Teskey T.C.J. (orally):
1 HIS HONOUR: The Appellant in his Notice of Appeal wherein he appealed the assessment of income tax for the years 1989, 1990, 1991, 1992 and 1993 elected the informal procedure. The only issue that the Appellant raised at the hearing was whether the Notices of Assessment were effective or not. He made no attempt to challenge the validity of the assessments for the years in question. I can only assume that he had no valid argument against the assessments.
2 The Minister alleged that the Appellant failed to file income tax returns for the years 1989, 1990, 1991, 1992 and 1993 taxation years as and when required and in fact were not filed until September of 1994. These returns are exhibits and they prove that Statement of Fact. The assessments that were issued accepted the taxable income as filed by the Appellant.
3 The Appellant received Notices of Assessment in time to file the objection within the 90-day period as prescribed.
4 MR. SORENSON: Your Honour, may I comment?
5 HIS HONOUR: No. The assessments were confirmed and he launched his appeal to this Court within the time limit. Neither in the objection or in this Court did he attempt to dispute any of the assessments or the validity of the assessments but chose to make a very narrow legal argument because the Notices of Assessment were addressed to the Trustee of the Estate of Gary P. Sorenson. The Gary P. Sorenson mentioned in the assessments is the Appellant. There is no doubt and it is a fact that the Appellant made an assignment into bankruptcy or assigned into bankruptcy on the 31st day of December, 1987 and there is no evidence before me that he is out of that bankruptcy. There is evidence that the Trustee had himself removed as Trustee, which is the Notice of Taxation of Trustees account and discharge of Trustee Exhibit A-4. No attempt today was made to show me or to demonstrate to me that the Appellant finds himself prejudiced or unable to challenge the assessments because the heading on the Notice was to the Trustee of the Estate of Gary P. Sorenson.
6 I find his arguments totally without merit. The arguments put forward to the Court by counsel for the Respondent I believe correctly summarized the law. What is in issue primarily is assessment of tax. The Notice of Assessment is the Minister's way of notifying taxpayers. This taxpayer was notified and chose to follow the Act and go through the different steps. I think one of the best authorities on Notices of Assessment is the Leung case [(1991), 91 D.T.C. 1020 (T.C.C.)]. Originally the Leung case was heard in Vancouver by my colleague Rip where, in that case, it was a Director's liability case and the Minister in the Notice put a lump sum which included assessment under the Income Tax Act; assessment under C.P.P.; assessment under U.I., and assessment under the British Columbia Income Tax Act and Rip decided that the Notice was invalid because of the way the sums were lumped together and therefore the Appellant Leung was prejudiced because of the lumping.
7 The Queen appealed to the Federal Court. Trial Division and that appeal resulted in the decision of Mr. Justice Joyal of the Federal Court Trial Division reported in(1993), 93 D.T.C. 5467 (Fed. T.D.). Mr. Justice Joyal did an extensive review of the law on Notices of Assessment and he said, at the bottom of page 5472 when referring to Cullen J.:
Another case in point is that of Stephens v. The Queen, 84 D.T.C. 6114. In this case, five Notices of Re-Assessment were argued as void because they bore the incorrect department name and incorrect Deputy Minister's name. The Court held that the re-assessments were valid, for the alleged defects here were not confusing or prejudicial to the taxpayer, they were mere irregularities that could be cured. The Court determined that these were not defects, but, even if they were, relying on subsection 152(8) they could be cured by this provision of the Act.
8 Again he made reference at page 5473:
I cannot believe that the taxpayer was in any way misled into thinking that these forms did not emanate from the Department of National Revenue. I cannot believe that the taxpayer was either confused or prejudiced by the usage of this appellation. And it seems to me that the principle which emerges out of the Corsini and Richardson cases cited above is that documents such as those in dispute were not to be considered invalid when there is no prejudice or confusion created thereby.
9 I make the same comment today about this Appellant that came before me. I cannot believe for one-trillionth of a second that he did not realize that these assessments referred to his tax, it was his taxable income that was assessed by the Minister. He also knew he was a bankrupt and he in no way demonstrated that he was confused or in any way prejudiced because the Minister chose to address the Notices to the Trustee of the Estate of Gary P. Sorenson.
10 Another case that Joyal refers to and it is right on point and that is found at the bottom of the lefthand column of page 5474 in the case of the Greenwood Estate:
In the case of Greenwood Estate v. R. (1990), 90 D.T.C. 6690 (Fed. T.D.), Reed, J. held that the fact that the Notice of Assessment in issue bore the wrong name was a defect cured by the curative provisions of the Act as it did not have the effect of confusing the taxpayer as to its liability. Reed, J. did not consider such an error as being a fundamental one which renders an assessment nul. The assessment was therefore valid.
11 Although I do not accept for one moment that the Trustee of the Estate of Gary P. Sorenson is a different person, but even if I did so, the Greenwood Estate is authority that rectifies it. The Appellant knew he was re assessed. He filed tax returns, was re-assessed after which he took the procedure. How he had the nerve to even come here with this spurious argument before me is beyond comprehension.
12 I would also like to read further from Mr. Justice Joyal's decision at page 5479:
Generally speaking, one should eschew an overly formalistic approach to a Notice of Assessment. The Income Tax Act is not a penal statute (although it was so characterized many years ago) and a Notice of Assessment is neither similar or analogous to a charge or count on a criminal indictment. The hardened and extremely inflexible rules which apply to criminal proceedings do not and should not apply to a Notice of Assessment or to the proceedings which flow from it.
It may be assumed that Parliament had a purpose in enacting Section 152(3) and Section 152(8). That purpose, in my view, was to ensure that in the process of issuing millions of assessments yearly, many of these involving complex statutory provisions and equally complex calculations, technical accuracy or a peremptory level of disclosure, reference and source would not be imposed on the assessor. The Notice of Assessment is an administrative procedure and reliance on technical rules applicable to other processes to defeat it ab initio is not necessarily warranted.
In my opinion, the whole scheme of taxation presumes that a taxpayer will react to an assessment as would any reasonable person. He is not expected to sit back grinning like a Cheshire cat and, three years later, pounce on the seeming illegality or invalidity of the assessment because he has not been sufficiently informed and he has thereby suffered prejudice.
13 Herein the Appellant did not suffer any prejudice. He was informed. Going on:
Section 152(3) of the Act specifically states that a tax liability is not affected by an incorrect or an incomplete assessment. Sec. 152(8) further declares that an assessment is deemed to be valid notwithstanding any error, defect or omission therein. It seems to be that such clear provisions in a statute must be given some weight and they cannot be disregarded many months or years following an assessment, simply on a bare allegation by the taxpayer that he was misled, or surprised, or unable to instruct counsel.
14 Specifically I find herein that the Appellant was not misled. He was not surprised and he could have instructed counsel if he wished to and did instruct himself.
15 If it was within my powers, because I find the Appellant's case so lacking in merit, I would award solicitor and client costs against him, but fortunately for him that is not within my power. The appeal is dismissed for these reasons.
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