James Frederick Scott v. Minister of National Revenue, [1961] CTC 448, 61 DTC 1284

THORSON, P.:—In the course of the hearing of this cause and before counsel for the appellant had closed his case counsel for the respondent applied for an order allowing the respondent further time than 60 days within which to serve on the appellant and file in the court a reply to the notice of appeal herein notwithstanding the fact that the application for such further time was made after the expiration of the said 60 days.

The circumstances under which the application was made are unusual. The notice of appeal from the decision of the Income Tax Appeal Board, dated December 8, 1959, dismissing the appellant’s appeals against his income tax assessments for 1950, 1951 and 1952 was dated at Calgary on February 23, 1960, and filed in this Court on February 25, 1960. The respondent purported to file a reply of the said notice of appeal dated July 18, 1960, and filed in this Court on the same date. In the said purported reply the respondent purported to give notice by way of cross-appeal from the decision of the Income Tax Appeal Board allowing the appellant’s appeals against his income tax assessments for 1953, 1954 and 1955.

The purported reply and notice of cross-appeal was filed more than 60 days from the day the notice of appeal was received without any order having been made allowing a further time within which to file it.

Under the circumstances it was contended by counsel for the appellant that the notice of cross-appeal was not given in time and that the cross-appeal was not before the Court for consideration.

The question is a novel one. So far as I am aware it has never previously come before this Court for determination.

The sections of the Income Tax Act, R.S.C. 1952, Chapter 148, relating to the issue are Section 60(1), Section 99(1) and Section 99(la). They provide as follows:

“60. (1) The Minister or the taxpayer may, within 120 days from the day on which the Registrar of the Income Tax Appeal Board mails the decision on an appeal under section 99 to the Minister and the taxpayer, appeal to the Exchequer Court of Canada.

99. (1) The respondent shall, within 60 days from the day the notice of appeal is received, or within such further time as the court or a judge thereof may either before or after the expiration of that time allow, serve on the appellant and file in the court a reply to the notice of appeal admitting or denying the facts alleged and containing a statement of such further allegations of fact and of such statutory provisions and reasons as the respondent intends to rely on.

(la) If the respondent desires to appeal from the decision of the Tax Appeal Board, he may, instead of filing a notice of appeal under section 98, give notice by his reply (notwithstanding that it is filed and served after the expiration of the time for appeal fixed by section 60) by way of cross-appeal of his intention to contend that the decision of the Tax Appeal Board should be varied and set out therein a statement of such further allegations of fact and of such statutory provisions and reasons as he intends to rely on in support of the contention.”

It is desirable to find a way out of this procedural difficulty if that can lawfully be done. In my opinion, it can be.

As I see it, the purported reply and notice by way of crossappeal, having been served and filed beyond 60 days from the day the notice of appeal was served without an order allowing a further time within which such service and filing might be made, should be regarded as a nullity. It is, therefore, within the com- petence of the Court or a judge thereof to allow a further time than 60 days within which to serve on the appellant and file in the Court a reply to the notice of appeal herein, notwithstanding the fact that the 60-day period has expired. Since Section 99(1) makes it mandatory that the respondent should serve and file a reply I am of the opinion that I should, in the exercise of my discretion, allow the respondent’s application and I do so. The respondent may, therefore, today serve on the appellant and file in the court a reply to the notice of appeal herein. There is nothing to prevent the respondent from serving and filing the present purported reply.

It was submitted by counsel for the appellant that if I should exercise my discretion in favour of allowing the respondent further time within which to serve and file a reply to the notice of appeal herein, I should, in the exercise of my discretion, not allow the respondent to give notice by way of cross-appeal against the decision of the Income Tax Appeal Board allowing the appellant’s appeals against his income tax assessments for 19538, 1954 and 1955. In my opinion, it is not within my power to do so. I say this by reason of the provision in Section 99 (la) empowering the respondent, once he has the right to reply, to give notice by his reply by way of cross-appeal. The submission of counsel for the appellant cannot, therefore, be accepted. Moreover, even if I had a discretion in the matter I see no reason for exercising it as submitted and I would not do so.

It follows from what I have said that when the reply and notice by way of cross-appeal has been served and filed today, the cross-appeal will be immediately before the Court for disposition.

The appellant may then, pursuant to Section 99(lb) file a reply to the cross-appeal.

The appellant should have his costs of and incidental to this application and order. Such costs will be costs in the cause to the appellant in any event of the cause, and I fix their amount at $100.

Order accordingly.