Docket: T-2214-14
Citation:
2015 FC 926
Ottawa, Ontario, July 28, 2015
PRESENT: The
Honourable Madam Justice Strickland
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BETWEEN:
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DAN MASON
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Applicant
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and
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THE ATTORNEY
GENERAL OF CANADA
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Respondent
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JUDGMENT AND REASONS
[1]
This is an application for judicial review brought
by the Applicant, Dan Mason. As will be set out below, the Applicant does not
identify in his Notice of Application what decision he seeks to have reviewed. However,
in his written representations, and when appearing before me, he asserted that
the decision in question is whether or not the Canada Revenue Agency (“CRA”)
reasonably and properly issued third party demands to his clients.
[2]
For the reasons set out below, the application
for judicial review is dismissed.
Background
[3]
The Applicant is an accountant.
[4]
The Minister of National Revenue (“Minister”)
asserts that the Applicant did not file goods and services tax (“GST”) returns
for the tax years 2003 to 2011 as required by s 238 of the Excise Tax Act,
RSC, 1985 c E-15 (“Excise Tax Act”).
[5]
Notices of assessment (“Assessments”) were
issued to the Applicant for the reporting period of January 1, 2003 to December
31, 2011, pursuant to s 299 of the Excise Tax Act.
[6]
On October 5, 2011, the Applicant filed a Notice
of Appeal in the Tax Court of Canada in respect of the Assessments for the
reporting period of January 1, 2003 to December 31, 2007, alleging, amongst
other things, that the GST assessments were wrongly attributed to him. On
October 3, 2014, Justice Miller of the Tax Court of Canada issued his decision
in respect of the appeal, followed by an amended judgment on November 6, 2014, reducing
the Applicant’s debt (Docket: 2011-3228(IT)G, Mason v R, 2014 TCC 297). On
October 28, 2014, the Applicant filed a Notice of Appeal of Justice Miller’s
decision with the Federal Court of Appeal (Court File No. A-480-14).
[7]
On November 19, 2014, the Minister issued
Notices of Reassessment for the Applicant for the January 1, 2003 to December
31, 2007 reporting period, reducing the amount of tax owed in accordance with
the decision of the Tax Court of Canada.
[8]
Meanwhile, as the Applicant’s appeal to the Tax
Court proceeded, on March 25, 2014 and August 5, 2014, pursuant to ss 317(1), (2),
(3) and (6) of the Excise Tax Act, the Minister issued requirements to
pay (“Requirements to Pay”) for the January 1, 2003 to December 31, 2011
reporting period to persons that the Minister knew or suspected were, or would
become, liable to make a payment to the Applicant. The Requirements to Pay
referred to “DAN MASON (sometimes carrying on business as Mason and Associates
Certified General Accountant)”. The Applicant asserts that Mason and
Associates is a trade name for 401422 Alberta Ltd.
[9]
On March 28, 2014, the Applicant wrote to the
Tax Court of Canada advising that he had received three calls from clients who
had received Requirements to Pay and his alleged GST debt of $119,080.29. The
Applicant requested that the Tax Court of Canada issue an order quashing the
Minister’s collection action. According to the Applicant, the Tax Court was
unable to hear the request because it did not fall under its jurisdiction. However,
no response from the Tax Court was filed in support of that claim.
[10]
On September 2, 2014, the Applicant wrote to the
Minister requesting that the collection proceedings be stayed as the matter was
then before the Tax Court of Canada and would likely be before the Federal
Court of Appeal. He stated: “No amounts before the
court resemble anything close to the amount stated in the Third Party demand.
The demands are based solely on arbitrary notional assessments. Further, no
subsequent years can be dealt with until the Court rules on the years at bar”.
The Applicant followed up on his request for a stay on October 6, 2014, noting
that he had not yet received a response.
[11]
On October 28, 2014, having not received a
response from the Minister, the Applicant brought this application for judicial
review and, as noted above, on the same day he filed an appeal of the Tax Court
of Canada’s decision with the Federal Court of Appeal. In his application for
judicial review, the Applicant sought an injunction requiring the Minister to
cease collection activity until the matters before the Federal Court of Appeal
are finalized, as well as an injunction requiring the Minister to withdraw all
third party demands and to notify all parties that had received the demands of
the withdrawal. On that date, the Applicant also brought a motion in this
Court for the same injunctions that he seeks in this application. The Minister
then brought a cross-motion for an order to strike the Applicant’s application
for judicial review. The Minister argued that the Applicant’s application for
judicial review was premature, because the Minister had not yet issued a
decision with respect to the Applicant’s request for a stay and, therefore,
there was no decision to review.
[12]
As will be discussed in greater detail below,
Justice Gleason dismissed both the motion and the cross-motion by Order dated
November 12, 2014. Regarding the Minister’s cross-motion, Justice Gleason
explained that it was not plain and obvious that an application for judicial
review may not be brought in respect of decisions to issue Requirements to Pay,
as there may well have been reviewable decisions made by the Minister in this
matter. As to the Applicant’s motion, Justice Gleason found that the Applicant
had not established any of the three pre-requisites of the test for injunctive
relief outlined in RJR-MacDonald Inc v Canada (Attorney General), [1994]
1 SCR 311. The application did not raise a serious issue as it was clear that under
the Excise Tax Act the Minister was entitled to enforce GST assessments
while appeals were pending. The Applicant had also not established that he
would suffer irreparable harm through clear non-speculative evidence and, finally,
the balance of convenience favoured the Minister, given that the Tax Court of
Canada had found that the Applicant owed GST and failed to remit it.
[13]
By letter of January 12, 2015, the Minister
advised the Applicant there are no collection restrictions on GST accounts,
even if a registrant has filed an objection or an appeal. Therefore,
collection action would continue on his account. The Minister stated that she
was also satisfied that the actions taken by CRA officials were in line with
the CRA’s collections policies.
[14]
In his written submissions, the Applicant
submits that as an accountant whose clients use his services once a year, there
are no accounts receivables due to him. Further, that the Requirements to Pay
will cause his clients to stop using his services and that this loss of
clientele will bring about irreversible harm and damage to his ability to earn
an income and pay amounts owing. This was also the point that he emphasized
when appearing before me. However, as the Minister submits, this information
was not contained in the Applicant’s affidavit.
Issues
[15]
The Applicant presents the issues as follows:
1.
Whether or not the CRA reasonably and properly
issued third party demands to his clients;
2.
Whether or not an injunction should be allowed
requiring the CRA to remove the third party demands; and,
3.
An injunction requiring the Minister to cease
collection activity against the Applicant until the matter before the Federal
Court of Appeal is finalized.
[16]
In my view, these can be restated as:
1.
Should this Court grant an injunction staying
the Minister’s collection actions in relation to the GST amounts assessed
against the Applicant until such time as his appeal of the Tax Court of
Canada’s decision to the Federal Court of Appeal has been disposed of?
2.
Should this Court quash the Requirements to Pay
issued to third parties in respect of the GST amounts assessed against the
Applicant?
Preliminary Matter – Request for Adjournment
[17]
When the Applicant appeared before me on the
hearing date, he requested that this matter be adjourned. He had not
previously made a motion to that effect or written to the Court to make the
request. When asked the basis for the adjournment request, he advised that
there was new evidence that supported his claim that the Minister wrongfully
issued the Requirements to Pay. When asked as to the nature of this evidence,
the Applicant produced an email to him from a Mr. Aidan O’Callaghan dated June
12, 2015, which concerns a complaint made by the Applicant under the Privacy
Act, RSC, 1985, c P-21 (“Privacy Act”). The email states that the
Applicant’s original complaint was that the CRA did not have the authority to
collect a business number from him, and, to use that business number to match
the Applicant’s clients to him. The email states that the first matter had
been addressed and that a final report would articulate the position reached. As
to the second aspect of the complaint, the email states that as the Applicant
does not have a business number, it was difficult to understand how it could be
used as alleged. Further, that it would be difficult to proceed unless the
Applicant could provide evidence to show how the CRA was using business numbers
to match clients to the representative accounting firm.
[18]
The Minister opposed the request for an
adjournment as it had not been brought in a timely manner, there was no actual
evidence concerning the issues before the Court and the email did not suggest
that relevant evidence would follow.
[19]
Rule 36 of the Federal Courts Rules,
SOR/98-106 (“Federal Courts Rules”) permits the Court to adjourn a
hearing on such terms as it deems just. However, requests for adjournment must
be made by way of motion with an affidavit detailing the reasons for the request.
Adjournments will only be granted in exceptional circumstances (Parrish
& Heimbecker Ltd v Mapleglen (Ship), 2004 FC 1197; Canadian Council
of Professional Engineers v Memorial University of Newfoundland, [1999] FCJ
No 1197 (FCTD)). In this case, the email upon which the Applicant relies was
received one month ago. If the Applicant believed that it suggested that
further relevant evidence would be forthcoming, he could have brought a motion
or written to the Court seeking an adjournment. Further, it is unknown when
the Applicant made the Privacy Act complaint but certainly it was more
than one month ago. Accordingly, his adjournment request was not timely nor
was the response to the complaint unforeseen. Further, upon review of the
email, I was not convinced that it was sufficient to establish that future
relevant evidence concerning the reasonableness of the Minister’s decision to
issue the Requirements to Pay would follow and, therefore, that the Applicant
would be prejudiced by the hearing proceeding. On the other hand, the Court
and the Minister’s counsel were in attendance at the hearing and prepared to
proceed. For these reasons the adjournment request was denied.
Issue 1: Should this Court grant an injunction staying the
Minister’s collection actions in relation to the GST amounts assessed against
the Applicant until such time as his appeal of the Tax Court of Canada’s
decision to the Federal Court of Appeal has been disposed of?
[20]
As noted above, the Applicant has previously
sought an interim injunction in this matter. His Notice of Motion in that
regard and his Notice of Application in this application seek identical relief,
specifically:
1. An injunction requiring the Minister of National Revenue to
cease collection activity against the Applicant until the matters before the
Federal Court of Appeal is finalized.
2. An injunction requiring the Minister of National Revenue to
withdraw all third party demands (Requirements to Pay) and notify all parties
that have received the demands of the withdrawal.
[21]
Significantly, the Applicant filed one affidavit,
dated October 21, 2014, in support of the motion which is also relied upon in
support of this application for judicial review. A second affidavit, dated
March 3, 2014 provides a copy of the Minister’s decision of January 12, 2015
denying the Applicant’s request for a stay of collection actions, but does not
speak to the grounds supporting the application. This is significant because
Justice Gleason refused the interim injunction request contained in the motion
by her Order of November 12, 2014 and the Applicant has subsequently put
forward no new evidence in this application, other than the letter from the
Minister.
[22]
In fact, the only thing that has changed is that
on January 12, 2015, the Minister advised the Applicant that his request for a
discretionary stay of collection actions pending the outcome of his appeal
would not be granted. However, the Applicant has not challenged that decision.
[23]
Justice Gleason stated in her Order:
I am not convinced that the Respondent has
established the presence of such a flaw in the Applicant’s judicial review
application as it is not plain and obvious that a judicial review application
may not be brought in respect of decisions to issue Requirements to Pay. In Re
Canadian Aggregate Co., 2001 FCT 1074, 108 ACWS (3d) 987, my colleague,
Justice O’Keefe, indicated that such decisions may be subject to judicial
review. It is therefore not plain and obvious that the Applicant cannot bring
this judicial review application as, contrary to what the Respondent argues,
there may well have been reviewable decisions made by the Minister of National
Revenue in this matter. The Respondent’s cross-motion will therefore be
dismissed.
While this Court does possess jurisdiction
to issue an injunction in the context of a judicial review application, in
order to do so the Court must be satisfied that the party seeking injunctive
relief has met the tri-partite test from RJR-MacDonald Inc. v Canada
(Attorney General), [1994] 1 S.C.R. 311, 46 ACWS (3d) 40. This requires that
the applicant establish that there is a serious issue in the pending
application for judicial review, that the applicant would suffer irreparable
harm if the injunction is not granted and that the balance of convenience favours
granting the injunction. Here, the Applicant has not established any of the
foregoing three pre-requisites for the grant of injunctive relief.
The Applicant’s application for judicial
review does not raise a serious issue as it is clear that the Minister of
National Revenue is entitled under sub-section 315(2) of the Excise Tax Act,
R.S.C., 1985, c. E-15, to enforce GST assessments while appeals are pending as
was confirmed in Hoffman v Attorney General of Canada, 2009 FC 832, 180
ACWS (3d) 176 at paragraph 28 and Leroux v Canada Revenue Agency, 2014
BCSC 720, 242 ACWS (3d) 987 at paragraph 376. In his Notice of Application, the
Applicant offers no challenge to the Minister’s collection activities other
than stating that he has an appeal from the decision of the Tax Court pending
before the Federal Court of Appeal. As the Minister is authorized to pursue
collection activities irrespective of the appeal, the Applicant’s application
for judicial review does not raise a serious issue.
Nor has the Applicant established that he
would suffer irreparable harm if the motion for an injunction is refused. As
the Respondent rightly notes, an applicant for injunctive relief is required to
establish the presence of irreparable harm through clear, non-speculative evidence
that shows that if the injunction is not granted the applicant would suffer
such harm between the date of the injunction application and the date the
Federal Court decides the judicial review application on the merits (see e.g. Patry
v Attorney General of Canada, 2011 FC 1032, 207 ACWS (3d) 593 at paragraphs
52 and 53). The Applicant alleges that the service of the Requirements to Pay
has and will cost him clients, but there is no proof of this in his affidavit
beyond a bald assertion. This falls well short of the type of proof required to
establish irreparable harm. Moreover, as the Respondent also notes, if the
service of the Requirements damaged the Applicant’s reputation, that harm has
already been done and cannot be undone through the requested injunction.
Finally, in the circumstances, the balance
of convenience favours the Respondent as the Tax Court found that the Applicant
owed GST, failed to remit it, advanced unmeritorious positions and lacked
credibility.
The Applicant’s motion must therefore be
dismissed.
As success in respect of these matters was
divided, there is no order as to costs;
[24]
As no new relevant evidence has been filed in
support of the requested injunction, there is no basis on which to depart from
this prior finding, with which I agree and adopt.
Issue 2: Should this Court quash the Requirements to Pay
issued to third parties in respect of the GST amounts assessed against the
Applicant?
Applicant’s Position
[25]
In his written submissions the Applicant states
that GST amounts must be correctly applied to the correct taxpayer, and that
the intent of the tax legislation is not to bankrupt taxpayers or extract from
them anything more than what is fair and equitable. He disputes the amount
that he allegedly owes, arguing that it was arbitrarily derived and a grave
exaggeration of a fabricated unproven debt, and he claims that the demands made
by the CRA are damaging to him.
[26]
With respect to the Requirements to Pay that
were issued to his clients, the Applicant submits that the CRA did not have regard
to whether the deposits to the clients’ corporate accounts were revenues and or
expenses being deducted from the revenues, as was noted by the Tax Court of
Canada. The Applicant claims that it is not the intention of the legislation
with respect to trust funds to arbitrarily create amounts that are unrealistic
and then pursue collection unless there are reasonable and probable grounds
that the amounts will become real. Further, the alleged debt owed is a
corporate debt rather than a person debt. Based on this, he asserts that the
grounds assumed by the Minister for issuance of Requirements to Pay “are faulty and unreal”.
[27]
When appearing before me, the Applicant
emphasized his belief that the Assessments are wrong and that the Excise Tax
Act was never intended to allow collection actions in circumstances such as
these where the possibility of success on appeal is high and where an average
person wants to simply continue doing business while the matter is being
resolved without being forced into bankruptcy. He submitted that the cases
relied upon by the Minister are distinguishable on their facts. He further
submitted that the amount on the face of the Requirements to Pay is wrong as
the Tax Court decision reduced his indebtedness and, therefore, the issuance of
the demands was unreasonable.
Minister’s Position
[28]
The Minister submits that, to the extent that
the Applicant is challenging the Minister’s decision to issue the Requirements
to Pay, reasonableness is the applicable standard of review and the decision
was reasonable (Dingman v Canada (National Revenue), 2009 FC 395 at
paras 24-26; Coombs v Canada (National Revenue), 2012 FC 1499, at para
14 (“Coombs”); Dunsmuir v New Brunswick, 2008 SCC 9 at para 47).
[29]
The Minister takes the position that the Applicant’s
challenge to the Requirements to Pay is essentially a challenge to the validity
of the underlying GST assessment and that a judicial review application is not
the proper venue to address this. The Tax Court of Canada has exclusive
jurisdiction to consider appeals of the correctness of assessments made under
the Excise Tax Act (Canada (National Revenue) v JP Morgan Asset Management
(Canada) Inc, 2013 FCA 250 at paras 80-82 (“JP Morgan”); Johnson
v Canada (National Revenue), 2015 FCA 51 at paras 21-24 (“Johnson”);
Federal Courts Act, RCS 1985, c F-7, s 18.5 (“Federal Courts Act”);
Tax Court of Canada Act, RSC 1985, c T-2, s 12(1) (“Tax Court of
Canada Act”); Excise Tax Act, ss 301, 302 and 306) and the Applicant
has properly sought recourse in the Tax Court of Canada, and on appeal to the
Federal Court of Appeal, in respect of some of the GST reporting periods at
issue.
[30]
The Minister submits that the Applicant’s
written and oral submissions make it clear that his challenge to the
Requirements to Pay is, in reality, an argument that he has been assessed an
incorrect amount of GST owing. His argument essentially being that the
Requirements to Pay are invalid because the amounts assessed are incorrect. The
Minister asserts that this Court has no jurisdiction to consider that argument
and the Applicant’s challenge to the correctness of the GST assessments is a
collateral attack on Justice Miller’s Tax Court of Canada decision. As to the
amount on the face of the Requirements to Pay, $121,236.35 on the latter group,
this reflects the amount due and owing pursuant the Assessments. Subsequent to
the Tax Court’s decision, a reassessment was issued reducing the amount owed by
$45,219.64. However, the Requirements to Pay were issued prior to the
reassessment and there is no obligation on the Minster to amend the demands
upon reassessment or whenever a payment is received from a party to whom a
demand is made. The face value does not affect the validity of the
Requirements to Pay and the Minister can only collect what is actually owing.
[31]
Further, the Minister points out that the only
other ground on which the decision to issue the Requirements to Pay is
challenged by the Applicant is that they lead to irreversible harm or damage to
him, by denying him the chance of earning an income. However, even if it were
a valid basis to set aside the decision, which the Minister denies, no evidence
has been advanced to support this.
Analysis
[32]
Section 18.5 of the Federal Courts Act states
that if an act provides for an appeal of a decision to a court, that decision
is not subject to review except in accordance with that act.
[33]
The Tax Court of Canada has exclusive original
jurisdiction to hear and determine references and appeals on matters arising
under Part IX of the Excise Tax Act and the Income Tax Act (Tax
Court of Canada Act, s 12(1)) and s 306 of the Excise Tax Act states
that a person may appeal a Minister’s assessment or reassessment to the Tax
Court of Canada. In fact, ss 301, 302 and 306 of that Act have been held to constitute
a complete appeal procedure that allows taxpayers to raise in the Tax Court all
issues relating to the correctness of assessments (Johnson at para 23).
[34]
That said, the Federal Court does have
jurisdiction to deal with certain matters arising from the Income Tax Act
and the Excise Tax Act, such as when an applicant attacks the validity of
a certificate or other processes contemplated by the Federal Courts Rules
stated to be preconditions to certain sections of the Income Tax Act or the
Excise Tax Act (Siow v The Queen, 2010 TCC 594 at para 17). The
Federal Court also has jurisdiction to grant a discretionary stay or injunction
with respect to matters arising under the Income Tax Act and Excise
Tax Act (Leroux v Canada Revenue Agency, 2012 BCCA 63 at para 53; Canada
(Minister of National Revenue) v Swiftsure Taxi Co, 2005 FCA 136 at para 6).
This includes discretionary decisions of the CRA to issue Requirements to Pay
(Coombs at para 16). The Federal Court also has jurisdiction to deal
with challenges to collection measures taken by the Minister (Johnson at
paras 46-48; Walker v Canada, 2005 FCA 393).
[35]
However, because the Federal Court does not have
jurisdiction to hear challenges to tax assessments, as these are within the
jurisdiction of the Tax Court of Canada, if an application is, in reality, challenging
the correctness of the assessment under the guise of seeking judicial review,
judicial review will not be available (Coombs at para 15; Johnson
at para 23). Nor does the Federal Court have jurisdiction to award damages or
grant any other relief sought on the basis of an invalid reassessment of tax,
unless the reassessment has been overturned by the Tax Court, as doing so would
permit a collateral attack on the correctness of an assessment (Canada v
Roitman, 2006 FCA 266 at para 20). Therefore, the Minister is correct that
if the Applicant was not satisfied with the results of his objection, his
recourse lay in an appeal to the Tax Court of Canada (Newcombe v Canada,
2013 FC 955 at para 30) and then to the Federal Court of Appeal, which he did
for some of the tax years in issue.
[36]
In JP Morgan, the Federal Court of Appeal
outlined a list of situations where an appeal to the Tax Court is available,
adequate and effective in giving the taxpayer the relief sought, making
judicial review to the Federal Court unavailable, which includes the validity
of assessment. The Federal Court of Appeal further explained that judicial
review remedies are remedies of last resort, and so judicial reviews brought in
the face of adequate, effective recourse elsewhere or at another time cannot be
entertained (JP Morgan at paras 82, 84-85).
[37]
The question then becomes, what is the true
character of the application? Justice Rennie explored this question in Sifto
Canada Corp v Canada (National Revenue), 2013 FC 986 at paras 17 and 21. Acknowledging
that there is a very narrow opening for judicial review with respect to
decisions of the Minister of National Revenue, Justice Rennie wrote:
[17] The contention that each and every
action or decision of the Minister of National Revenue is entirely and
exclusively derivative of statute and can never be subject to review has scant
support in the jurisprudence. Indeed, the proposition is at variance with the
position taken by the Minister in other proceedings (see for example, Response
to Application for Leave to Appeal, Ronald Ereiser v Her Majesty the Queen,
Supreme Court of Canada Docket: 35296, at para 18) and with established
jurisprudence. There exists a very narrow opening for judicial review. The
question is whether, on these pleadings, and at this preliminary stage of the
proceedings, it can be said that the Prothonotary erred in concluding that
Sifto’s applications were not bereft of any hope of success.
…
[21] The role of the Court in these
circumstances, where jurisdiction is contingent on characterization of the
allegations is to determine the essential nature of the claim. The Court must
make a “realistic appreciation of the practical result sought by the claimant”:
Canada v Domtar Inc, 2009 FCA 218 and look beyond the words used, the
facts alleged and the remedy sought: Canada v Roitman, 2006 FCA 266 at
para 16. Roitman also teaches that the claim “is not to be blindly read
at its face meaning.” To paraphrase Justice Binnie in Canada (Attorney
General) v TeleZone Inc, 2010 SCC 62, [2010] 3 S.C.R. 585, at para 78, a court
should look beyond the pleadings and determine their “essential character”.
[38]
The Federal Court of Appeal, in affirming
Justice Rennie’s decision, stated in Canada (National Revenue) v Sifto
Canada Corp, 2014 FCA 140 at para 25:
[25] The Minister also takes issue with
the remedies sought by Sifto in the Improper Penalties application, arguing
that the Federal Court cannot grant the relief sought. I do not accept that
argument because it is based on a technical and microscopic reading of the
notice of application. The proper approach is to read the application
holistically with a view to understanding its essential character, rather than
fastening on matters of form (JP Morgan at paragraph 50). Thus, for
example, while it is true that the Federal Court cannot invalidate an
assessment (which is one of the remedies sought), the Federal Court may grant a
declaration based on administrative law principles that the Minister acted
unreasonably in failing to waive the penalties, or a declaration that the
penalties should not have been assessed in the face of the valid voluntary
disclosure. Similarly, the Federal Court may on the same basis grant another of
the remedies sought, which an order precluding the Minister from enforcing the
penalty assessment or collecting the resulting tax debt. And if the application
is not perfectly drafted at this stage, the Federal Court has ample scope for
permitting amendments if required to ensure that the actual dispute is properly
before the Court.
[39]
Here the Applicant is self-represented. Reading
his application and hearing his submissions in whole, I do not believe that it
was his intent to collaterally attack the findings of the Tax Court of Canada. However,
all of the issues that he raises in his submissions in support of his challenge
to the decision to issue the Requirements to Pay, and in seeking injunctive
relief, were all issues that were dealt with by the Tax Court of Canada and
that will be dealt with by the Federal Court of Appeal. For example, Justice
Miller found that it was indeed the Applicant personally who earned the revenue
from his accounting practice, rather than what Justice Miller described as “an elaborate structure of corporations and trusts”. For
GST purposes, Justice Miller found there was only one business, and that the
supplier was the Applicant, and not the registered corporations under Mason and
Associates. The amounts assessed as owing were also addressed in that
decision.
[40]
In my view, the essential nature of the
Applicant’s claim is that the Minister incorrectly assessed his GST liability. As
a result, the Requirements to Pay should not have been issued and, more
importantly, collection should not have been pursued while this matter remains
in dispute before the Federal Court of Appeal. Because the issues that the
Applicant identifies are all matters that concern the correctness of the
Minister’s GST assessment, which will be dealt with by the Federal Court of Appeal,
this Court has no jurisdiction, pursuant to s 18.5 of the Federal Courts
Rules, to address them.
[41]
As acknowledged by the Minister, this Court does
have jurisdiction to consider whether the Minister’s decision to issue the
Requirements to Pay was reasonable. However, the Assessments are deemed to be
valid and binding until varied or vacated on objection or appeal and, unlike
the Income Tax Act (ss 225.1(2) and (3)), there is no statutory stay on
collection activity under the Excise Tax Act while an objection or
appeal is outstanding (Excise Tax Act, s 315(2); Hoffman v Canada
(Attorney General), 2009 FC 832 at para 28, affirmed in 2010 FCA 310
(“Hoffman”); Canada (Minister of National Revenue) v Vu, 2004 FC
1783 at para 3 (“Vu”); Leroux v Canada Revenue Agency, 2014 BCSC
720 at para 376 (“Leroux”)).
[42]
Therefore, in my view, the Minister is entitled
to pursue collection activities, even while an appeal is pending at the Federal
Court of Appeal, as was noted by Justice Gleason when hearing the motion for interlocutory
injunction. Thus, the decision to issue the Requirements to Pay was reasonable
as collection actions taken in respect of a valid assessment are lawful (Coombs
at paras 15 and 19) and as there was no evidence to suggest that the decision
had otherwise been unreasonably made. Nor is there any legal basis to find
that this Court can grant a stay of the collection actions (Hoffman at
para 28; Vu at para 3; Leroux at para 376). Injunctions cannot be
issued where the Minister is acting within the powers granted by law (North
of Smokey Fishermen’s Assn v Canada (Attorney General), 2003 FCT 33
at paras 10-11; Pacific Salmon Industries Inc v the Queen, [1985] 1 FC
504 (FCTD) at para 10).
[43]
Finally, while the Minister may postpone
collection actions in respect of all or any part of an amount assessed that is
the subject of a dispute (Excise Tax Act, s 315(3)), the use of the word
“may” in the provision indicates that this is a discretionary decision. Here,
there is insufficient evidence to support an argument that the refusal was
unreasonable, nor has the Applicant challenged that decision.
[44]
Accordingly, the application for judicial review
is dismissed.
[45]
The Minister submitted a draft Bill of Costs at
the conclusion of the hearing seeking $1,941.85 in fees and disbursements. Given
that this is a relatively straight forward matter which the Minister had
previously responded to in the context of the interim injunction motion,
meaning that no new issues arose, I will award a lump sum costs to the Minister
in the amount of $1,000.00. The Applicant shall have 90 days to make payment.
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