Docket: 2011-715(IT)G
BETWEEN:
LILA PARDIAK,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
____________________________________________________________________
Motion
heard on June 3, 2011 and July 6, 2011 at Montreal, Quebec
Before: The Honourable
Justice G. A. Sheridan
Appearances:
|
For the Appellant:
|
The
Appellant herself
|
|
Counsel for the Respondent:
|
Gabriel Girouard
|
____________________________________________________________________
ORDER
In accordance with the attached Reasons for
Order, it is hereby ordered that:
1.
the Respondent’s motion to dismiss
the Appellant’s appeal is dismissed;
2.
the Appellant’s application for an
extension within which to file her Notice of Appeal is granted and the Notice
of Appeal is deemed to have been filed as of the date of this Order;
3.
the Respondent shall have 90 days
from the date of this Order to file its Reply to the Notice of Appeal; and
4.
the matter of costs shall be left
to the trial judge.
Signed at Ottawa,
Canada, this 2nd day of August 2011.
“G.A. Sheridan”
Citation: 2011TCC375
Date: 20110802
Docket: 2011-715(IT)G
BETWEEN:
LILA PARDIAK,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR ORDER
Sheridan J.
[1]
The Respondent brought a motion for an order to dismiss
the appeal of the Appellant’s 2005 taxation year on the grounds that the Notice
of Appeal had not been filed with the Tax Court of Canada within the time
provided by subsection 169(1) of the Income Tax Act (the “Act”) or,
in the alternative, an order extending the time for the Respondent to file its
Reply to the Notice of Appeal. The hearing of the motion originally set
down for June 3, 2011 was adjourned to July 6, 2011 to permit the attendance of
the Appellant, who not understanding that under the Tax Court of Canada
Rules (General Procedure) her presence was required had sent her husband to
represent her.
[2]
In support of its motion, the
Respondent filed the Affidavit of Mr. Marcel Savaria, Litigation Officer,
Canada Revenue Agency. Mr. Savaria was also present at the hearing and
testified on behalf of the Minister.
[3]
The Appellant and her husband, Sam
Saad testified on her behalf.
[4]
The following facts are not in
dispute: on December 7, 2009 the Minister of National Revenue issued a
reassessment (“Original Reassessment”) of the Appellant’s 2005 taxation year.
The Appellant filed a Notice of Objection to the reassessment received by the
Minister on December 21, 2009. The Minister confirmed the reassessment on July
14, 2010.
The Appellant did not file her Notice of Appeal with the Tax Court of Canada
until March 11, 2011, well beyond the 90-day time to appeal under subsection
169(1) of the Act.
[5]
However, where a taxpayer has
filed a notice of objection to a reassessment but misses the deadline for
filing her appeal, she may apply to the Tax Court of Canada under subsection
167(1) for an order to extend the time. In the present case, the one-year
period for the Appellant to make an application under subsection 167(1) had not
yet expired prior to the hearing of the Respondent’s motion to dismiss;
accordingly, I treated the Appellant’s defence to the Respondent’s motion as if
it had been a formal application for an extension of time to appeal from the
Notice of Confirmation dated July 14, 2010.
[6]
Having made the application within
the time permitted under paragraph 167(5)(a) of the Act, it
remained for the Appellant to satisfy the criteria for the granting of an
extension of time under paragraph 167(5)(b):
167(5) No
order shall be made under this section unless
(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.
[7]
As counsel for the Respondent correctly
noted in his submissions, the jurisprudence is clear that for a taxpayer to
succeed under paragraph 167(5)(b), all of the criteria must be met; Dewey
v. R., 2004 FCA 82 (F.C.A.). This I am satisfied the Appellant has done.
[8]
Both the Appellant and her
husband, Sam Saad, testified at the hearing. Briefly stated, their answer to
the Respondent’s motion to dismiss was that they simply did not receive the
Notice of Confirmation dated July 14, 2010. Had they done so, they most
certainly would have appealed. I say “they” because while the Appellant was
involved in the matter, she had also authorized Mr. Saad to handle dealings
with the Minister’s officials. In support of their contention, they pointed to
the fact that when they received the Original Reassessment on December 7, 2009,
they promptly filed a Notice of Objection on December 21, 2009. This was
confirmed by Mr. Savaria who had made a very thorough review of the Appellant’s
file. The reason they did not take any steps after the issuance of the Notice
of Confirmation on July 14, 2010 was that not having received it, they were
under the impression that their objection was still under consideration. To
paraphrase Mr. Saad’s submission, a taxpayer cannot be expected to appeal from
a document of whose existence he is unaware.
[9]
I accept the Appellant’s evidence
that it was not until sometime in January or February 2011 that she realized a
decision had been rendered in respect of her Notice of Objection. Around that
time, she received a call from her bank to inform her that the Canada Revenue
Agency had garnisheed her Child Tax Benefits; this was closely followed by
calls from the CRA Collections Department to say they would be proceeding with
efforts to collect the amounts owing on the Original Reassessment. The
Appellant remembered this date because she depended on such payments and was
understandably upset at the news. After consulting with her husband, she filed
her Notice of Appeal on March 8, 2001.
[10]
I must say that while I found some
of their evidence unpersuasive, on the question of whether the Appellant had a bona
fide intention to appeal “within the time otherwise permitted by section
169 for appealing”, both the Appellant and Mr. Saad were quite convincing. I am
satisfied that during the 90-day period under subsection 169(1), they continued
to believe that, having filed the Notice of Objection and not having heard back
from the Minister, everything that could be done to appeal the assessment had
been done. In reaching my conclusion, I do not discount the testimony of Mr.
Savaria who provided the Court with a thorough review of the Appellant’s files
and a helpful explanation of the administrative workings of the CRA. However,
no process is infallible. In an operation of its size, there is always the risk
that a piece of correspondence may not reach its destination. And in any case, satisfying
the criterion under sub-subparagraph 167(5)(b)(i)(B) requires the
finding of facts to support the bona fides of the taxpayer’s intention
to appeal rather than whether the Notice of Confirmation was actually
sent.
[11]
Turning, then, to the criteria
under subparagraphs (ii), (iii) and (iv), I am satisfied firstly, that the
Appellant filed her appeal as soon as circumstances permitted on March 8, 2011
after having only learned of the confirmation of the Original Reassessment
sometime in February 2011. It is also clear that there are reasonable grounds
for the appeal: in the second and fifth unnumbered paragraphs of the
Appellant’s Notice of Appeal, she puts in issue the basis of the Minister’s
reassessment that in 2005 she received a benefit from a corporation of which
she was a director. That leaves only the criterion in subparagraph (ii), that
given the reasons for the Appellant’s request for an extension of time and the
circumstances of the case, it would be “just and equitable” to grant the
application. For the reasons set out above and on the footing that justice is
better served when matters are decided on the merits rather than on procedural
technicalities, I am satisfied that the Appellant has also met this final
requirement.
[12]
For the reasons set out above, it
is hereby ordered that:
1.
the Respondent’s motion to dismiss
the Appellant’s appeal is dismissed;
2.
the Appellant’s application for an
extension within which to file her Notice of Appeal is granted and the Notice
of Appeal is deemed to have been filed as of the date of this Order;
3.
the Respondent shall have 90 days
from the date of this Order to file its Reply to the Notice of Appeal;
4.
the matter of costs shall be left
to the trial judge.
Signed at Ottawa, Canada, this 2nd day
of August 2011.
“G.A. Sheridan”
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