Milton Wallace v. Her Majesty the Queen, [1991] 2 CTC 2341, 91 DTC 1134

Rip, T.CJ. [Orally]:—On April 30, 1991 the appellant, Milton Wallace, filed a notice of appeal to this Court from assessments, notice of which is dated May 22,1990, issued pursuant to the Income Tax Act, R.S.C. 1952, c. 148 (am. S.C. 1970-71-72, c. 63) (the 'Act"), Income Tax Act, Ontario ("Ontario Act") the Unemployment Insurance Act and the Canada Pension Plan. [1] The respondent has made a motion to the Court for an Order quashing the notice of appeal of Milton Wallace for lack of jurisdiction by this Court and, in the alternative, for an Order extending the time within which the reply to the notice of appeal may be filed.

The respondent made the motion on the basis that the appellant is not appealing an assessment of tax, interest or penalties pursuant to section 169 of the Act and accordingly this Court lacks the jurisdiction to hear the appeal under the Act.

The notice of assessment issue reads as follows:

NOTICE OF ASSESSMENT IN RESPECT OF: -AVIS DE COTISATION DE:

ACCOUNT NO.-TBX 941555

The liability under Subsection 227.1(1) of the Income Tax Act and 36n of the Income Tax Act— Ontario, and Section 22.1 of the Canada Pension Plan and Subsection 54.1 of the Unemployment Insurance Act in the amount of $56,645.06 being the amount of unpaid deductions, interest and penalties payable by Third Dimension Manufacturing Limited in respect of Notices of Assessment dated October 28, 1987 and December 11, 1987 issued against Third Dimension Manufacturing Limited.

PIERRE GRAVELLE

REGISTERED DEPUTY MINISTER, DEPARTMENT OF NATIONAL REVENUE, TAXATION COURRIER RECOMMANDÉ

SOUS-MINISTRE, MINISTÈRE DU REVENU NATIONAL, IMPÔT

Filed with the notice of motion was the affidavit of Mr. Kenneth Gratton, an officer of the Department of National Revenue. Mr. Gratton's Affidavit reads as follows:

I, KENNETH GRATTON, of the City of Etobicoke, in the Province of Ontario, officer of the Department of National Revenue, MAKE OATH AND SAY :

1. I am an officer in the Toronto Designated Appeals office of the Department of National Revenue (the "Department") and, as such, have knowledge of the practice of the Department.

2. I have examined the records relating to the appeal of Milton Wallace and, as such, have knowledge of the matters hereinafter deposed.

3. By Notice of Assessment dated May 22, 1990, the Appellant was assessed pursuant to subsection 227.1(1) of the Income Tax Act, R.S.C. 1952, c. 148, as amended (the “Act’’), section 36(a) of the Income Tax Act—Ontario, section 22.1 of the Canada Pension Plan and subsection 54.1 of the Unemployment Insurance Act for unremitted source deductions and related interest and penalties aggregating $56,645.06 as a director of Third Dimension Manufacturing Limited. A copy of the said Notice of Assessment is attached hereto as Schedule "A" to this my Affidavit.

4. A careful examination of the records of the Department shows the following amounts as outstanding as at May 22, 1990, which resulted in the assessment of the appellant:

Provincial Tax	$22,577.83
Canada Pension Plan	6,028.91
Unemployment Insurance	10,288.68
Penalty	4,099.47
Interest	13,650.17
	$56,645.06

5. A careful examination of the records of the Department shows that no amount of income tax, interest or penalties assessed pursuant to the Act was assessed in the Notice of Assessment described in paragraph 3, above.

6. I make this Affidavit for the purpose of a Motion to quash the appellant's purported appeal herein and for no other or improper purpose.

SWORN BEFORE ME in	)
the City of Toronto,	)
in the Province of	)	"Kenneth Gratton"
Ontario, this 9th day	)
of July, 1991.	)
"William Joseph Barnard"

Mr. Wallace has appealed what he ostensibly thought were assessments under the Act, Ontario Act, Canada Pension Plan ana the Unemployment Insurance Act. This Court does not have jurisdiction with respect to appeals from assessments under the Ontario Act and only obtained jurisdiction to hear appeals under the Unemployment Insurance Act and Canada Pension Plan which were instituted after December 31, 1990: SOR/90—689, SOR/90—690, October 1, 1990.

Since this Court has no jurisdiction to consider an appeal from this Ontario Act any purported appeal under the statute would be quashed if an application for such an order was before me.

The procedures to appeal assessments under the Canada Pension Plan and the Unemployment Insurance Act differ from those under the Act. I am unaware as to the stage of the appeal process respecting the assessments against Mr. Wallace under the Canada Pension Plan and the Unemployment Insurance Act. If any objections have been filed to assessments issued under those two statutes it may well be that the respondent has not confirmed any such assessments and an appeal under either of those statutes may be premature. However there is no evidence this is in fact so.

Since there is no tax being assessed under the Act, the motion of the respondent will be granted quashing the notice of appeal of Mr. Wallace only from the assessment of tax under the Act. The appeals from assessments under the Unemployment Insurance Act and Canada Pension Plan are not affected at this time since the application before me is only with respect to the Act.

Section 147 of the rules of the Court for General Procedure appeals grant the Court “full discretionary power over payment of costs of all parties involved in any proceeding, the amount and allocation of those costs and determining the persons by whom they are to be paid".

The respondent's motion was necessary due to an error on the part of the respondent in making an assessment and escribing the purported assessment to the taxpayer. The only reason the appellant appealed the assessment issued under the Act, was because the respondent, in the purported notice of assessment, informed him the assessment was a liability under the Act and other statutes. The appellant has been put to inconvenience and, perhaps, to costs as a result of this application. No blame can be attached to the appellant for this motion. For these reasons costs, if any were incurred by the appellant, will be awarded to the appellant on a solicitor and client basis. [2]

I do not think I should leave this motion without referring the parties, in particular Mr. Wallace, to the recent decision of Joseph Leung v. M.N.R. [1991] 2 C.T.C. 2268; 91 D.T.C. 1020;, in which I held that an assessment, the form of notice of which was substantially identical to the notice of assessment set to Mr. Wallace, is not a proper assessment and should be vacated. The respondent's motion has served to illustrate the difficulty and confusion a taxpayer may experience on receipt of a notice of assessment for a single sum of money which, the respondent informs the taxpayer, is a liability under several statutes. When Mr. Wallace filed his appeals it was through no fault of his that he did not know what he was being assessed. As I indicated in Leung, in communicating with taxpayers the respondent has an obligation to ensure that such communication is unambiguous and capable of being understood by the average taxpayer.

Minister's motion granted.