Groulx v. The Queen, docket 2001-215-GST-APP

Date: 20010404

Docket: 2001-215-GST-APP

BETWEEN:

LUIS GROULX,

Applicant,

and

HER MAJESTY THE QUEEN,

Respondent.

Reasons for Order

Lamarre Proulx, J.T.C.C.

[1]            This is a motion under section 304 of the Excise Tax Act ("the Act") to have the Court grant an application for an extension of the time for filing a notice of objection with the Minister of National Revenue ("the Minister").

[2]            On September 8, 1999, the Minister made against the applicant as a director of 2863-2230 Québec Inc. an assessment under section 323 of the Act for the net tax that that corporation ought to have paid. The assessment was filed as Exhibit R-1.

[3]            The applicant did not file a notice of objection with the Minister within the time set out in subsection 301(1.1) of the Act, which, according the parties, expired on December 7, 1999.

[4]            The notice of objection (Exhibit R-2) was filed with the Minister on April 18, 2000. The basis for the objection was that the applicant had never been a shareholder, director or officer of the aforementioned corporation.

[5]            On May 8, 2000, the applicant made an application to the Minister for an extension of time under section 303 of the Act (Exhibit R-3). The application was refused on December 21, 2000 (Exhibit R-4) on the ground that the applicant had not demonstrated that he had been unable to act or had intended to object within the time limit.

[6]            In his motion before this Court, the applicant referred to the application for an extension made to the Minister and argued that he was entitled to the requested extension because he had been unable to act or to give a mandate to act in his name although it was his intention to object to the assessment.

[7]            The applicant testified for himself. Manon Chamberland testified for the respondent.

[8]            The applicant repeated what was stated in the application for an extension of time he had made to the Minister, and in this regard I cite paragraphs 3 to 10 of that application (Exhibit R-3):

[TRANSLATION]

3.              In response to a demand dated August 11, 1998, for the filing of a return, the objector had served on the Minister by bailiff on October 5, 1998, a notice stating that he was not and had never been a director of the agent company, that he had not signed that company's declaration of registration, that the only director the company had ever had was John Fata, and that he was not in possession of the requested documents;

4.              Along with the said notice, the objector had served the questionnaire prepared by the Minister, which had been duly completed and signed;

5.              It is obvious that, since August 11, 1998, the objector has been contesting any liability for the collection and remittance of the excise tax, since he is not a director of 2863-2230 Québec Inc., which company is the only debtor along with its sole shareholder and director, the said John Fata, who has admitted this in a signed statement that was also sent to the Minister;

6.              Since that time, the objector has sent the requisitions for payment and the notices to the said John Fata, mistakenly believing that he had taken the matter in hand himself;

7.              The disputed notice of assessment was also sent to the said John Fata, and the objector was led to believe that the appropriate steps would be taken or the required payment made;

8.              The objector did not learn that the matter had not been settled until the Minister sent a requisition to his financial institution on February 7, 2000, and he again sent a copy of the requisition to the said John Fata, who did not see to it that it was settled, despite what he had said;

9.              The objector subsequently met with representatives of the Department's collection services, including Manon Chamberland with whom he discussed the case and to whom he reiterated his arguments;

10.            Until now, the objector has always mistakenly believed that the directors of 2863-2230 Québec Inc. would deal with the assessment themselves by settling it to the Minister's satisfaction or filing an objection within the proper time.

[9]            In his testimony, the applicant repeated that he called John Fata when he received the assessment and that Mr. Fata told him he would pay the debt. However, in February 2000, the applicant's bank account was seized. It was then that he filed a notice of objection, as stated above.

[10]          Manon Chamberland is a collection officer for the Minister. She said that, on March 31, 1998, Mr. Groulx filled out a questionnaire concerning his role as a director of 2863-2230 Québec Inc. On October 5, 1998, the applicant's lawyer sent a letter (Exhibit I-1) concerning the questionnaire to the head of the unfiled returns search unit. The letter reiterated that Luis Groulx had never been a director of 2863-2230 Québec Inc. and referred to an amending declaration executed by Mr. Fata on June 7, 1998, which was supposed to have been filed with the office of the Inspector General of Financial Institutions.

[11]          Ms. Chamberland said that the applicant contacted her on April 28, 1999, and told her that his lawyer would be in touch with her. Exhibit R-5 is a letter dated May 11, 1999, that was sent to Ms. Chamberland by the applicant. By May 18, 1999, she had still not received a call from the applicant's lawyer. The assessment was sent on September 8, 1999. On November 1, 1999, the applicant's lawyer called her for the first time.

Conclusion

[12]          Subsections 304(1) and (5) of the Act read as follows:

304(1) A person who has made an application under section 303 may apply to the Tax Court to have the application granted after either

(a)            the Minister has refused the application, or

(b)            ninety days have elapsed after service of the application under subsection 303(1) and the Minister has not notified the person of the Minister's decision,

but no application under this section may be made after the expiration of thirty days after the day the decision has been mailed to the person under subsection 303(5).

304(5) No application shall be granted under this section unless

(a)            the application was made under subsection 303(1) within one year after the expiration of the time otherwise limited by this Part for objecting or making a request under subsection 274(6), as the case may be; and

(b)            the person demonstrates that

(i)                    within the time otherwise limited by this Act for objecting,

(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 object to the assessment or make the request,

(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, and

(iii)           the application was made under subsection 303(1) as soon as circumstances permitted it to be made.

[13]          The evidence clearly showed that Mr. Groulx talked with his lawyer during the time for filing a notice of objection. The lawyer even called the Minister's official. It is clearly stated in the notice of assessment that the taxpayer had 90 days to file a notice of objection if he did not agree with the assessment. The reason the notice of objection was not filed was that the applicant did not wish to act or to give his lawyer a mandate to act in his name even though he was able to so act or to give such a mandate.

[14]          These circumstances are contrary to those the applicant must demonstrate under subparagraph 304(5)(b)(i) of the Act. The Minister's refusal of the application for an extension of the time for filing a notice of objection was therefore justified. The application to have that application granted is accordingly dismissed.

Signed at Ottawa, Canada, this 4th day of April 2001.

"Louise Lamarre Proulx"

J.T.C.C.

[OFFICIAL ENGLISH TRANSLATION]

2001-215(GST)APP

BETWEEN:

LUIS GROULX,

Applicant,

and

HER MAJESTY THE QUEEN,

Respondent.

Application heard on March 8, 2001, at Montreal, Quebec, by

the Honourable Judge Louise Lamarre Proulx

Appearances

Counsel for the Applicant:                                  Pierre-Louis Trudeau

Counsel for the Respondent:                                              Brigitte Landry

ORDER

                UPON application for an order extending the time within which may be served a notice of objection to an assessment made under the Excise Tax Act that bears the number PM0287 and is dated September 8, 1999;

                The application is dismissed in accordance with the attached Reasons for Order.

Signed at Ottawa, Canada, this 4th day of April 2001.

"Louise Lamarre Proulx"

J.T.C.C.

[OFFICIAL ENGLISH TRANSLATION]