Date:
20090402
Docket:
A-419-08
Citation:
2009 FCA 107
CORAM: BLAIS
J.A.
EVANS
J.A.
RYER
J.A.
BETWEEN:
UNIVERSAL
AIDE SOCIETY
Applicant
and
MINISTER OF
NATIONAL REVENUE
Respondent
REASONS FOR JUDGMENT OF THE
COURT
(Delivered
from the Bench at Vancouver, British Columbia, on April 2,
2009)
RYER J.A.
[1]
The
Universal Aide Society (the “applicant”) has brought this application pursuant
to paragraph 168(2)(b) of the Income Tax Act (the “ITA”), R.S.C. 1985,
c. 1 (5th Supp.) for an order extending the 30 day period that must expire
before the Minister of National Revenue (the “Minister”) is permitted to
publish a notice (the “Notice of Intent to Revoke”) of his intention to revoke
the registration of the applicant as a registered charity, within the meaning
of subsection 248(1) of the ITA (“registered charity”). The applicant requests
that the 30 day period be extended until its rights of objection and appeal in
relation to the Notice of Intent to Revoke have been exhausted.
[2]
The Notice
of Application also requests a declaration that legal and accounting costs that
the applicant may incur in responding to the Notice of Intent to Revoke may be
treated as expenses incurred in pursuit of a charitable activity.
[3]
In an
amendment to the Notice of Application, the applicant seeks a declaration that
the Notice of Intent to Revoke was not properly served on the applicant and is
of no force and effect.
Background
[4]
The
applicant was incorporated on March 10, 1993 under the Society Act, R.S.B.C.,
1996 c. 433, and was registered as a registered charity effective July 1, 1995.
[5]
As a
result of an audit of the applicant for the period from January 1, 2003 to
December 31, 2005, the Minister identified five areas of potential
non-compliance by the applicant with certain provisions of the ITA. These
concerns were communicated to the applicant in a letter (the “Administrative
Fairness Letter”) dated May 6, 2008, which was sent to Ms. Susan Jill Sampson,
the president and a director of the applicant, at her address in Qualicum
Beach, British Columbia. On July 7, 2008, the applicant advised the Minister,
that it did not wish to respond to the Administrative Fairness Letter.
[6]
The 2003
information return filed by the applicant with the Minister specified that the
applicant’s address was a post office box in Gabriola, British Columbia. However, the applicant’s 2004 and 2005
information returns specified that its address was 1364 Sea Lovers Lane in
Gabriola.
[7]
The Notice
of Intent to Revoke, which was dated July 18, 2008, was sent by registered mail
by the Minister to the applicant at the address of Ms. Sampson in Qualicum Beach. The applicant acknowledges
that the Notice of Intent to Revoke was received by Ms. Sampson on August 4,
2008.
[8]
On August
18, 2008, the applicant brought this application. On November 3, 2008, the
applicant filed a notice of objection (the “Notice of Objection”) to the Notice
of Intent to Revoke.
Declaration that the Notice of Intent to
Revoke is a nullity
[9]
The
applicant requests this Court to declare that the Notice of Intent to Revoke is
of no force and effect because it was allegedly sent to the wrong address. The
applicant does not dispute that it received the Notice of Intent to Revoke.
Indeed, the applicant has brought this application and has filed the Notice of
Objection as a result of its having received the Notice of Intent to Revoke.
However, the applicant contends that the Notice of Intent to Revoke is a
nullity because it was sent to the applicant at the address of Ms. Sampson, in Qualicum Beach, and not to the street address in Gabriola
that was specified in its 2004 and 2005 information returns. In support of that
contention, the applicant refers to the decision of this Court in Canada v.
236130 British Columbia Ltd., 2006 FCA 352.
[10]
In our
view, that case is distinguishable from the present case. In that case, notices
of reassessment were twice sent by ordinary mail to an incorrect address. The
reassessments that were sent in the first mailing were returned to the
Minister. The reassessments sent in the second mailing were ultimately received
by the taxpayer, but not within the time period prescribed in the ITA. However,
at no time did the taxpayer acknowledge receipt of the reassessments or
otherwise respond to them. The issue in the case was whether the Minister had proved
that the reassessments had been mailed to the taxpayer within the statutory
period. The taxpayer denied receiving them and the evidence demonstrated that they
had been mailed twice to an incorrect address.
[11]
In the
instant circumstances, the applicant has not only received the Notice of Intent
to Revoke but has responded to it twice: by this application and by the Notice
of Objection. Having acknowledged receipt of the Notice of Intent to Revoke,
the applicant cannot now deny the validity of such receipt, especially since
the applicant has not demonstrated that it has suffered any harm as a result of
the Notice of Intent to Revoke having been sent to Ms. Sampson’s address. The
record shows that the Minister did not publish the Notice of Intent to Revoke
in the Canada Gazette at the end of the 30 day period after July 18,
2008. Indeed, to this date, the Minister has refrained from publishing it.
[12]
Accordingly,
we are of the view that the Notice of Intent to Revoke was not invalid on the
ground that it was mailed to an incorrect address. Whether a different
conclusion would have been reached if the Notice of Intent to Revoke had been
returned to the Minister and its receipt denied by the applicant is a question
that need not be considered in this application.
Paragraph 168(2)(b) order
[13]
The
parties proceeded on the basis that the application to extend the 30 day period
referred to in paragraph 168(2)(b) of the ITA must be considered in light of
the tripartite test in RJR-MacDonald Inc. v. Canada (Attorney
General), [1994] 1 S.C.R. 311, citing as authority the jurisprudence of
this Court in International Charity Association Network v. Canada (Minister
of National Revenue), 2008 FCA 62, Choson Kallah Fund of Toronto v. The
Minister of National Revenue, 2008 FCA 311, and Millennium Charitable
Foundation v. Minister of National Revenue, 2008 FCA 414.
[14]
The
elements of the tripartite test, which all must be met before the application
can succeed, are:
a) there is a serious issue to be tried;
b) the
applicant will suffer irreparable harm if the requested order is not granted;
and
c) the
balance of convenience favours granting the order.
[15]
We are
satisfied that the relatively low threshold with respect to the first element
of the test has been met. Indeed, the Crown has conceded this issue.
[16]
The second
element of the test was described by Sopinka and Cory JJ. in RJR-MacDonald,
at page 341, as follows:
At this stage
the only issue to be decided is whether a refusal to grant relief could so
adversely affect the applicants’ own interests that the harm could not be
remedied if the eventual decision on the merits does not accord with the result
of the interlocutory application.
“Irreparable”
refers to the nature of the harm suffered rather than its magnitude. It is harm
which either cannot be quantified in monetary terms or which cannot be cured,
usually because one party cannot collect damages from the other.
[17]
We are not
persuaded that the applicant has met this element of the test. The applicant
has failed to provide any evidence to demonstrate that it will suffer
irreparable harm if the revocation of its status as a registered charity is
allowed to proceed. While the applicant’s memorandum of fact and law correctly
asserts that reputational harm is an example of irreparable harm, the applicant
has not provided any evidence of any actual harm, reputational or otherwise,
that it will suffer if the requested order is not granted. As stated by this
Court in Haché v. Canada, 2006 FCA 424, at paragraph 11:
The moving
parties must demonstrate, on a balance of probabilities, that the harm that
they would suffer is irreparable: Halford v. Seed Hawk Inc., 2006 FCA 167 at
paragraph 12. Mere assertions do not suffice. Irreparable harm cannot be
inferred. It must be established by clear and compelling evidence: A.
Lassonde Inc. v. Island Oasis Canada Inc., [2001] 2 F.C. 568 at paragraph
20.
[18]
The applicant
further asserts that the financial effects of a revocation of its status as a registered
charity would be dramatic. In our view, this assertion is similarly unsupported
by any evidence.
[19]
Because
the applicant has failed to establish the irreparable harm element of the RJR-MacDonald
test, it is unnecessary for us to consider the “balance of convenience”
element of that test.
Declaration with respect to legal and
accounting costs
[20]
The
applicant requests a declaration with respect to the treatment of certain costs
and expenses that it may incur in responding to the Notice of Intent to Revoke.
In effect, the applicant is asking this Court to provide the equivalent of an
advance income tax ruling of the type that can be requested from the Canada
Revenue Agency.
[21]
If the
applicant were to incur any such costs, the applicant would be at liberty to
characterize them as it deems appropriate in filing its income tax returns for
the applicable period or periods in respect of which such costs may be
relevant. If the Minister were to disagree with the applicant’s
characterization of such costs, it would appear to be open to the applicant to
object to any assessment or reassessment that the Minister may raise and to
have recourse to the Tax Court of Canada in the event that the Minister should
confirm any such assessment or reassessment.
[22]
We have
not been persuaded that the Court has jurisdiction to make a declaration of the
kind that the applicant seeks. This conclusion is consistent with the dicta
of this Court in Harris v. Canada (C.A.), [2000] 4 F.C. 37, where Sexton
J.A., at paragraph [30], stated:
I agree with
the Attorney General’s submission that one cannot bring in isolation an action
for a declaration on a mere interpretation of the Act…
[23]
Counsel
for the applicant argued that the basis for this Court’s jurisdiction to
consider this portion of the application arises out of his assertion that there
is a reasonable apprehension that the Minister will be biased when he considers,
in the course of the normal assessment process, the appropriateness of the
treatment of the costs and expenses in question that the applicant may adopt in
its future income tax returns. This matter was not raised by the applicant in
its Notice of Application or its memorandum of fact and law. Accordingly, it is
a point that this Court will not entertain.
[24]
Finally, the
absence of jurisprudential guidance with respect to the treatment of the costs
and expenses that may be incurred in responding to the Notice of Intent to
Revoke is not a basis for this Court to exercise a jurisdiction that it does
not have.
Disposition
[25]
For the
foregoing reasons, the application will be dismissed, with costs.
"C.
Michael Ryer"
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