Date: 20110228
Docket: T-1884-10
Citation: 2011
FC 238
Vancouver, British
Columbia,
February 28, 2011
PRESENT: The Honourable Mr. Justice Shore
BETWEEN:
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VANITHA MOODLEY
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Applicant
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and
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CANADA REVENUE AGENCY
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Respondent
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REASONS FOR ORDER AND
ORDER
I. Introduction
[1]
To err in
an administrative decision is human; and, therefore, to reconsider before
consequences arise is to correct and begin anew.
[2]
To
reconsider, a party must be given the opportunity to begin anew by the
party that would stand to benefit by reconsideration before consequences
would have arisen.
II. Background
[3]
In a
motion presented by counsel for the Respondent, the Canada Revenue Agency has
conceded that the Applicant’s judicial review application should be allowed on
the basis that the minister did not properly exercise his discretion in denying
the Applicant’s fairness request under subsection 220 (3.1) of the Income
Tax Act (RSC 1985, c 1 (5th Supp), ss 220(3.1); and therefore,
that the matter be referred to the Minister for reconsideration and
redetermination. This is the same result that the Applicant would obtain from
the Court if successful.
[4]
In
addition, the Applicant has expressed concern as to whether the “due diligence
defence” will be considered upon reconsideration and redetermination by the
Minister. The Respondent also has agreed to the Applicant’s request for
consideration of the “due diligence defence” by the Minister in the course of
the reconsideration and redetermination.
[5]
The
Applicant consents to the motion if awarded costs.
[6]
Therefore,
the issue of costs remains the one outstanding issue.
III. Analysis
[7]
The Court
agrees with the Respondent that no costs should be awarded to the Applicant as
the Applicant made no attempts to resolve this matter. The Respondent brought
this motion as the Applicant, despite the Respondent’s concession, was prepared
to nonetheless proceed with her application.
[8]
In
responding to a letter of January 14, 2011 of the Respondent, which was not
made on a “without prejudice” basis, the Applicant did not seek
clarification of the specific error and basis upon which the Minister was
conceding, and did not raise this issue as an area of concern. There was also
no mention that costs, either for or against the Applicant, were a factor in
the Applicant’s decision not to discontinue her application for judicial
review. The Respondent was not made aware of these concerns until after the
Respondent served the Applicant with its motion materials.
[9]
The
Respondent is not seeking costs and requests that any costs to which the
Applicant may have been entitled be cancelled out by the costs incurred by the
Respondent in bringing this motion for an order allowing the judicial review
application. The Applicant did not make any settlement offers respecting costs
to the Respondent until after the motion materials had already been served and
filed.
[10]
Recognizing
that the issue of costs is solely within the discretion of the Court, the Court
has decided that each party will bear its own costs due to the reasons
described above.
ORDER
THIS COURT ORDERS that:
1. The Applicant’s
application for judicial review be granted and the Minister of National
Revenue’s (the Minister) October 14, 2010 decision denying a request by the
Applicant for a waiver of penalties and interest under subsection 220(3.1)
of the Income Tax Act be set aside.
2. The Applicant’s
subsection 220(3.1) request be referred to the Minister for reconsideration and
redetermination.
3. In addition, the
Court further acknowledges the “due diligence defence”,
which the Respondent has agreed to consider upon reconsideration and
redetermination by the Minister.
4. Each party is to
bear its own costs.
“Michel M.J. Shore”
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