Citation: 2008TCC22
Date: 20080110
Docket: 2006-3072(IT)G
BETWEEN:
SUSANNE IWANOW,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR ORDER
Favreau, J.
[1] This is an appeal
against the assessments dated June 9, 2005 in respect of the appellant’s
taxation years 2000, 2001, 2002 and 2003.
[2] Based upon an
affidavit dated January 12, 2007, of Mr. Hubert de Groot, a litigation
agent of the Canada Revenue Agency (“CRA”) who was in charge of the appeal file
of the appellant, the relevant facts of this appeal are as follows:
a)
on
February 3, 2004, CRA sent to the appellant a request to file her income
tax return for each of the 2000 to 2002 taxation years;
b)
the
appellant did not comply with the request and on March 16, 2004, a formal
request to file income tax return for each of her 2000 to 2002 taxation years
was sent to the appellant;
c)
on
April 16, 2004, CRA sent to the appellant copies of her information
returns, namely T3, T4 and T5 information slips, issued to the appellant for
her 2000 to 20002 taxation years, to enable her to file her tax returns;
d)
on
August 10, 2004, the appellant requested assistance from CRA to file
her tax returns by providing a certified copy of the Income Tax Act to
her;
e)
in
September 2004, CRA informed the appellant of the existence of a commercial
version of the Income Tax Act, rather than a certified copy;
f)
by a
letter dated September 20, 2004, the appellant informed CRA that she could
not rely on such commercial version of the Income Tax Act, nor could she
rely on anyone who was willing to guarantee the accuracy of his or her advice,
thus preventing her from filing her tax returns;
g)
other
exchange of letters occurred between the appellant and CRA but the appellant
was still unwilling to estimate the amount of tax payable by filing her income
tax returns for the 2000 to 20002 taxation years;
h)
on
June 9, 2005, CRA issued assessments against the appellant’s 2000 to 2003
taxation years, notwithstanding the fact that she has not filed any tax
returns, in accordance with subsection 152(7) of the Income Tax Act,
R.S.C. 1985, c. 1 (5th supp.) as amended, (the “Act”);
i)
in
so assessing, CRA computed her taxable income and relied, among other things,
on the information slips issued to the appellant for the 2000 to 2003 taxation
years;
j)
further
in time, CRA provided to the appellant copies of the assessments previously
issued;
k)
the
appellant filed a notice of objection dated December 2, 2005 for her 2000
to 2003 taxation years;
l)
CRA
accepted the late filing of the notice of objection;
m)
on
April 12, 2006, CRA wrote to the appellant informing her that she had
received income during her 2000 to 2003 taxation years and, once again, invited
her to file her income tax returns for these years;
n)
on
May 26, 2006, CRA again required from the appellant to filing of her tax
returns for her 2000 to 2003 taxation years;
o)
on
June 8, 2006, the appellant wrote to CRA informing the agency that she was
still looking for a certified copy of the Income Tax Act in order for
her to file her tax returns;
p)
on
June 28, 2006, CRA wrote to the appellant requiring again the filing of her
tax returns;
q)
on
July 21, 2006, the appellant wrote to CRA, informing the agency that she
required a certified copy of the Income Tax Act with up‑to‑date
amendments;
r)
the
appellant has never informed the Appeal Division of CRA in what respect the
assessments issued for the 2000 to 2003 taxation years are incorrect;
s)
on
July 25, 2006, CRA confirmed the assessments for the 2000 to 2003 taxation
years;
t)
the
appellant has not yet filed her income tax returns for the 2004 and 2005
taxation years;
u)
on
April 13, 2006, CRA sent to the appellant by registered mail a formal
request to file her tax returns for her 2004 taxation year, as provided by
subsection 150(2) of the Act, but she did not comply with such request.
[3] On October 20,
2006, the appellant filed a notice of appeal to this Court in the following
terms:
[. . .]
I am contesting all the assessments for
the years 2000, 2001, 2002 and 2003 as they are based on fiction. I have been
trying to comply with the law but am unable to do so without the assistance of
Canada Revenue Agency agents in order to avoid any financial liability and/or
the possibility of criminal charges.
I have communicated numerous times with
several Canada Revenue Agency agents requesting they assist me in complying
with the law, but they have been unable or unwilling to provide any assistance
and thereby failed to perform their duties.
This negligence on their part has
resulted in the need for the present court proceedings. [. . .]
[4] On January 12,
2007, the respondent brought a motion to strike out the notice of appeal
without leave to amend pursuant to Rule 53 of the Tax Court Rules
(General Procedure) and to dismiss the appellant’s appeal on the basis
that:
a)
the
notice of appeal discloses no reasonable cause of action;
b)
it
is scandalous, frivolous and vexatious;
c)
the
appeal is otherwise an abuse of process of the Court.
[5] This Court heard
the motion on April 5, 2007 but did not render the orders sought by the
respondent. Rather the Court directed the parties to meet between April 24
and May 25, 2007 in order to help the appellant to file her returns and to
report back to the Court by no later than May 31, 2007 to inform it of the
status of the case.
[6] The May 31, 2007
deadline has been extended to July 31, 2006 and to August 31, 2007.
[7] On August 29, 2007,
the appellant required another extension to November 30, 2007 to report
back to Court but the respondent did not agree to a new date to communicate
with the Court as no meeting with the appellant has taken place and as no
indication has been shown by the appellant that her appeal will be based upon a
serious cause of action, even if T-1 returns were filed.
[8] The hearing of the
respondent's motion has been fixed to October 9, 2007.
[9] By letters dated
September 5 and 24, 2007 and October 4, 2007, the appellant asked this Court to
issue an order to adjourn the hearing of the motion to a future date because of
the illness of her accountant.
[10] The appellant's
request for a postponement of the hearing has been rejected because no progress
at all has been made since the first hearing of the motion on April 5,
2007.
[11] At the hearing, the
appellant explained that, in April 2007, she had retained the services of
an accountant to help her to file her tax returns. She said that he is a sole
practitioner having a master's degree in accounting with an office at home. She
hardly remembered his name, a Mr. Bernard Brosseau, and she has not been
able to provide the address of his office. She said that she met him twice and
that she remitted to him boxes of documents containing information concerning
her tax position.
[12] Concerning the
illness of the accountant, the appellant gave the following information:
a) he has been
hospitalized on May 5, 2007;
b) on
May 10, 2007, he had to undergo an amputation of his left foot at the
Centre hospitalier Charles Lemoyne;
c) his
recovery was interrupted by unforeseeable conditions and on July 10, 2007,
he was obliged to undergo a second amputation of his left leg up to the knee;
d) after
a period of convalescence, he will be returning to the hospital for prosthesis.
[13] At the hearing, the
appellant, who is a nurse in surgery, did not know when her accountant will be
able to return to work.
[14] The appellant argued
that the agreement reached with the respondent on April 5, 2007 should
stand. She said that she satisfied her undertakings to find a responsible tax
expert to undertake the necessary computations regarding the contested tax
returns and to file such. She further said that it is not reasonable nor
responsible for the respondent to place her in jeopardy due to an act of God.
[15] The respondent denied
that any form of agreement has been reached with the appellant in
April 2007. The respondent argued that the hearing of the motion did not
have to be postponed until an accountant is found. The respondent stated that
no development occurred in this file since April 5, 2007 and that no meeting
with the appellant has taken place. Finally, the respondent pointed out that
there is still no indication of what in the assessments is being contested.
[16] Considering the
facts described above and the pleadings of the parties, I am of the opinion
that the notice of appeal of the appellant did not disclose any reasonable cause
of action.
[17] It is a well
established principle that a Court may strike out a pleading where it is
"plain and obvious" that the pleading discloses no reasonable cause
of action (see Bruno v. Canada (Customs and Revenue Agency) 2002
BCCA 47, [2002]) B.C.J. No. 113 (QL) and Hunt v. Carey Canada Inc.,
[1990] 2 S.C.R. 959).
[18] It seems to me very
clear that there is no merit to the argument that a taxpayer who cannot find a
certified copy of the Income Tax Act cannot meet his/her legal
obligations. This issue has been considered in R. v. Gibbs,
2006 BCPC 215, [2006] B.C.J. No. 1189 (QL) and the judge came to the following
conclusion at paragraph 12:
[… ]
Ms. Gibbs argues that her defence of due
diligence is being made out, as she could not find a true copy of the Income
Tax Act and, therefore, could not be satisfied as to her legal obligations.
This argument has no merit. The Income Tax Act is readily available both
by a computer on-line, at the public library, and through the Government of
Canada. [. . .]
[19] Furthermore, it has
been decided in many cases, that CRA has no duty to produce an original or a
certified copy of the Income Tax Act to a taxpayer. In R. v.Gibbs,
2006 BCSC 481, [2006] B.C.J. No. 652 (QL), para. 54, the Court
referred to the following extract of Justice Tysoe in R. v. Holly
Bruno, [2001] B.C.J. No. 2905, 2001 BCSC 1828 at
para. 7:
"I am satisfied that the laws of the
country are contained in the 1985 Revised Statutes of Canada, as amended from
time to time thereafter. Those statutes were available to Ms. Bruno. She
has been convicted to that statute and the conviction is valid."
[20] That finding was
confirmed by the British Columbia Court of Appeal in R. v. Bruno,
[2002]) B.C.J. No. 1177, 2002 BCCA 348, at paragraph 7:
[. . .] it is my view that there is no
merit to the contention that Mr. Bruno does not have access to the laws of
Canada or the failure of the Crown to produce a version of the Income Tax
Act different from that generally available to the public, including
Mr. Bruno, amounts to a failure of disclosure [. . .].
[21] In R. v. Gibbs,
2003 BCPC 527, [2003] B.C.J. 3153 (QL), the Court concluded that the fact
that a compiled officially certified document such as the Income Tax Act
is not produced does not lay the groundwork for a defence of due diligence to
defeat an obligation to file a tax return. In paragraph 47, the Court made
the following statement:
[. . .] Accordingly, the mere fact of the
Tax Department not producing such a document to her, or her being able to find
a compilation as such, does not in and of itself raise an issue of due
diligence.
In
paragraph 54 of the above-mentioned decision, the Court made this
additional comment:
[. . .] The provisions are
there, people are bound by them, and the fact that a compiled officially
certified document is not produced does not lay the groundwork then for a
defence of due-diligence to defeat an obligation to file.
[22] The statement made
by the appellant in her notice of appeal to the effect that CRA's agents have
been unable or unwilling to provide any assistance and that they thereby failed
to perform their duties is not supported by the evidence and is totally
unfounded. Her requests for assistance were accompanied by unreasonable demands
for guarantees from CRA's agents as shown by the following extract of the
appellant's letter dated September 29, 2004 to Mr. Michel Lavigne of CRA:
[. . .] This state of affaires has
convinced me that I must rely on a professional who is able and willing to
guarantee his professional advice without any disclaimers. As you know, this is
a legal and financial matter, and filing an incorrect return can possibly have
major consequences. I wish to settle this matter, and to do so I hereby seek
your assistance and demand you provide me with the following:
·
A written guarantee
stating you have full and complete knowledge and understanding of the Canadian
Income Tax Act.
·
A written guarantee
stating you are able to apply the said act properly.
·
A written guarantee
that the version of the Canadian Income Tax Act published by CCH Canada Limited
is the law.
·
A written guarantee
stating you accept full personally liability that this, the version of the
Canadian Income Tax Act published by CCH Canada Limited, is the law.
·
Supporting documents that you have the capacity
to make the determination(s) that you do.
·
A written guarantee
stating you accept full personal liability that everything you instruct me to
do is in accordance with the certified copy of the Canadian Income Tax Act.
[23] On April 5, 2007, I
adjourned the hearing of the motion to give the appellant another chance to
comply with the Act and to file her tax returns. Counsel for the
respondent agreed to arrange a meeting with the appellant and an agent of CRA
to help her to calculate her income for the 2000 to 2003 taxation years. The
appellant found an accountant but no meeting with CRA could be arranged and no
progress whatsoever has been made in the file since April 5, 2007. When
the appellant realized that her accountant was sick, she did not make any
attempt to replace him by another qualified accountant. A nurse working in
surgery certainly knew that her accountant would not be able to help her to
file her tax returns for many months.
[24] From what I have
seen, I am convinced that the appellant does not really have the intention to
file the requested tax returns.
[25] Consequently, the
motion presented by the respondent for an order pursuant to Rule 53 of the
Tax Court Rules (General Procedures), that the notice of appeal of the
appellant be struck out, without leave to amend, is allowed and the appellant's
appeal from the assessments in respect of her 2000, 2001, 2002 and 2003
taxation years is dismissed without cost.
Signed at Ottawa, Canada, this 10th
day of January 2008.
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