Peter Howard Clifford Mitchell v. Minister of National Revenue, [1986] 1 CTC 2010, 85 DTC 761

Taylor, T.C.J.:—This matter was brought before the Court on October 24, 1985 in Montreal, Quebec. It was originally scheduled as a hearing on the merits of an appeal against an income tax assessment for the year 1982, but it quickly developed that counsel for the Minister took the pre-emptive position that the Court was without jurisdiction to hear the appeal. The taxpayer had been notified properly by the Minister in advance of the hearing that as a result of the provision of section 169 of the Income Tax Act, S.C. 1970-71-72, c. 63, as amended, the appeal per se could not be brought before the Court. It was agreed between the parties that the Court should hear, consider and decide the Minister's motion on that point — the jurisdictional question. Granting the Minister's motion would be tantamount to dismissing the appeal, and no further action by this Court would be required. Denying the Minister’s motion however, would leave open the prospect for hearing the merits of the appeal, and it was therefore agreed that this hearing should be adjourned after argument on the Minister's motion, and resumed only if the motion were denied.

The essential elements of the matter, as explained by counsel for the Minister were:

— the relevant assessment notice was dated April 29, 1983;

— the appropriate notice of objection was dated June 8, 1983;

— the Minister reassessed on November 5, 1983, without materially altering the main item in dispute;

— the disputed notice of appeal to the Tax Court of Canada was dated March 13, 1984.

— The Minister's reply to notice of appeal — which included notification to the appellant that the jurisdictional question would be raised, — was dated June 10, 1985.

Counsel for the Minister stated that there had not been a request for an extension of time as a result of the late filing of the notice of appeal (more than 90 days had elapsed between November 5, 1983, and March 13, 1984). By the date of June 10, 1985, more than one year and 90 days had elapsed, and accordingly the taxpayer could no longer make such an application. In responding to a question from the Court, counsel noted that there was no indication in the file that the taxpayer had been notified prior to June 10, 1985, by the Minister that the notice of appeal dated March 13, 1984 was invalid by virtue of section 169 of the Act.

Counsel for the taxpayer relied upon the case of Murray Bowen v. City of Montreal, [1979] S.C.R. 511, and Cité de Pont Viau v. Gauthier Mfg. Ltd., [1978] 2 S.C.R. 516, as support for the view that the error in late filing of the notice of appeal was committed by the solicitors for the taxpayer, and that the right of Mr. Mitchell to have his appeal heard should not be prejudiced thereby. Counsel also noted for the record that he had not been the solicitor who filed the notice of appeal, (that solicitor was no longer acting for the taxpayer), and therefore the comments regarding possible conflict of interest referenced in Tanaka v. M.N.R., [1985] 1 C.T.C. 2333; 85 D.T.C. 305 should not apply.

Counsel for the Minister summarized the jurisprudence by noting that although he agreed Bowen (supra), could provide relief for a taxpayer, the circumstances had to be such that such relief was still available. In the instant case this taxpayer was simply out of time, and Bowen (supra), could not serve to permit the Court to ignore the statutory time limits imposed. Simply put, the Court could not reinstate this taxpayer's right to appeal — such a right had now completely expired, and no technicality could serve to correct that situation.

As I see it, this Court does not have a right under any circumstances to reinstate the right of appeal for a taxpayer after that right has expired. Accordingly, in this situation, unless the notice of appeal dated March 13, 1984 can be declared by this Court to be a valid notice of appeal, this taxpayer's case is lost. That document can only be declared valid if the argument proposed by counsel for the taxpayer can be accepted — that Bowen (supra), provides the Court just such authority. In my view, one of the most exhaustive examinations of Bowen (supra), recently conducted was that of Harris v. M.N.R., [1985] 1 C.T.C. 2363; 85 D.T.C. 302, and I would point out that it dealt with section 167 of the Act not section 169 of the Act. It was therefore legally within the powers of the Court in Harris (supra), to grant rather than deny the extension requested.

I would quote from page 2365 (D.T.C. 303) of Harris (supra):

In the Pont Viau case counsel served appeal documents on the wrong person and the error was not discovered until the appeal period had expired. Proper service was a condition precedent to the instituting of the appeal. The appellant applied to the Quebec Court of Appeal pursuant to the provisions of Article 523 of the Code of Civil Procedure of Quebec for an order extending the time within which the service could be effected, which application was denied. Article 523 reads:

The Court of Appeal may, if the ends of justice so require, permit a party to amend his written proceedings, to implead a person whose presence is necessary or even, in exceptional circumstances, to adduce, in such manner as it directs, indispensable new evidence.

It has all the powers necessary for the exercise of its jurisdiction and may make any order necessary to safeguard the rights of the parties. It may even, notwithstanding the expiry of the delay allowed by article 494, but provided that more than six months have not elapsed since the judgment, grant special leave to appeal to a party who shows that in fact it was impossible for him to act sooner.

I would also echo the views expressed on page 2366 (D.T.C. 304) of Harris (supra):

. . . to grant an order in circumstances such as these this Court should be able to find, at the very least, that the error or delay was due solely to the fault of applicant's representative; that the applicant himself acted with all due diligence; and that there was nothing else the applicant could have done to act sooner.

Leaving aside the very lucid analysis of relative powers provided to this Court, as contrasted with other Courts, detailed in Harris (supra), I would suggest that the major impediment to this taxpayer is that there is no evidence or testimony before the Court to fulfil the conditions noted in Pont Viau (supra), enabling the Court to exercise whatever flexibility or discretion it might have. We do not know that . . the error or delay was due solely to the fault of the applicant’s representative . . .”; “. . . that the applicant himself acted with all due diligence"; “and that there was nothing else the appellant could have done to act sooner .. .”. No evidence or testimony was Called on behalf of the taxpayer, and he gave none himself.

The motion of the Minister is granted — this Court is without jurisdiction to hear the purported appeal.

The appeal is quashed.

Appeal quashed.