Milan Hrovat, M & H Doors LTD v. Minister of National Revenue, [1983] CTC 2662, 83 DTC 590

Taylor, TCJ:—These are applications for an extension of time within which to file notices of objection against income tax assessments for the years 1976 to 1980 inclusive in the case of Milan Hrovat, and for the years 1978 to 1980 in the case of M & H Doors Ltd. The matter was heard on common evidence and the essence of the problem was noted in the application of Mr Hrovat as follows:

The date of mailing of each Notice of Reassessment was September 17, 1982, thereby making it necessary to file the Notices of Objection by December 16, 1982, in accordance with Section 165(1) of the Income Tax Act.

While these Notices of Objection were prepared by us and signed by the taxpayer in a timely manner on December 6, 1982, they were inadvertently mailed out on January 27, 1983, thereby becoming late filed.

For the Minister, the perception was:

The Respondent received purported Notices of Objection bearing a postal meter frank indicating a date of mailing of 27 January, 1983, being 42 days following 16 December, 1982.

The within application is dated 3 May, 1983, and, as indicated by the stamp of the Registrar of the Tax Review Board, was received by this honourable Board on 9 May, 1983. 3 May, 1983 was 138 days following the time prescribed by Section 165 of the Income Tax Act, RSC 1952, chapter 148, as amended, for objecting to the reassessments.

The respondent submits that this application was not brought as soon as circumstances permitted it to be brought, and therefore this honourable Board has no jurisdiction to grant the Order requested pursuant to paragraph 167(5)(c)(ii) of the Act.

Sections 165 and 167 of the Income Tax Act, SC 1970-71-72, c 63, as amended, have been reviewed many times in the jurisprudence and I would refe to a recent decision in the application of Carson RA Thistle, [1983] CTC 2656. In the instant matter, the applicant, Milan Hrovat, did not appear — he apparently could not, due to a medical problem. However, both of the partners of the accounting firm Folkard & Co, a Mr Rupert N Folkard, CA, and Mr Sam Ramessar, CA, did give testimony. They presented office time reports which did indicate that Mr Hrovat had indeed attended at their office for the express purpose of reviewing and signing the notices of objection on the dates of December 2 and December 6, 1982. They gave no explanation for the delay in mailing until January 27, 1983, other than an error in office routine. They accepted the fact that the mailing of the respective notices was their responsibility as of December 6, 1982, but they both denied any knowledge of the fact that they had been filed late until that point arose out of Mr Folkard’s efforts to prepare requested information for the applicants’ lawyer from the office file, on or about April 27, 1983. The matter for determination before this Court is the result.

As I see it, there are two issues to be addressed. First, did the taxpayer himself fulfil all his own responsibilities under subsection 167(1) and subparagraph 167(5)(c)(i) of the Act? Second, does the involvement of the accountants have any bearing on the matter?

On the first point, it is my view that when Mr Hrovat signed the appropriate notices of objection on December 6, 1982, he believed that his responsibility was fulfilled and that his agents would mail the forms. I have no reason to hold that it remained the responsibility of the applicant to ensure the filing was done. The Minister’s assertion must be directed, therefore, toward the second issue — the involvement of the agents, Folkard & Co. The only evidence before the Court supports their contention that these applications were filed shortly after April 27, 1983, when the fact that the notices of objection had been filed late did come to the attention of one of the partners.

As I see this matter, it is distinguishable from the case of Antonio Arnone v MNR, 79 DTC 22 in that there is no indication therein that Mr Arnone had in fact signed the prepared form within the original 90-day period. With regard to any reliance by the Minister on James Wayne Elliott v MNR, [1978] CTC 2919; 78 DTC 1643, I would refer to two subsequent judgments of the Supreme Court of Canada:

Cité de Pont Viau v Gautheir Mfg Ltd [1978] 2 SCR 516;

Murray Bowen v City of Montreal [1979] 1 SCR 511.

It is possible that these two Supreme Court cases might be restricted in their application to situations in which only solicitors, as contrasted with accountants or agents are involved, but no such argument was made to me in the instant case.

The applications are allowed.

Applications allowed.