Date:
20020219
Docket:
2001-3019-IT-APP
BETWEEN:
ANDRÉ
LAMOTHE,
Applicant,
and
HER MAJESTY
THE QUEEN,
Respondent.
Reasons
for Order
Lamarre
Proulx, J.T.C.C.
[1]
This is an application under section 167 of the Income
Tax Act (the "Act") to extend the time
within which the applicant may institute an appeal to this Court
for the 1993, 1994, 1995 and 1996 taxation years.
[2]
The application reads as follows:
[TRANSLATION]
. . .
1.
I HEREBY apply for an order extending the time within which an
appeal may be instituted from the decisions confirming the
notices of assessment for the 1993, 1994, 1995 and 1996 taxation
years;
2.
I received notices of assessment for the 1993, 1994, 1995 and
1996 taxation years;
3.
I objected to the said notices of assessment by notice of
objection;
4.
On May 5, 1999, the Director of Appeals sent me a notice
confirming the assessment for 1995 and stating that the
assessments for 1993, 1994 and 1996 would be varied and notices
of reassessment implementing the Minister's decision would be
sent, the whole as appears from the said notice, which is
attached in support hereof and a copy of which was provided to
the respondent as Exhibit R-1 at the time this
application was served;
5.
I do business with an accountant named
Alain Deschênes, C.A., whom I have instructed to
contest the decisions rendered;
6.
Objections were completed, as appears in particular from the
documents filed in support hereof, copies of which were provided
to the respondent as Exhibit R-2 at the time this
application was served;
7.
This also appears in particular from a statement of account dated
September 17, 1999, confirming that the amounts are disputed
- that at least is what I understood from it - the whole as
appears from the said document, a copy of which was provided to
the respondent as Exhibit R-3 at the time this
application was served;
8.
On February 2, 2000, the respondent sent a notice concerning
tax owed for 1993, 1994, 1995 and 1996, as appears from the said
document, a copy of which was provided to the respondent as
Exhibit R-4 at the time this application was
served;
9.
I checked once again with my agent, Alain Deschênes,
C.A., to ensure that the notices of appeal from those decisions
had been filed since I am contesting the said notices of
assessment;
10.
I always believed that the said notices of appeal had in fact
been filed;
11.
However, on March 19, 2001, a requirement to pay was sent by
the respondent, as appears from the said document, a copy of
which was provided to the respondent as Exhibit R-5 at
the time this application was served;
12.
That document was accompanied by a letter dated February 14,
2000, that was sent to the accountant,
Alain Deschênes, stating that only 1995 had been the
subject of a notice of appeal to the Tax Court of Canada, the
whole as appears more fully from that letter, a copy of which was
provided to the respondent as Exhibit R-5 at the time
this application was served;
13.
That notice stated that, as no action had been taken as of
March 19, 2001, requirements to pay had been sent to the
applicant's known financial institutions and
clients;
14.
I was subsequently informed of this situation;
15.
I am extremely surprised and have suffered serious prejudice as a
result of this situation since it has always been my intention to
contest by notice of appeal not only the decision concerning
1995, but also the decision concerning 1993, 1994 and
1996;
16.
I had moreover instructed my accountant to do so;
17.
In the circumstances, I have a sound basis for respectfully
applying for an extension of time for filing a notice of appeal
regarding the assessments made for 1993, 1994 and
1996;
18.
This application is well founded in fact and in law;
. . .
[3]
Paragraphs 2 to 4 and paragraphs 8 and 11 were admitted
by the respondent. The respondent admitted paragraph 6,
except with regard to the year 1995.
[4]
The facts on which the Minister of National Revenue (the
"Minister") relies are described in paragraphs 14
to 20 of the Reply to the Application for an Extension of Time
(the "Reply") as follows:
[TRANSLATION]
...
14.
On June 29, 1998, the Minister of National Revenue
(hereinafter the "Minister") sent the applicant notices
of reassessment for the 1993, 1994, 1995 and 1996 taxation
years.
15.
On or around September 22, 1998, the applicant served notice
on the Minister of his objection to the notices of reassessment
dated June 29, 1998, for the 1993, 1994, 1995 and 1996
taxation years.
16.
By registered mail dated May 5, 1999, the Minister informed
the applicant that he had confirmed the reassessment dated
June 29, 1998, for the 1995 taxation year and had that same
day issued notices of reassessment for 1993, 1994 and
1996.
17.
The applicant did not institute an appeal to the Tax Court of
Canada, under subsection 169(1) of the Income Tax Act
(hereinafter the "Act") within the prescribed
time, which ended on August 3, 1999, respecting the
reassessment dated June 29, 1998, for the 1995 taxation
year, which had been confirmed on
May 5, 1999.
18.
On or around July 19, 1999, the applicant served notice on
the Minister of his objection to the notices of reassessment
dated May 5, 1999, for the 1993, 1994 and 1996 taxation
years.
19.
By registered mail dated August 25, 1999, the Minister
informed the applicant that he was confirming the assessments
dated May 5, 1999, for the 1993, 1994 and 1996 taxation
years.
20.
The applicant did not appeal to the Tax Court of Canada, under
subsection 169(1) of the Income Tax Act (hereinafter
the "Act") within the prescribed time, which
ended on November 23, 1999, respecting the reassessments
dated May 5, 1999, for the 1993, 1994 and 1996 taxation
years, confirmed on August 25, 1999.
. . .
[5]
The applicant testified. Notices of reassessment had been issued
on June 29, 1998, for the years 1993 to 1996 (those notices
were filed as Exhibit I-3 during the examination of
the Minister's officer, Denis Blais). Subsequently,
notices of objection had been duly served on the
Minister.
[6]
On May 5, 1999, the applicant received the Minister's
decision. The assessment for 1995 was confirmed. Reassessments
were issued for 1993, 1994 and 1996 (Exhibits R-1 and
I-4). Notices of objection were served for 1996, 1994 and
1993 (Exhibit R-2).
[7]
Exhibit R-3 is a statement of account dated
September 17, 1999. It contains the inscription [Translation] "disputed amount" with
respect to three amounts.
[8]
On February 2, 2000, he received a letter from Revenue
Canada claiming the tax owed. The letter informed him that no
notice of appeal had been filed in respect of the assessments for
1993 to 1996. It noted that, with respect to the 1995 assessment,
notice of confirmation had been sent on May 5, 1999, and
that notices concerning 1993, 1994 and 1996 had been sent on
August 25, 1999. The letter was filed as
Exhibit R-4.
[9]
Exhibit R-5 is a requirement to pay dated
March 19, 2001.
[10] The
applicant repeated several times that, the moment he received
income tax documents, he took them to his accountant and asked
him to take care of everything.
[11] The
respondent's first witness was Alain Deschênes,
the applicant's accountant. Mr. Deschênes, a
chartered accountant, said the following concerning the years in
question, at pages 32 and 33 of the transcript:
[TRANSLATION]
. . .
A.
. . . I don't know the procedures for this,
and I know nothing about it, in fact, it's
not . . . it's not my . . . my
responsibility.
Q.
Was that, was that explained to Mr. Lamothe? And how
so?
A.
I can't tell you that we had . . . I don't
remember discussing that since prior to this, we had a case
regarding previous years and exactly the same thing had occurred
- we had to prepare notices of objection regarding decisions that
had been rendered; Mr. Lamothe decided to appeal from them,
and he hired a tax lawyer to appeal from those
decisions.
Q.
So you weren't the one who prepared the notices of appeal for
the previous years?
A.
Not the notices of appeal. The notices of objection, yes, but not
the appeals.
Q.
To your recollection, according to your recollection since it
took place in 1999, what words did Mr. Lamothe use, or what
exactly did he ask you to do at the outset when he asked you to
object? What did he tell you?
A.
Well, in fact, he naturally wanted to justify that it wasn't
right, in fact, to tax additional amounts; I think his intention
was actually to take the same steps as in the years 87 to 90, for
which he is already appealing the decision, but perhaps
we . . . there may have been a misunderstanding on
the procedures to follow on my end for the notices of objection
and concerning the lawyer for the subsequent appeal if there were
still amounts to claim.
Q.
What do you mean the same proceeding that had taken
place?
A.
For the previous years in fact, which are also under
appeal.
[12] The
accountant explained that he had taken care of the notices of
objection but not the notices of appeal since that was not part
of his work but the work of a lawyer, and that the applicant had
to know this since he had used the services of a lawyer in the
past for appeals concerning previous years.
[13] Counsel for
the respondent showed him a photocopy of a fax sent to him by
Denis Blais, an Appeals Division officer, on
February 14, 2000, informing the accountant that the
reassessments of André Lamothe for 1993, 1994 and
1996 had been confirmed on August 25, 1999, and that
Mr. Lamothe had had until November 23, 1999, to
file a notice of appeal with the Tax Court of Canada. It also
stated that nevertheless, Mr. Deschênes' client
could still file an application for an extension of the time
within which to file a notice of appeal with the Tax Court of
Canada. That copy was filed as Exhibit I-2. The
accountant said that he did not remember discussing the
possibility of instituting an appeal.
[14] The
accountant could not have been any more specific when questioned
by counsel for the applicant. He did not admit that he had been
instructed to file notices of appeal. In his view, that task was
the responsibility of counsel for the applicant.
[15] The
respondent's second witness was Denis Blais, an
investigator with the Canada Customs and Revenue Agency. He
explained that the notice of confirmation sent for 1995 and those
relating to 1993, 1994 and 1996 were sent to the applicant and
his agent, Mr. Deschênes. They are
Exhibits I-4 and I-1.
[16]
Exhibit I-4 consists of a letter dated May 5,
1999, signed by the Director of Appeals, concerning the notices
of objection for the 1993 to 1996 taxation years. Attached to
that letter are the confirmation for 1995 and the reassessments
for 1993, 1994 and 1996. It clearly states that the assessment
for 1995 is confirmed and that those for 1993, 1994 and 1996 will
be reassessments. The addressees are the applicant and his
accountant. Exhibit I-5 shows that the letter was sent
to those persons by registered mail.
[17]
Exhibit I-1, dated August 25, 1999, is the
Minister's notice of confirmation concerning the 1993, 1994
and 1996 taxation years. The addressees are again the same two
persons. Exhibit I-7 indicates that the letter was
sent to the applicant by registered mail.
[18] In both
cases, there is a paragraph stating that, if the person does not
agree with the decision, he may institute an appeal to the Court
and that enclosed is the information he will need on how to
proceed.
Arguments
[19] Counsel for
the applicant argued that the applicant had relied on his
accountant. Counsel referred to a decision by Judge Tremblay
of this Court in Dufour v. M.N.R., 90 DTC 1238
and quoted the headnote, which states:
. . . there was no reason that the taxpayer should
have to suffer the results of the obvious error made by the firm
of accountants on which he had relied, particularly when he had
prima facie grounds for an appeal, and when such prompt action
was taken to rectify that error, once it had been
discovered.
[20] Counsel for
the respondent argued that, for 1995 as well as for 1993, 1994
and 1996, the applicant had exceeded the strict time limit
imposed by subsection 167(5) of the Act for filing an
application for an extension of time to appeal. The application
had to be made within one year after the expiration of the time
limited by section 169 for appealing. For 1995,
Mr. Lamothe had until August 2, 2000, and for the 1993,
1994 and 1996 taxation years, the time limit expired on
November 22, 2000. The application for extension was filed
on June 11, 2001.
[21] Counsel for
the respondent referred to the decision by the Federal Court of
Appeal in Minuteman Press of Canada Company Limited v.
M.N.R., 88 DTC 6278, which was dated May 4, 1988.
That court held that, once it has been determined that no
application was made for an extension of time to appeal within
the time limit, the question of whether or not it would be just
and equitable to grant an extension of time does not
arise.
|
. . . Once it has been determined that
no application was made for an extension of time to
appeal within the one year limit, the question of whether
or not it would be just and equitable to grant an extension
of time to appeal does not arise.
|
[TRANSLATION]
. . . Dès lors qu'il a
été statué qu'aucune demande de
prorogation de délai n'a été
présentée, la question de savoir s'il
serait juste et équitable d'accorder une
prorogation ne se pose pas. En conséquence, nous
estimons qu'il a à bon droit rejeté la
demande de la requérante conformément
à l'article 167 de la Loi de
l'impôt sur le revenu.
. . .
|
[22] Counsel for
the respondent referred to similar decisions of this Court by
Judge Rip in Shéridan v. Canada, [2001]
T.C.J. No. 83 (Q.L.), and by Judge Tremblay in
Bertrand v. Canada, [1995] T.C.J. No. 768
(Q.L.).
[23] While
noting that the issue of whether the accountant had been
negligent was not relevant in this case since the time limit had
expired, counsel for the respondent nevertheless referred to
several decisions on that point including a decision by the
Federal Court of Appeal in Zamko v. Canada, [1996]
F.C.J. No. 1363 (Q.L.), and the decision by this Court in
Zamko v. Canada, [1995] T.C.J. No. 1771 (Q.L.),
according to which the onus is on the taxpayer to take due care
in conducting his affairs.
[24] As to the
decision in Dufour, supra, cited by counsel for the
applicant, counsel for the respondent argued that in that case
the application for an extension of the time to appeal had been
made within the time limit.
Conclusion
[25]
Subsections 167(1) and (5) of the Act read as
follows:
167(1) Extension of time to
appeal - Where an appeal to the Tax Court of Canada has not
been instituted by a taxpayer under section 169 within the
time limited by that section for doing so, the taxpayer may make
an application to the Court for an order extending the time
within which the appeal may be instituted and the Court may make
an order extending the time for appealing and may impose such
terms as it deems just.
167(5) When order to be made
- No order shall be made under this section unless
(a)
the application is made within one year after the expiration of
the time limited by section 169 for appealing;
and
(b)
the taxpayer demonstrates that
(i)
within the time otherwise limited by section 169 for
appealing the taxpayer
(A)
was unable to act or to instruct another to act in the
taxpayer's name, or
(B)
had a bona fide intention to appeal,
(ii)
given the reasons set out in the application and the
circumstances of the case, it would be just and equitable to
grant the application,
(iii)
the application was made as soon as circumstances permitted,
and
(iv)
there are reasonable grounds for the appeal.
[26] I do not
have to determine whether the accountant or the applicant was
negligent in the circumstances of the instant case. These are not
relevant factors. I described the evidence that was presented
since it had been presented. However, as the Federal Court of
Appeal held in Minuteman Press of Canada Company Limited,
supra, once it has been determined that no application was
made for an extension within one year after the expiration of the
time limited by section 169, the question of whether or not
it would be just and equitable to grant an extension of time does
not arise.
[27] On the one
hand, the notices of confirmation for the taxation years in issue
were sent in accordance with the Act and were received by
the applicant. On the other hand, the applications for an
extension of time for each of those years were filed after the
one-year time limit provided for in
paragraph 167(5)(a) of the Act. The Court does
not have the discretion to extend that time, which is a strict
time limit. The only discretion it has is to extend the
90-day period provided for in subsection 169(1) of the
Act, which is not the time limit at issue here.
[28] The
application is accordingly dismissed.
Signed at
Ottawa, Canada, this 19th day of February 2002.
J.T.C.C.
[OFFICIAL
ENGLISH TRANSLATION]
APPLICATION
UNDER SECTION 167 OF THE
INCOME TAX ACT (APPEAL)
2001-3019(IT)APP
BETWEEN:
ANDRÉ
LAMOTHE,
Applicant,
and
HER MAJESTY
THE QUEEN,
Respondent.
Application
heard on November 29, 2001, at Québec, Quebec,
by
the
Honourable Judge Louise Lamarre Proulx
Appearances
Counsel
for the
Applicant:
Marc Bouchard
Counsel
for the
Respondent:
Dany Leduc
ORDER
The application for an order extending the time within which an
appeal from the assessments made under the Income Tax Act
for the 1993 to 1996 taxation years may be instituted is
dismissed in accordance with the attached Reasons for
Order.
Signed at
Ottawa, Canada, this 19th day of February 2002.
J.T.C.C.
[OFFICIAL
ENGLISH TRANSLATION]
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