Docket: 2009-3333(IT)G
BETWEEN:
FIDELITY GLOBAL OPPORTUNITIES FUND,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
____________________________________________________________________
The Honourable
Justice Valerie Miller
|
Counsel for the Appellant:
|
Salvatore
Mirandola
|
|
Counsel for the Respondent:
|
Darlene M. Lamey
|
____________________________________________________________________
ORDER
Upon
Motion by the Respondent for an Order of this Court striking out the
Appellant’s Notice of Appeal from the assessment made under the Income Tax
Act for the 2006 taxation year;
The
motion is granted and it is ordered that the purported appeal for the 2006
taxation year is quashed.
The
Respondent is awarded costs.
Signed at Ottawa, Canada, this 26th
day of February 2010.
“V.A. Miller”
Citation: 2010TCC108
Date: 20100226
Docket: 2009-3333(IT)G
BETWEEN:
FIDELITY GLOBAL OPPORTUNITIES FUND,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR ORDER
V.A. Miller, J.
[1]
The Respondent has
brought a motion for an Order to strike out the Notice of Appeal on the
following grounds:
a) A condition precedent to instituting a valid appeal has
not been met (paragraph 58(3)(b) of the Tax Court of Canada Rules
(General Procedure) (the Rules));
b) The Notice of Appeal discloses no reasonable grounds for
appeal (paragraph 58(1)(b) of the Rules);
c) The Notice of Appeal will prejudice or delay the fair
hearing of the action (paragraph 53(a) of the Rules);
d) The Notice of Appeal is scandalous, frivolous or
vexatious (paragraph 53(b) of the Rules), or is an abuse of
process (paragraph 53(c) of the Rules); and,
e) This court does not have jurisdiction to hear the appeal
as no notice of objection has been filed.
In support of its motion, the Respondent
has filed an affidavit of Vera Compton, Litigation Officer for the Canada
Revenue Agency in the Toronto Litigation Division of the Ontario office.
[2]
In its written
representations, the Respondent did not rely on ground (c) and I take it that
this ground has been abandoned. With respect to ground (d), it is my opinion
that the Notice of Appeal is not scandalous, frivolous or vexatious. The appeal
involves a claim to carry forward a net capital loss from 2002 to 2006.
[3]
On a motion to strike
pleadings on the ground that it discloses no reasonable grounds of appeal, the
question faced by the court is: If one assumes that the facts as stated in the
Notice of Appeal are true, is it “plain and obvious” that the action cannot
succeed?[1]
In the circumstances of this motion, this question must be answered in the
negative.
[4]
The Respondent’s final
grounds for the motion ((a) and (e)) – whether the Appellant filed a notice of
objection for its 2006 taxation year – is really the key issue in this motion.
[5]
The Appellant is a
mutual fund trust. In its income tax return for its 2006 taxation year, the
Appellant carried forward and applied a capital loss from its 2002 taxation
year. By assessment dated January 23, 2008 (2006 assessment), the Minister of
National Revenue (the “Minister”) reduced the net capital losses which the
Appellant could apply in calculating its 2006 taxable income. The Minister
denied the Appellant’s claim for a carry forward of a capital loss from 2002.
[6]
In response to the
assessment, the Appellant sent a letter dated February 11, 2008 to the Canada
Revenue Agency, Ottawa Technology Centre, Ottawa,
ON. In its letter, the Appellant stated that it did not
agree with the 2006 assessment and it requested two adjustments.
[7]
It is the Appellant’s
position that this letter of February 11, 2008 is a notice of objection.
[8]
The relevant portions
of section 165 of the Income Tax Act read:
165. (1) Objections to assessment -- A taxpayer who objects to an assessment
under this Part may serve on the Minister a notice of objection, in writing,
setting out the reasons for the objection and all relevant facts,
(a) where the
assessment is in respect of the taxpayer for a taxation year and the taxpayer
is an individual (other than a trust) or a testamentary trust, on or before the
later of
(i) the day
that is one year after the taxpayer's filing-due date for the year, and
(ii) the day
that is 90 days after the day of mailing of the notice of assessment; and
(b) in any other
case, on or before the day that is 90 days after the day of mailing of the
notice of assessment.
(2) Service
-- A notice of objection under this section shall be served by being addressed
to the Chief of Appeals in a District Office or a Taxation Centre of the Canada
Revenue Agency and delivered or mailed to that Office or Centre.
(6) Validity
of notice of objection -- The Minister may accept a notice of objection
served under this section that was not served in the manner required by
subsection (2).
[9]
The Appellant had 90
days after the day of mailing of the notice of assessment to serve a notice of
objection on the Minister[2].
It is my opinion that the Appellant’s letter of February 11, 2008 is sufficient
to satisfy the conditions in subsection 165(1) of the Act.
[10]
Subsection 165(2) of
the Act stipulates that a notice of objection shall be served by being
addressed to the Chief of Appeals in a District Office or a Taxation Centre.
The language in subsection 165(2) is mandatory[3]
and a letter to the Ottawa Technology Centre does not meet the requirements of
this subsection[4].
[11]
There are good reasons
why subsection 165(2) specifies that a notice of objection shall be served on
the Chief of Appeals. It is the Appeals Branch which deals with objections. If
objections are not served in accordance with subsection 165(2), then it would
be next to impossible for the Canada Revenue Agency to keep proper records and
to ensure that the objections are dealt with “with all due dispatch” as is
required in subsection 165(3) of the Act.[5]
[12]
I realize that
subsection 165(6) gives the Minister the discretion to accept a notice of
objection that was not served in accordance with subsection 165(2). However,
that discretion lies with the Minister and not this Court.
[13]
For the above reasons,
the Respondent’s motion is granted and the Notice of Appeal is quashed, with
costs to the Respondent.
Signed at Ottawa, Canada, this 26th day
of February 2010.
“V.A. Miller”
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