pour l’année ou la réduction d’un montant payable par le
contribuable pour l’année en vertu de la présente partie, le ministre peut,
si le contribuable demande pareille détermination au plus tard le jour qui
suit de dix années civiles la fin de cette année d’imposition, à la
fois :
a) établir de nouvelles
cotisations concernant l’impôt, les intérêts ou les pénalités payables par le
contribuable pour l’année en vertu de la présente partie;
b) déterminer de nouveau
l’impôt qui est réputé, par les paragraphes 120(2) ou (2.2), 122.5(3),
122.51(2), 122.7(2) ou (3), 127.1(1), 127.41(3) ou 210.2(3) ou (4), avoir été
payé au titre de l’impôt payable par le contribuable en vertu de la présente
partie pour l’année ou qui est réputé, par le paragraphe 122.61(1), être un
paiement en trop au titre des sommes dont le contribuable est redevable en vertu
de la présente partie pour l’année.
|
Standard of review
[13]
The
Federal Court of Appeal determined that the applicable standard of review for a
discretionary decision of the Minister under the fairness provisions of the Act
is reasonableness (Lanno v. Canada (Customs and Revenue Agency), 2005 FCA 153,
334 N.R. 348 and Comeau v. Canada (Customs and Revenue
Agency),
2005 FCA 271, 361 N.R. 141).
Analysis
[14]
According
to the applicant, the Minister’s denial shows a lack of understanding about ADHD.
The applicant explained that his repeated late filings in previous years were
the result of ADHD rather than any negligence or carelessness on his part,
because people with ADHD constantly repeat the same mistakes. He explained that
he is not a negligent or careless person and that he has managed to conduct
himself very responsibly in his professional life. The applicant claims that
neither his testimony nor his doctor’s diagnosis was taken seriously by the
Minister. According to his claims, the Minister made his decision on the basis
of the applicant’s past failings and without considering his medical condition.
[15]
The
applicable rules in matters of taxpayer relief are found in the guidelines of
Circular IC07-1. These guidelines do not have the force of law and cannot fetter
the Minister’s discretion (Sutherland v. Canada (Customs and
Revenue Agency), 2006 FC 154, 146 A.C.W.S. (3d) 380 at paras. 16-17), but
can be used to facilitate the exercise of his discretion.
[16]
Under
section 23 of the guidelines, the Minister may grant relief from the
application of penalties and interest where certain types of situations exist
and justify a taxpayer’s inability to satisfy a tax obligation. The types of
situations listed include ‘‘extraordinary circumstances’’.
[17]
Section
25 of the guidelines specifies that a serious illness or accident may qualify
as ‘‘extraordinary circumstances’’ that may have prevented a taxpayer from
complying with an obligation under the Act, such as filing a return on time.
[18]
In
the case at bar, the applicant cited the disorder as grounds in support of his
request for relief. He explained that he suffered from ADHD.
[19]
In
his efforts to obtain a reduction or cancellation of the penalties and
interest, the applicant provided information in support of his request, as required
by the guidelines. Based on the information provided, the Minister had to
determine whether the applicant’s ADHD constituted circumstances beyond his
control and, if so, whether these circumstances prevented or may have prevented
the applicant from complying with the Act.
[20]
In
support of his request, the applicant submitted a note from Dr. Bernard
Lafrenière dated April 8, 2008. The difficulty for the applicant lies in the
fact that this letter fails to explain how the state of his health would have
prevented him, as an ‘‘extraordinary circumstance’’ (ss. 23 and 25 of the
guidelines), from filing his 2006 income tax return within the time allotted by
the Act. In fact, the information in the letter is, by and large, quite
limited. For example, (i) the letter does not mention what dosage was
recommended to the applicant by the doctor; (ii) it does not explain what
effects the medication may have on the applicant; (iii) it does not indicate
how long the applicant has been on medication; (iv) it does not address the
applicant’s general health – i.e., why the applicant performs well in some
areas of activity and less well in others; and (v) in what way the medication may
hamper the applicant in his ability to perform certain tasks, such as filing
his annual tax return. In light of the note provided by the applicant, the Court
is of the view that it would have been difficult for the Minister to find that
the applicant is unable to file his income tax returns within the time allotted
by the Act.
[21]
In
addition, the decision dated September 5, 2008, noted that many of the
applicant’s prior income tax returns, namely those for the years 1986, 1987,
1988, 1989, 1990, 1991, 1992, 1993, 1994, 1995, 1996, 1997 and 2004, had been
filed after the deadline. The Court noted that among the factors used in making
his decision, the Minister may consider whether or not the taxpayer has a
history of compliance with tax obligations (s. 33 of the guidelines).
[22]
However,
the letter dated September 5, 2008, also shows that between 1998 and 2003, as
well as in 2005, the applicant was able to file his returns on time.
[23]
Section
32 of the guidelines imposes on the applicant the onus of providing the Agency
with all of the relevant information in support of his request for relief. In
fact, it is well established that taxpayers who cite their medical condition in
support of a request for relief from penalties or interest have the burden of
proving that their illness or medical condition was a factor beyond their
control and that the interest owed was primarily caused by this factor (Young
v. Canada, (1997), 138 F.T.R. 37, 76 A.C.W.S. (3d) 447 at para. 19 (F.C.T.D).
Therefore, the burden of proof lay with the applicant and not the Agency.
[24]
It
is not for the Court to decide whether the Minister was right or wrong, but
whether he considered all of the evidence before him in a fair manner so as to
determine whether the applicant’s failure to comply with the Act was caused by
factors beyond his control. The issue is not whether the Court would have
rendered a different decision, but rather whether the Minister’s decision was
reasonable given the applicant’s evidence in support of his claim.
[25]
Lastly,
the applicant submitted that he had three (3) years to file his income tax
return. The Court disagrees. In fact, under section 150 of the Act, a return of
income must be filed for each taxation year of a taxpayer. The prescribed
period of three (3) years under section 64 in the guidelines referred to by the
applicant applies instead to cases in which the taxpayer is entitled to a tax
refund, which is not the case here.
[26]
After
examining the record and hearing the parties, the Court is satisfied that the
Minister exercised his discretion in good faith and in accordance with the
principles of natural justice. The Court finds that the Minister reviewed the
evidence before him and that the decision did not rely on considerations
irrelevant or extraneous to the statutory purpose (Maple Lodge Farms v.
Canada, [1982] 2 S.C.R. 2, 44 N.R. 354 at para. 8).
[27]
For
these reasons, the application for judicial review is dismissed. The Court, in
exercising its discretion, has determined that there will be no costs awarded.
JUDGMENT
THE COURT
ORDERS AND ADJUDGES that the
application for judicial review be dismissed without costs.
‘‘Richard
Boivin’’
Certified true
translation
Sebastian Desbarats,
Translator
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