Citation: 2006TCC567
Date: 20061116
Dockets: 2004-4325(IT)G
2004-4324(GST)G
BETWEEN:
EDWINA CYR,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
[OFFICIAL ENGLISH
TRANSLATION]
REASONS FOR ORDER
Angers J.
[1] This is a motion
filed by the Respondent to have the two above-mentioned appeals dismissed for
delay, under section 64 of the Tax Court of Canada Rules (General Procedure)
(the “Rules”), due to the Appellant’s failure to prosecute the appeals with
due dispatch and, in the alternative, due to the Appellant’s failure to meet
the undertakings made at the examination for discovery, under section 110 of
the Rules. Also, in the alternative, the Respondent is requesting an order
peremptorily setting the date for compliance with undertakings arising from the
examination for discovery that took place on April 4, 2006, and the costs
associated with this motion.
[2] In support of her
motion, the Respondent has filed three affidavits, including two sworn by
Dorena Gillis on August 17 and September 7, 2006, and one by Guy Savoie on
October 10, 2006. The Appellant has not filed any affidavits in response to
this motion. The motion was to be heard on September 11, 2006, but the
Appellant did not appear on that date. The Court decided en officio to adjourn
the motion until October 13, 2006, and to proceed by telephone conference call.
An order to this effect was made, as well as an order setting at October 13,
2006, the date by which the Appellant had to meet her undertakings.
[3] The two Notices of
Appeal in this case are dated June 14, 2005.
[4] The Appellant, who
was then represented by counsel, and the Respondent agreed on December 7, 2005,
that the examinations for discovery would take place on January 31 and February
1, 2006, at the office of the Appellant’s counsel in Grand Falls, New Brunswick.
[5] Shortly after, i.e.
December 23, 2005, the chief justice of the Tax Court of Canada made an order
in docket 2004-4325(IT)G setting dates for the production of lists of
documents, the examinations for discovery and the compliance with undertakings
arising from the examinations for discovery for January 15, 2006, February 1,
2006, and March 1, 2006, respectively. Following this order, the Appellant filed
and served her list of documents for the two appeals on January 11, 2006, and
the Respondent did so on January 16, 2006. Concerning docket 2004-4324(GST)G,
Justice Paris of this Court made an order setting dates for the examinations
for discovery and the compliance with undertakings arising from the
examinations for discovery for the same dates as those set in the chief
justice’s order of December 23, 2005.
[6] The evidence
reveals that on January 25, 2006, i.e. six days before the examination for
discovery, the Appellant’s counsel notified the Respondent that he was no
longer representing her. It was therefore impossible to hold the examination
for discovery on the set date and, thereafter, to comply with the orders of the
Court. The Respondent’s counsel therefore filed and served, on February 28,
2006, a written motion for an extension of time, pursuant to Practice Note No.
14. The Appellant did not respond to the Respondent’s motion within the time
prescribed by subsection 69(3) of the Rules. Counsel for the Respondent
therefore wrote to the Court on March 2 asking it to allow its motion and
asking that the dates suggested in the Notice of Motion be postponed by 30
days.
[7] On March 16, 2006,
Chief Justice Bowman therefore made a new order in each of the appeals in
issue, setting dates for the examinations for discovery and the compliance with
undertakings for April 18, 2006, and May 15, 2006, respectively, at the latest.
[8] On March 23, 2006,
Counsel for the Respondent served the Appellant a notice to appear at an
examination for discovery to take place on April 4, 2006. The Appellant did
appear and the examination took place.
[9] On April 24, 2006,
counsel for the Respondent sent the Appellant, by mail, a list of 26
undertakings made by the Appellant arising from the examination for discovery.
The Appellant’s answers to undertakings were not received as of May 15, 2006,
the date set by order of this Court of March 16, 2006.
[10] By letter dated May
17, 2006, counsel for the Respondent notified the Appellant that she was in
breach of the Court’s order and that if the undertakings were not complied with
by May 31, 2006, at the latest, the Respondent would move to dismiss the
appeal. The Appellant sent counsel for the Respondent, by letter dated June 1,
2006, and received on June 5, 2006, her answers to the undertakings. Most of
the undertakings made by the Appellant were met, except for ten; in seven
cases, the Appellant said she could not answer because she did not have her
documents in her possession. She explained at the hearing of this motion that
her counsel still had her file, because she could not afford to pay his fees,
and therefore she did not have her file. Concerning the undertakings to obtain
information, the information was not supplied to the Respondent by the date of
hearing of this motion. Nor did the Appellant try to contact the Respondent in
any way.
[11] The Respondent
therefore asked the Court, by letter of June 15, 2006, to hold a case
management conference for the two appeals. In order to set a date for the case
management conference, the Court’s hearings coordinator tried to reach the
Appellant on June 20, 23 and 26, 2006, and on August 9, 2006, but to no avail.
[12] On August 10, 2006,
the Appellant, through her accountant, Michel Dumont, had a letter sent to
the Court’s hearings coordinator informing her that the Appellant agreed to
hold a case management conference. In this letter, Mr. Dumont informed the
hearings coordinator that he had obtained certain documents from the Caisse
populaire account for the period from January 1, 2002, to December 31, 2005,
and that the accounting would be complete in the following weeks. He informed
the coordinator that the employees’ vacations took place in July and August and
that he would be out of the country from September 6 to 25, 2006. He informed
the coordinator that they would be available, and I assume he was referring to
the Appellant and himself, starting in October. A copy of this letter was not
sent to the Respondent, and it was the coordinator who sent a copy of this
letter to counsel for the Respondent on August 15, 2006.
[13] On the date
scheduled for this hearing, September 11, 2006, the Appellant did not appear.
Nor did she provide any reason or excuse for not appearing, except that in the
hearing by telephone conference call, she explained that her state of health
had prevented her from appearing before the Court on that date. She had not
taken possession of her file from counsel and she could not say when she would
be able to meet her undertakings as specified in the letter sent by the
accountant to the hearings coordinator.
[14] In support of her
motion, the Respondent also filed an affidavit from Guy Savoie, an auditor
at the Canada Revenue Agency in Bathurst, New Brunswick. In this affidavit, Mr.
Savoie explained the difficulties encountered during the audit of the files of
Mrs. Cyr and her spouse. The affidavit explained how it was difficult to reach
the Appellant and obtain information from her. It reported the missed meetings
and the refusal by the Appellant and her spouse to answer and to produce
documentation supporting their claims. The poor excuses advanced and their lack
of cooperation in the entire audit process were very obvious.
[15] When she made her
submissions, the Appellant did not seem to understand the gravity of her action
and its potential consequences. She based her argument on the fact that an
assessment of her had already been vacated, and she didn’t understand why she
was subject to those that were being appealed from. This assertion was indeed
confirmed by Guy Savoie in his affidavit. He added that this vacated assessment
was at the origin of the one issued in this case under section 160 of the Income
Tax Act.
[16] The issue in these
two appeals is whether the Appellant is jointly and severally liable for her
spouse’s tax debts following the transfer of his property to the Appellant
while he was indebted to the Minister of National Revenue. That is the part
that the Appellant does not seem to understand.
[17] There is no doubt,
in my opinion, that the Appellant’s attitude towards the management of her
appeals is more based on her belief that she does not owe the Receiver General
due to her vacated assessment rather than on an intention to unduly delay
proceedings before this Court. It is true that she did not comply with the
orders of this Court setting time limits, but it must be acknowledged that she
nevertheless attended the examination for discovery and complied with a good
part of the undertakings she had made.
[18] She asked an
accountant to garner the documentation in question in order to meet her
undertakings and she did not have her file at hand to complete them. The time
passed since she made her undertakings should have been sufficient to allow the
Appellant to meet her last undertakings or to inform the Respondent that it was
impossible for her to do so. The Appellant gives an appearance of goodwill that
is concealed in large part by her lack of cooperation and, in particular, of
communication, as much with the Respondent as with the Court.
[19] It is worthwhile to
remind the Appellant that she is responsible for the prosecution of her
appeals. She must do it in compliance with the Rules and the orders of this
Court. She has a duty to take possession of her file, to meet the undertakings
she has made and to comply with the orders of this Court. In case of non-compliance
with the Rules or an order of this Court there must be reasonable grounds.
[20] The efforts made by
the Appellant and her misunderstanding of the process are in her favour.
However, I cannot ignore the inconveniences and expenses caused by the
Appellant’s inaction. I therefore order that the Appellant meet her
undertakings within 20 days following reception of these reasons or that she
explain to the Respondent why it is impossible to do so.
[21] The parties must
communicate in writing with the hearings coordinator by December 20, 2006, at
the latest in order to file a joint application to set a date and a place for
the hearing in accordance with section 123 of the Rules.
[22] As the motion is
granted in part, the Respondent is awarded costs in the fixed amount of $1,500.
This amount will have to be paid before December 20, 2006, failing which the
Respondent may inform the hearings coordinator and ask that the appeals be
dismissed.
Signed at Ottawa, Ontario, this 16th day of November 2006.
“François Angers”
on this 20th day
of February 2008.
François Brunet, Revisor
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