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Citation: 2004TCC714
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Date: 20041213
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Docket: 2004-3189(IT)APP
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BETWEEN:
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RENÉ ARCHAMBAULT,
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Applicant,
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and
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HER MAJESTY THE QUEEN,
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Respondent.
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[OFFICIAL ENGLISH TRANSLATION]
REASONS FOR ORDER
Bédard J.
[1] This is an application under
subsection 167(5) of the Income Tax Act
("the ITA") for an order extending the time within
which the applicant may institute an appeal from the decision of
the Minister of National Revenue ("the Minister").
The Court must determine whether the application for an extension
of the time to appeal, with respect to the 1989, 1990, 1991 and
1992 taxation years, is well-founded.
[2] The Minister sent notices of
reassessment to the applicant on June 28, 1993, with
respect to the 1989 taxation year; June 6, 1994, with
respect to the 1990 taxation year; and April 19, 1995,
with respect to the 1991 and 1992 taxation years.
[3] The applicant served his
objections to the reassessments on the Minister on
August 30, 1993, with respect to the 1989 taxation year;
July 15, 1994, with respect to the 1990
taxation year; and May 24, 1995, with respect to
the 1991 and 1992 taxation years.
[4] By registered letter mailed on
September 25, 2003, the Minister notified the applicant
that he was ratifying the reassessments dated
June 28, 1993, with respect to the 1989 taxation year;
June 6, 1994, with respect to the 1990 taxation
year; and April 19, 1995, with respect to the 1991 and
1992 taxation years.
[5] The applicant did not commence an
appeal to the Court within the prescribed time. That time expired
on December 24, 2003, because the reassessments dated
June 28, 1993, with respect to the 1989 taxation
year; June 6, 1994, with respect to the 1990 taxation
year; and April 19, 1995, with respect to the 1991 and
1992 taxation years, were all ratified on
September 25, 2003.
[6] On July 28, 2004, the
applicant filed with the Court an application to extend the time
for instituting an appeal concerning the reassessments of
June 28, 1993, with respect to the 1989 taxation year;
June 6, 1994, with respect to the 1990 taxation year; and
April 19, 1995, with respect to the 1991 and 1992 taxation
years.
Analysis
[7] The applicant is an engineer
specialized in the resolution of sound and vibration problems. He
was self-employed.
[8] The applicant testified that he
received, read and understood the Minister's letter, dated
September 25, 2003 (Exhibit I-1), and sent
him that day by registered mail. The letter ratified the
reassessments of the applicant. It should be noted that the
Minister attached to that letter a document setting out the
appeal procedure that a taxpayer must follow if he disagrees with
the Minister's decision and wishes to appeal that decision to
the Court.
[9] The applicant testified that he
met with his accountant Germain Dubuc on
October 25, 2003. He explained that he gave
Mr. Dubuc a series of documents, including the letter of
September 25, 2003, at that meeting. He emphasized
that he did not discuss this letter with Mr. Dubuc at the
meeting; rather, he discussed other accounting and tax topics
related to his business. The applicant admitted that he did
not mandate Mr. Dubuc to appeal the Minister's decision
dated September 25, 2003. The applicant believed that
Mr. Dubuc would follow up on the letter he was handed, since
he had settled the same matters with the provincial authorities
some years earlier.
[10] Mr. Dubuc testified that he did
receive the letter dated September 25, 2003, from the
applicant, but that the applicant did not mandate him to appeal
the Minister's decision. He explained that he never paid any
special attention to the letter, and that the letter was not
discussed with the applicant at any point prior to late
February 2004. He believed the applicant's lawyers had
the mandate to appeal the Minister's decision dated
September 25, 2004, because they had represented the
applicant in the same matter for previous taxation years.
[11] The applicant admitted that, toward
late February or early March 2004, he realized he had
not commenced an appeal within the allotted time. He came to this
realization following conversations with lawyer Nader Khalil and
with Douglas Atherton, one of the coordinators of a group of
investors that participated in the research and development
projects in which the applicant was involved. The applicant
testified that he then had telephone conversations on the subject
with Denis Pépin, an employee of this Court, and with
Mr. Lemire of the Canada Customs and Revenue Agency. He
admitted that he then received model originating documents for
appeals.
[12] The applicant testified that he
prepared the application for an extension of time to appeal
himself, and then sent the application to Mr. Khalil in
early February 2004 so that he could revise it, prepare the
Notice of Appeal and file it in the Court. The applicant
explained that he did not have the time to do this until early
June because he is a very busy entrepreneur. Indeed, he had to be
away on business for the entire month of April 2004.
Moreover, he was ill for almost the entire month of
May 2004.
[13] Did the applicant comply with
subsection 167(5) of the ITA, and is he entitled to an
extension of the time for filing his notices of appeal?
Subsection 167(5) of the ITA reads as follows:
167 (5) No order shall be made under this section unless
(a) the application is made within one year after the
expiration of the time limited by section 169 for appealing;
and
(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.
[14] The time limited by section 169
for appealing expired on December 24, 2003. The
applicant filed his application for an extension of time on
July 28, 2004. Thus, the application was made within
one year after the expiration of the time limited by
section 169 of the ITA for appealing. Consequently, the
applicant complied with paragraph 167(5)(a) of the
ITA.
[15] Before granting an extension of the
time for appealing, the Court must be satisfied that, within the
time for appealing (in this instance by
December 24, 2003), the applicant was unable to act or
instruct another to act in his name, or had a bona fide intention
to appeal. These two conditions in clauses 167(5)(b)(i)(A)
and (B) are alternative.
[16] In the instant case, the burden is on
the applicant to establish, on a balance of probabilities, that
he intended to appeal before December 24, 2003.
[17] The applicant, who needed to show that
he intended to appeal within the allotted time, adduced evidence
that relied on his testimony and that of Mr. Dubuc.
Specifically, he tried to show that there was a misunderstanding
with Mr. Dubuc, who claimed he never received a mandate to
institute an appeal, whereas the applicant believed that by
handing him the letter of September 25, he implicitly
mandated him to appeal the Minister's decision.
This explanation strikes me as unlikely. The appellant
testified that the amounts in issue added up to roughly $100,000
and that he would go bankrupt if he had to pay that sum.
Since this was a life-or-death situation for the
applicant, I cannot fathom how he never specifically discussed
the Minister's decision with Mr. Dubuc within the time
for appealing. It also strikes me as unlikely that
Mr. Dubuc, who admitted that he received the letter dated
September 25, 2003, did not contact the applicant to
find out, at the very least, why the applicant gave him the
letter. It should be emphasized that the applicant never followed
up on the matter with Mr. Dubuc within the time for
appealing. As mentioned, the applicant had to show, on a balance
of probabilities, that he intended to appeal before
December 24, 2004. In my opinion, the applicant has not
discharged this onus by adducing this evidence.
[18] Was the application for an extension of
time made as soon as circumstances permitted? The evidence
disclosed beyond any doubt that the applicant knew in early
March 2003 that the time for appealing had elapsed and that
he could apply for an extension. What is more, the evidence
disclosed that he knew how to institute an appeal, as he was
given sample originating documents. I have trouble understanding
why the application was filed in Court seven months after the
expiration of the time to appeal. This lengthy delay can only be
explained by the applicant's carelessness and lack of
diligence. He attempted to explain this lengthy delay as
follows:
(i) he had to be away from
Canada in April 2004 in order to complete a job at a
military base in Europe; and
(ii) he was ill for the first three
weeks of May.
[19] I certainly understand why he could not
act during the first three weeks of May 2004. But why did he
not act throughout March 2004? If he was so busy in
April 2004, why did he not instruct someone to act in his
name? He claimed that he gave Mr. Khalil the application to
extend the time in early June 2004 so that Mr. Khalil
could attach the notice of appeal and file everything in Court.
It is very difficult for me to understand why two months elapsed
before the instant application for an extension was filed in
Court. Once again, the applicant did not follow up with
Mr. Khalil. The applicant admitted that he could not account
for this additional two-month delay.
[20] The evidence disclosed no special
circumstances that could have justified such a delay, except
perhaps the applicant's illness during the first three weeks of
May. However busy he may be, a taxpayer must exercise diligence.
If he is so busy, it is my opinion that he must instruct someone
to act in his name and follow up on the matter with that person.
The applicant did none of this. The evidence clearly
established his carelessness and lack of diligence.
[21] For these reasons, I dismiss the
application for an extension of time.
Signed at Ottawa, Canada, this 13th day of December 2004.
Bédard J.
Translation certified true
on this 14th day of February 2005
Jacques Deschênes, Translator
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