Date: 20100127
Dockets:
A-237-09
A-240-09
Citation:
2010 FCA 31
CORAM: BLAIS C.J.
LÉTOURNEAU J.A.
TRUDEL J.A.
BETWEEN:
A-237-09
LOCATION
ROBERT LTÉE
Appellant
and
HER
MAJESTY THE QUEEN
Respondent
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A-240-09
TRANSPORT
ROBERT (1973) LTÉE
Appellant
and
HER
MAJESTY THE QUEEN
Respondent
REASONS FOR JUDGMENT
LÉTOURNEAU J.A.
Issues
[1]
The appellants (hereafter
the appellant) in dockets A-237-09 and A-240-09 are appealing against two
decisions of Justice Hugessen (judge) of the Federal Court: Location Robert
Ltée v. Sa Majesté la Reine; Transport Robert (1973) Ltée v. Sa Majesté
la Reine, 2009 CF 516.
[2]
In his decisions, the
judge allowed the motion for summary judgment submitted by the respondent. He
accordingly dismissed the appellant’s action in each of the cases.
[3]
The appellant raises
the four following errors of law in the judge’s decision. He allegedly erred
when he
a) concluded that the
appellant’s action disclosed no genuine issue for trial;
b) stated that the
respondent had discharged her burden of proof on a motion for summary judgment;
c) denied the appellant
the right to present its case on the merits before the Federal Court; and
d) held that the Budget
Implementation Act, 2003, S.C. 2003, c. 15 (Act) eliminated the
appellant’s substantive right to claim a rebate for excise taxes it had paid.
Analysis of the judge’s decision and the parties’
submissions
[4]
The appellant’s
submission on appeal, as in the Federal Court, was based on its interpretation
of section 63 of the Act which amended subsection 68.1(1) of the Excise
Tax Act, R.S.C. 1985, c. E-15. I reproduce both sections, beginning
with the Excise Tax Act:
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68.1 (1)
Where tax under this Act has been paid in respect of any goods and a person
has, in accordance with regulations made by the Minister, exported the goods
from Canada, an amount equal to the amount of that tax shall, subject to this
Part, be paid to that person if that person applies therefore within two
years after the export of the goods.
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68.1 (1)
Lorsque la taxe prévue par la présente loi a été payée sur des marchandises
qu’une personne a exportées du Canada en conformité avec les règlements pris
par le ministre, un montant égal à cette taxe est, sous réserve des autres
dispositions de la présente partie, payé à la personne si elle en fait la
demande dans les deux ans suivant l’exportation des marchandises.
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63. (1)
Section 68.1 of the Act is amended
by adding the following after
subsection (2):
(3) For greater certainty, no amount is
payable to a person under subsection (1)
in
respect of tax paid on gasoline or diesel
fuel transported out of Canada in the fuel tank of the vehicle that is used for that
transportation.
(2) Subsection (1) applies in respect of
any application for a payment under
section 68.1 of the Act received by the Minister of National Revenue after
February 17, 2003.
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63. (1) L’article
68.1 de la même loi est
modifié par adjonction, après le
paragraphe (2), de ce qui suit :
(3) Il est entendu qu’aucun montant n’est
à payer à une personne aux termes du paragraphe (1) au titre de la taxe payée
sur l’essence ou le combustible diesel qui est transporté en dehors du Canada
dans le réservoir à combustible du véhicule qui sert à ce transport.
(2) Le paragraphe (1) s’applique à toute
demande de paiement, prévue à l’article 68.1
de la même loi, reçue par le ministre du Revenu national après le 17 février
2003.
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[5]
The appellant submits
that section 63, on the one hand, eliminates the right to a rebate after February 17, 2003, and, on the other hand, retroactively establishes a time
limit for submitting refund applications based on the right to a rebate which
existed before February 17, 2003. From this, the appellant concludes that
the provision imposed a time limit on its right to a rebate.
[6]
On the basis of this
interpretation, it deduces that section 63 is a limitation provision barring
the right to a rebate of the tax as of February 17, 2003.
[7]
That said, the
appellant argues that the time limit should be suspended because, in practice, it
was impossible for it to take action. This absolute impossibility of taking
action allegedly stemmed from the conduct of a representative of the Canada
Revenue Agency (Agency) who told the appellant not to submit additional rebate
applications for the years subsequent to 1993. Instead, the appellant was
supposed to wait for a final decision to be rendered in Penner, at which
time it would be contacted by a representative.
[8]
The judgment in Penner
International Inc. v. Canada, 2002 FCA 453 was rendered in November 2002.
It confirmed the right to a rebate of tax paid on gasoline or diesel fuel transported
out of Canada in the tank of the vehicle used for that
transportation.
[9]
The Federal Court judge
rejected the appellant’s interpretation of section 63. It concluded that
the section did not establish a limitation period or a deadline, but rather
completely eliminated the right to a rebate as of February 17, 2003. The
judge wrote the following at paragraphs 3 and 4 of his decision:
[translation]
[3] In
2003, Parliament enacted the Budget Implementation Act, 2003,
S.C. 2003, c. 15, and in this statute it completely eliminated the taxpayers’
right to claim excise taxes paid in the circumstances alleged by the plaintiffs
from the very date of the budget in February 2003.
[4] This
is not a limitation period or even a deadline. It is simply the elimination of
a right which taxpayers used to have.
[10]
The appellant’s
submission that the provision in question merely establishes a limitation
period is ingenious; however, it does not stand up to the analysis made by the
trial judge. For a right to be time barred and, accordingly, for there to be a
limitation period, there has to be a right subject to limitation. However, in
this case, the right was simply eliminated, as the judge rightly concluded.
Simply put, section 63 extinguishes the right to a tax rebate, as opposed
to placing a time limit on it. That which has no legal existence cannot be time
barred.
[11]
This conclusion is
sufficient to deal with both appeals. However, I would add the following about
the de facto impossibility of taking action, which is invoked by the
appellant as a ground for suspending the time limit.
[12]
It is true that de
facto impossibility of taking action is no longer limited to situations of
superior force. It may result from the fault of the debtor of the obligation
committed in a context of bad faith or abuse of rights or, in delictual
matters, from a psychological state of fear caused by the defendant’s fault:
see Oznaga v. Société d’exploitation des loteries et courses du Québec,
[1981] 2 S.C.R. 113; Gauthier v. Brome Lake (Town), [1998] 2 S.C.R. 3; Laurentian
Pilotage Authority v. Voyageur (The), 2005 FCA 221, [2006] 1 F.C.R. 37.
[13]
That said, [translation] “the concept of it being
‘absolutely impossible . . . in fact to act’, provided for in art. 2232 of the
Civil Code, should not be unduly extended as a basis for a suspension of
deadlines”, as the Court of Appeal of Québec noted in J.C. v. D.B., 2006
QCCA 1090, [2006] J.Q. No. 9223, referring to the warning made by Justice Lamer
in Oznaga, above.
[14]
Even if we assume that
an Agency representative told the appellant to wait for the Court’s decision in
Penner before making its rebate applications, it cannot be concluded
that the Agency committed a fault, absent an argument and evidence that the
Agency acted in bad faith to prevent or avoid the payment of a rebate.
[15]
In addition, nothing in
fact or in law prevented the appellant from submitting its rebate applications in
spite of the advice given by an Agency representative. At most, any decision on
these applications would have been suspended while the judgment in Penner was
pending. In so doing, the appellant would have protected its rights.
[16]
Finally, as already
mentioned, the judgment of our Court in Penner was rendered in
November 2002, on the 20th, to be more precise. However, the budget
amending section 68.1 of the Excise Tax Act was not tabled until February
2003. During that intervening period, the appellant had sufficient time to file
its applications. In such circumstances, it is simply impossible to conclude
that there was a de facto impossibility of taking action; similarly, we
cannot substitute a fault on the debtor’s part for the creditor’s lack of diligence,
as the appellant would have it. If the creditor’s lack of awareness of the
legal facts which are the basis of its right cannot be regarded as an absolute de
facto impossibility of acting (Oznaga, above, at page 126), it
is difficult to conceive how a creditor’s lack of awareness of the legal facts
which extinguish that right, in this case, the Act, might constitute such an
impossibility.
Conclusion
[17]
For these reasons, I
would dismiss both appeals with costs, the costs for the hearing being limited
to one set. I would place a copy of these reasons in file A-240-09 in
support of the judgment to be rendered.
“Gilles Létourneau”
“I agree
Pierre
Blais J.A.”
“I agree
Johanne Trudel J.A.”
Certified true
translation
Michael Palles
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