Syal v. Canada (Attorney General), [1999] 3 CTC 666, 99 DTC 5451

Gibson J.:

On the 18 of June, 1999, at Edmonton, Alberta, I heard an application for judicial review described in the applicant’s application, prepared by the applicant himself, as being

...in respect of a request for the cancellation or waiving of penalties and interest relating to 1996 tax assessment under the “Fairness Legislation”, subsection 220(3.1) of the Income Tax Act^. [1]

The decision under review took the form of a letter dated the 26 of October, 1998 which was apparently received by the applicant on the 30 of October, 1998.

At the close of the hearing, I indicated that I was going to dismiss the application for judicial review. I gave brief oral reasons. What follows is a slightly edited version of those brief oral reasons.

“Mr. Syal, I am going to briefly review what is before me, and I am sure that most of this is very familiar to you.

What is before the Court today on your application is a judicial review of a decision made by or on behalf of the Minister of National Revenue.

On judicial review, the question before the Court is not whether the Court would have reached the same decision on the same facts, were it the responsibility of the Court to make the decision, but rather, to put it in layman’s language, whether the decision made on behalf of the Minister was reasonably open. I might not agree with it, but that is not the test. The test is whether the decision was reasonably open to the Minister.

The decision under review is a discretionary decision. Subsection 220(3.1) of the Income Tax Act provides that the Minister “may”. It does not provide that the Minister “shall”. So the Minister has a discretion.

Guidelines were issued and are before me regarding the exercise of the discretion, and that is Information Circular 92-2 [2] with which I am sure you are familiar.

In the introduction of those guidelines, the first paragraph provides in part:

... The legislation gives discretion to cancel or waive all or a portion of any interest or penalties payable....

Paragraph 3 on the same page also under the heading “Introduction” provides very succinctly:

These are only guidelines....

Paragraph 7 to which you referred me during argument, provides in part:

It may

and I emphasize ‘may’,

be appropriate in circumstances where there is an inability to pay...

Paragraph 3 carries on to say what it might be appropriate to do in such circumstances. It does not say where there is an inability to pay, the Minister and his or her officials “shall” or “must”. So even if there is an inability to pay, the guidelines reiterate the discretion.

Counsel for the respondent has referred me to the Barron^ [3] case, which is a decision of the Federal Court of Appeal, and as such, it is a decision that is binding on me. The Court of Appeal had before it on that occasion a decision of a judge, such as myself, where that judge had allowed a judicial review application such as yours.

The Court of Appeal concluded that my brother or sister judge was wrong in allowing the appeal. It said, and I am quoting from page 5122, and I am going to quote at some length here because the circumstances of that case, while the provision of law concerned was different, are very similar because it was a circumstance where the Minister was given a discretion as here; Mr. Justice Pratte speaking for the Court wrote:

it may be useful to recall that subsection 152.(4.2) of the Income Tax Act confers a discretion on the Minister...

as, indeed, subsection 220(3.1) does here; continuing the quote:

...and that, when an application for judicial review is directed against a decision made in the exercise of a discretion, the reviewing court is not called upon to exercise the discretion conferred on the person who made the decision.

That is essentially what I have earlier said. It matters not whether I think the decision was right or wrong, and it is not my responsibility to exercise the discretion. Continuing on with the quote:

The court may intervene and set aside the discretionary decision under review only if that decision was made in bad faith, if its author clearly ignored some relevant facts or took into consideration irrelevant facts or if the decision is contrary to law.

The judge’s findings that the Minister failed to inform the respondents of the factors that he would take into consideration in exercising his discretion and that he also failed to give them an opportunity to make representations in support of their requests are both clearly contrary to the evidence. The record shows that the respondents were invited by an officer of the Department of National Revenue to take advantage of subsection 152.(4.2) and were sent an Information Circular explaining that provision and indicating how the Minister would exercise his discretion. The record also shows that the respondents were given a full opportunity to make representations in support of their requests; true, they were not given the opportunity to make oral representations, but the law is clear that, save in exceptional cases, fairness does not require an oral hearing.

As to the judge’s opinion that the respondents were denied the “right to participate in the proceedings and [...] to confront the case against them,” it results from a complete misunderstanding of the nature of the proceedings (if they can be called proceedings) before the Minister. Those proceedings are not adversarial and if the respondents were not given the opportunity to confront the case against them, it is because there was no such case.

Mr. Justice Pratte specifically deals with the right to make oral representations, and, as counsel for the respondent has indicated to the Court, save in exceptional circumstances, it is not a breach of fairness to deny a right to make oral representations where the decisionmarker has full discretion.

Counsel for the respondent has also referred us to a decision, [4] in this case of the Supreme Court of Canada, that suggests what exceptional circumstances are. Counsel has argued that against that test for what are exceptional circumstances, exceptional circumstances do not exist here. I am satisfied counsel is correct in this.

So I cannot agree with you that there was here a breach of a duty of fairness, nor can I conclude on the basis of all the material before me that the decision of the Minister was made in bad faith.

I cannot conclude that the decision was made in circumstances where relevant facts were ignored. I cannot conclude that irrelevant facts were taken into consideration, and, given the nature of the discretion on behalf of the Minister or that is vested in the Minister, I certainly cannot conclude that the decision is contrary to law.

In the result, and reflecting the fact that I am bound by the decision of the Federal Court of Appeal in Barron, I have no alternative but to dismiss your application for judicial review.”

Following the foregoing oral reasons, I consulted counsel on the issue of costs. Counsel for the respondent, requested costs. The applicant, on his own behalf, indicated that if he had been able to afford costs, he would not have been self-represented but would have retained counsel. I exercised my discretion to make no order as to costs.

An order reflecting my decision issued on the day of the hearing.

Application dismissed.

[1999] 3 C.T.C.

Tax Court Decisions