Docket:
A-325-13
Citation: 2014 FCA
78
CORAM:
BLAIS
C.J.
GAUTHIER
J.A.
MAINVILLE
J.A.
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BETWEEN:
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HER MAJESTY THE QUEEN
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Appellant
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and
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LOUISBOURG SBC, LIMITED PARTNERSHIP
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Respondent
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REASONS FOR JUDGMENT
BLAIS C.J.
[1]
The appellant is asking the Court to set aside
the decision of Deputy Judge Masse to grant the respondent an extension of time
to file a notice of objection.
[2]
At issue are two notices of assessment: the
first, for the December 2009 period, is dated May 3, 2010, and was
posted by the respondent on the same day; the second, dated and posted by the
respondent on October 1, 2010, concerns the April 2010 period.
[3]
No notice of opposition was filed within the
time prescribed under the Excise Tax Act, R.S.C. 1985, c. E-15 (ETA).
[4]
Deputy Judge Masse first concluded that the
presumption of receipt provided for under subsection 334(1) of the ETA
applied to the disputed notices; however, on the basis of subsection 304(5)
of the ETA, he determined that since the five conditions set out in this
provision had been satisfied, he could grant the requested extension.
[5]
In my opinion, the judge made a palpable and
overriding error in arriving at this conclusion. Consequently, his decision
will be set aside, and the extensions will be cancelled.
[6]
After concluding that the presumption of receipt
under subsection 334(1) of the ETA applied to the two notices that had
been sent, the judge examined the conditions for granting an application for an
extension of time and concluded, of his own initiative, in his analysis of the
impossibility to act that he had to disregard the presumption. Indeed, he
concluded that the presumption should not be considered because it was a [translation] “legal fiction” and that
the impossibility to act had to be assessed irrespective of any fiction.
[7]
The judge finally concluded, relying on the
testimony of an employee of the respondent personally responsible for tax
matters, that, since this employee had not personally received the notices in
question, it had been impossible for the respondent to act.
[8]
It seems clear to me that in concluding that it
was mandatory for the notices of assessment to be brought to the attention of a
specific representative of the respondent or to be received by such a
representative in order to enforceable against the respondent, the judge
deliberately added a new requirement to the ETA.
[9]
I agree with the appellant’s submission that the
respondent’s argument completely disregards the meaning that should be given to
the presumption under subsection 334(1) of the ETA.
[10]
Imagine for a moment if this new requirement,
that is, to serve a specific person with the 40 million pieces of mail per
year referred to in the decision of the deputy judge, was imposed on the
appellant. Clearly, such an addition to the appellant’s statutory duty cannot
be accepted.
[11]
Referring to Justice Stone in Bowen, Justice Isaac
of this Court wrote as follows in Canada v. Schafer, 2000 CANLII 16118 (FCA):
[I]t
would be extremely difficult to administer a scheme in which a notice is sent
by ordinary first class mail that would require the Minister to contact every
person who has been sent a notice of assessment to ensure that they have, in
fact, received it.
[12]
This is all the more true given that the judge
recognized that the notices might have been received by the law firm
representing the respondent or by another employee of the respondent.
[13]
Moreover, the “Cité de Pont Viau” case referred
to by the trial judge does not apply in the present circumstances.
[14]
The respondent could clearly attempt to
establish that it had been impossible to act, but it also had to demonstrate
that the error was not the result of its own negligence. Consequently, the
manner in which the trial judge applied the facts of the case to the relevant
provisions of the ETA was a palpable and overriding error. The conclusions he
reached are not justified by the state of the law.
[15]
The case law clearly holds that, in order to
satisfy the conditions of subsection 304(5) of the ETA, the respondent had
to meet each of the criteria listed there, which it clearly failed to do.
[16]
The appeal will therefore be allowed, and the
application for an extension for the two notices will be dismissed, with costs.
“Pierre Blais”
“I agree.
Johanne Gauthier, J.A.”
“I agree.
Robert M. Mainville, J.A.”
Certified true translation
François Brunet, Revisor
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