Citation: 2007TCC539
Date: 20070907
Docket: 2007-1687(GST)APP
BETWEEN:
COLLINGWATER INVESTMENTS INC.,
Applicant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR JUDGMENT
V.A. Miller, J.
FACTS
[1] By Notice of Assessment dated February 23, 2005, the
Minister of National Revenue (“Minister”) assessed the Applicant for the period
commencing December 1, 1998 and ending November 30, 1999.
[2] The Applicant objected to the assessment by Notice of
Objection dated April 23, 2005 and received by the Canada Revenue Agency
(“CRA”) on May 17, 2005.
[3] The Minister confirmed the assessment by Notice of
Decision dated February 10, 2006.
[4] The Applicant, through its accountant Mr. French, sent
a proposed Notice of Appeal, which was received by the Tax Court of Canada on
May 8, 2006. By letter dated May 12, 2006, Mr. French was advised that the
appeal was not a proper General Appeal and, further that an accountant could
not represent a taxpayer before the Court under the Tax Court of Canada
Rules (General Procedure). Mr. French was asked to prepare a proper Notice
of Appeal and it was suggested that he forward an application for an extension
of time to file the Notice of Appeal.
[5] The only response received from Mr. French was in a
letter dated April 4, 2007. It stated:
The facts of the dispute are outlined as per the attached letters.
The appeal should be allowed in accordance with the fairness
provisions and due to the fact of the miscommunication of facts and information
by Revenue Canada
representatives.
If you have any questions regarding this matter please do not
hesitate to contact me.
[6] The attached letters were the same letters that were
included in the proposed Notice of Appeal. The
hearing was attended by Robert Smith, President of Collingwater Investments
Inc. and he was assisted by Mr. French. Mr. French confirmed that the Applicant
intended to appeal pursuant to the General Procedure.
[7] The Respondent opposed this application for an
extension of time on the basis that there were not reasonable grounds for the
appeal within the meaning of subparagraph 305(5)(b)(iv) of the Excise Tax
Act (“Act”).
ISSUE
[8] Should the Applicant be granted an extension of time
to file a Notice of Appeal?
ANALYSIS
[9] Section 305 of Part IX of the Act reads as
follows:
305. (1)
Where no appeal to the Tax Court under section 306 has been instituted within
the time limited by that provision for doing so, a person may make an
application to the Tax Court for an order extending the time within which an
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.
(2) An application made under subsection
(1) shall set out the reasons why the appeal to the Tax Court was not
instituted within the time otherwise limited by this Part for doing so.
(3) An application made under
subsection (1) shall be made by filing in the Registry of the Tax Court, in accordance
with the provisions of the Tax Court of Canada Act, three copies of the
application accompanied by three copies of the notice of appeal.
(4) After receiving an application
made under this section, the Tax Court shall send a copy of the application to
the office of the Deputy Attorney General of Canada.
(5) No order shall be made under
this section unless
(a) the application is
made within one year after the expiration of the time otherwise limited by this
Part for appealing; and
(b) the person demonstrates
that
(i) within the time otherwise
limited by this Part for appealing,
(A) the person was unable to
act or to give a mandate to act in the person’s name, or
(B) the person 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 it to be made, and
(iv) there are reasonable
grounds for appealing from the assessment.
[10] This section stipulates how an application for an extension
of time is to be made, the contents of the application and the conditions the
Applicant must satisfy before an Order can be made. I have concluded that the
application filed by the Applicant is inadequate. It does not comply with
subsection 305(3).
[11] As well, neither the application filed by the
Applicant nor the testimony at the hearing, demonstrated that there are
reasonable grounds for appealing from the assessment in accordance with
subparagraph 305(5)(b)(iv). The only grounds of appeal raised by the Applicant
were estoppel and the fairness provisions. Neither of these are reasonable
grounds for appealing from the assessment.
[12] In its application, the Applicant is in essence saying
that the Minister is estopped from assessing in a certain manner as his
representatives gave incorrect information. The issue of estoppel was discussed
by Bowman, J. (as he then was) in Goldstein v. Canada,
[1985] 2 C.T.C. 2036. He stated at paragraphs 21 to 23:
21 There
is much authority relating to the question of estoppel in tax matters and no
useful purpose would be served by yet another review of the cases. I shall
endeavour however to set out the principles as I understand them, at least to
the extent that they are relevant. Estoppels come in various forms -- estoppel in
pais, estoppel by record and estoppel by deed. In some cases reference is
made to a concept of "equitable estoppel", a phrase which may or may
not be accurate. (See Canadian Pacific Railway Co. v. The King,
[1931] A.C. 414 at page 429. Cf. Central London Property Trust Ltd. v.
High Trees House Ltd., [1947] 1 K.B. 130.) It is sufficient to say that
the only type of estoppel with which we are concerned here is estoppel in
pais. In Canadian Superior Oil Ltd. v. Paddon-Hughes Development
Co., [1970] S.C.R. 932 at pages 939-40 Martland J. set out the factors
giving rise to an estoppel as follows:
The
essential factors giving rise to an estoppel are I think:
(1)
A representation or conduct amounting to a representation intended to induce a
course of conduct on the part of the person to whom the representation is made.
(2)
An act or omission resulting from the representation, whether actual or by
conduct, by the person to whom the representation is made.
(3)
Detriment to such person as a consequence of the act or omission.
22 Estoppel
is no longer merely a rule of evidence. It is a rule of substantive law. Lord
Denning calls it "a principle of justice and of equity". (See Moorgate
Mercantile Co. v. Twitchings, [13] 1 Q.B. 225,
at page 241.)
23 It
is sometimes said that estoppel does not lie against the Crown. The statement
is not accurate and seems to stem from a misapplication of the term estoppel.
The principle of estoppel binds the Crown, as do other principles of law.
Estoppel in pais, as it applies to the Crown, involves representations
of fact made by officials of the Crown and relied and acted on by the subject
to his or her detriment. The doctrine has no application where a particular
interpretation of a statute has been communicated to a subject by an official
of the government, relied upon by that subject to his or her detriment and then
withdrawn or changed by the government. In such a case a taxpayer sometimes
seeks to invoke the doctrine of estoppel. It is inappropriate to do so not
because such representations give rise to an estoppel that does not bind the
Crown, but rather, because no estoppel can arise where such representations are
not in accordance with the law. Although estoppel is now a principle of
substantive law it had its origins in the law of evidence and as such relates
to representations of fact. It has no role to play where questions of
interpretation of the law are involved, because estoppels cannot override the
law.
[13] The ground of appeal based on estoppel must fail as an
assessment must be made pursuant to the provisions of the Act and it is not
open to a taxpayer to set up an estoppel to prevent the operation of the
statute.
[14] The Applicant has also asked that the
appeal (application) be allowed in accordance with the fairness provisions.
Section 281.1 is commonly referred to as the fairness provisions. Section 281.1
reads:
281.1 (1) The
Minister may waive or cancel interest payable by a person under section 280.
(2) The
Minister may waive or cancel penalties payable by a person under section 280.
[15] Section 281.1 of the Act confers on the Minister the
discretion to waive or cancel penalties. The Tax Court of Canada does not have
the jurisdiction to review the Minister’s exercise of discretion.
[16] This is a situation where the documents filed with the
Court and the representations made by the Applicant’s representative were inadequate.
The following statement made by Dussault, T.C.J., in Ferrara v. R.,
[2002] T.C.J. No. 60 at paragraphs 9 and 10 is appropriate in this case:
[9]
When persons present themselves as accountants and claim to represent taxpayers
before the Tax Court of Canada, something that is allowed under the statutory
provisions governing the informal procedure, they must agree to fulfill the
obligations of that mandate with a minimum of professionalism and competence;
otherwise they are liable to action by taxpayers who may be deprived of their
rights.
[10] In this
case, I consider that the notice of appeal does not meet the minimum standards
that would make it possible to state that there are reasonable grounds for the
appeal. The application for an extension of time does not remedy this situation.
[17] The application for an extension of time is dismissed.
Signed at Vancouver, British Columbia this 7th day of September, 2007.
“V.A. Miller”
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