Tansella v. The Queen, docket 98-535-IT-I (Informal Procedure)

Date: 20010611

Docket: 98-535-IT-I

BETWEEN:

PASQUALE TANSELLA,

Appellant,

and

HER MAJESTY THE QUEEN,

Respondent.

Reasons for Judgment

Taylor, D.J.T.C.C.

[1]            This is an appeal against a reassessment under the Income Tax Act struck by the Respondent for the taxation year 1995, the notice of reassessment for which dated September 8, 1997 concluded with the line "balance due debit $10,352.05". The calculations thereon, taken for the year 1995 standing by itself, resulted in a credit in favour of the Appellant of $1,293.31. That had been transformed into the above debit amount by the addition, on the notice of reassessment, of a line simply stating "previous account balance debit $11,645.36". The matter was brought before the Court for the first time, on June 9, 1999, and the transcript of that hearing shows that the presiding judge was well aware of the legislative and judicial restrictions on this Court, mandating that it could only deal with an appeal from a specific taxation year - in this case - 1995. I quote from that transcript "don't forget this is an appeal from an assessment of tax. It is not an appeal from a calculation of what is owed". And "I am having trouble with the question, how you can raise the question of the liability for 1990 -- in an appeal from an assessment for a subsequent year", and "if I have jurisdiction to entertain something that is troubling you in this appeal from 1995, fine, but I don't think I do".

[2]            At the same time, the judge was very conscious of the dilemma that seemed to face the Appellant. The agent for the Appellant put the issue in these terms:

"The unfortunate thing, Your Honour, is that the Notice of Reassessment comes bundled together with arrears interest, refund interest and besides the balance from this reassessment, a previous account balance, and it demands payment, and there were statements issued to his employer to garnishee his wages for this amount of which he had no recourse. He could do nothing about it."

[3]            Counsel for the Respondent later noted for the Court:

"Your Honour, Revenue has provided Mr. Trentadue, and I myself have spent a number of hours trying to reconcile the previous account balance to him and in our view, in Revenue's view, there is no amount that is not accounted for on the previous account balance, but what has been provided to him this morning was, and it was scheduled to meet earlier, but what was presented this morning was an 18-page account posting which -- and Revenue went through that with Mr. Trentadue showing the balance for each year and where they come from and where they go and in our view, we have tried to resolve the matter.

...

Every year that's been assessed has been reassessed and then there's been an objection and an appeal.

                So it's created sort of a fluctuating previous account balance as the amounts go in and out of the dispute, and that has caused some of the problems in terms of the previous account balance, but the document as provided, which is a certified true copy of the computer records that Revenue has of all account postings, shows which amounts were in dispute and which amounts weren't in dispute. In our opinion, it balances out and we have tried to explain it to him."

To which the Judge responded:

"Maybe you got it right; maybe you didn't."

[4]            Reaching the opinion that he had heard no evidence and therefor was not seized with the case the Judge concluded by "--I am leaving this appeal for trial at a later date in order that I don't foreclose relief that might be available - -. - -It gives you a basis on which to hold further talks with Revenue, and perhaps try and straighten the matter out".

[5]            The case was listed for trial, for the second time before me on October 20, 1999 and opened with the following statement by counsel for the Respondent:

"Your Honour, the respondent wishes to bring a motion to have this appeal dismissed on the basis that the court - - the Honourable Tax Court - - this is not a matter that should be before the Honourable Tax Court. This is a matter over which the Tax Court has no jurisdiction; and moreover, there's no issue of a tax assessment, which is in issue; and the remedy sought is also something which is not within the jurisdiction of the Tax Court. In particular, because they wish a declaration, which is a remedy which is not provided for by the Income Tax Act."

Counsel provided the Court, with case law supportive of that motion.

[6]            In reply the agent for the Appellant put forward:

                "So we're faced with the fact of having to appeal from a notice of reassessment, and the only assessment where that amount comes from is the 1995 year. That's why we're here. Otherwise, if we had known it was a 1990 reassessment, we could have come here with a reassessment, and certainly this issue could have been behind us, because it's a simple issue.

                Even more fundamental though is that the Minister wants my client to pay an amount which he has not reassessed or assessed, nor can they prove where this amount come from, other than from this notice of reassessment."

[7]            After further discussions with the parties, which essentially went over the same ground covered in the first hearing, I found myself as equally reluctant as the judge in that hearing to dismiss the appeal, although there seemed little other ultimate result available. However some further information had been provided, particularly that there were probably additional assessments and reassessments - subsequent to the date of September 8, 1997 - and that these could result in changes to the basic notice of reassessment of that date, now filed with the Court. The hearing concluded:

"... I will return to this when there is a new assessment up-to-date, which takes into account the various matters which Ms. Rashid has commented on.

                I am sure this has been just as troublesome a situation for her as it has been for you, other than that you owe the money, that is a little different.

                So I want the thing brought up-to-date. I want you to see what the Minister's position is now. That may result in an opportunity for some kind of discussion with Revenue Canada. It may open some door.

                At the moment, Mr. Trentadue, my options are pretty limited. I have told you what they are. Dismiss it or allow the Minister's motion. I am not going to make a decision on the Minister's motion until there is a new - - and I use the word "statement of account", because I do not know what form the Minister is going to put it in, or an assessment up-to-date which deals with things up to 1995."

[8]            The matter was brought to my attention again, after it had been listed for hearing once more before a third judge on December 4, 2000. That judge quickly determined that the "statement of account" requested in the second hearing (above) had been provided to the Appellant and to the Court by letter dated August 1, 2000. The judge then quite properly decided to adjourn that hearing and communicate the current state of affairs to me. In the result the Chief Judge of the Tax Court, assigned to me the role of now disposing of the matter.

[9]            I believe it can be said that the Tax Court has been exceedingly generous in time and effort to leave room for settlement of this matter. I am sure it has been a frustrating and drawn out process for both the Respondent and the Appellant, and perhaps more disconcerting than enlightening on occasions. The specific distinctions to be made among "assessment", "reassessment", "notice of assessment" and again "statement of account" or "demand for payment" may be clear to those involved with the process on a daily basis. However, such lines of demarcation are certainly less distinct for those - the vast majority of taxpayers - that are mandated to deal with these elements on an irregular, perhaps once in a lifetime basis. It behoves all of us on the more informed side of such discussions to remain alert to the tenuous nature of the grasp of these matters held by those most directly affected by the reality and legality. In this particular appeal, it might even warrant reconsideration of the practice of including in a "notice of assessment" an item entitled "previous balance due". It is not surprising that the Appellant was taken back by the final balance owing amount. Little satisfaction could be gained by him from any effort by the Respondent to assure him that every thing reasonable had been done to verify the amount and explain the situation to him.

[10]          Considering the thoughts expressed above, while it seemed a hopeless task, I reviewed in detail everything that was available to see if it could shed any light on the basic complaint of the Appellant - essentially that he had not received any satisfactory information to support the "previous account balance of $11,645.36", and "that he did not owe that amount, because errors had been made in the assessments and reassessments dealing with the year 1990". This review took into account the copies of the reassessments filed, the notice of appeal, the reply to notice of appeal including the statement of account attached thereto (statement "A"), the transcript of the court hearings and finally the second "statement of account" (statement "B") filed with the letter from the Respondent dated August 1, 2000. These "statements of account" in part covered the same time frame - Statement "A" - from May 23, 1990 through April 29, 1998; statement "B" from March 17, 1994 through May 01, 2000. The exercise was time consuming, and in the interest of brevity I will only highlight some of the items of interest. I do note for the record that I have serious reservations that it is the role of the Court to make such a detailed analysis on such a seemingly simple point. But under the circumstances of this appeal it seemed the proper approach to take in an effort to finalize the matter.

(1)            As of July 15, 1992, statement "A" shows a balance owing of $.00.

(2)            As of March 17, 1994, both statements show a balance owing of $4,019.83.

(3)            During the early years refunds as follows were paid to the Appellant:

Taxation years                       Amount                                  Date Paid

1989                                                         $1,458.45                                                 May 23, 1990

1990 (1st assessment)          4,706.84                                  July 24, 1991

1991                                                            853.91                                   July 15, 1992

                                                $7,019.20

(4)            There are some differences in the amounts recorded in statements "A" and "B". I do not categorize these as discrepancies, since they appear to relate largely to different interest amounts charged at different times. But as at July 27, 1995 both of these statements assert that the balance owing was $10, 406.07, and these balances stay the same on both statements up until September 29, 1997 at $10,420.22.

(5)            The assessments and reassessments over much of this period are as follows:

Taxation year                                                         Year assessed or reassessed

1990                                                                                         1991, 1993, 1994, 1996

1991                                                                                         1992

1992                                                                                         1994

1993                                                                                         1994, 1995, 1998*

1994                                                                                         1995, 1995, 1997, 1998*

1995                                                                                         1996, 1997

1996                                                                                         1997, 1997

*Assumed to be reassessments - no details provided.

(6)            After September 29, 1997 statement "A" continues and simply ends - April 29, 1998 current balance $1,620.53.

(7)            For statement "B" the result is:

July 27, 2000                                           current balance                                      $2,322.73

[11]          Leaving aside some other points arising out of this analysis, which in themselves could raise questions, it is fair to say that the Appellant's contentions of the lack of clarity and explanations might be warranted to some degree. Looking at the plethora of assessments and reassessments - even if they arose in some cases from objections filed on his behalf - nevertheless could lead to some confusion and uncertainty. However the bottom line for the Court, arising out of the October 20, 1999 hearing is the determination of the motion to dismiss filed by the Respondent and the disposition of the appeal on file. I have taken into account the fact that certain documents were filed with the Court by the Appellant at the hearing of October 20, 1999, with the concurrence of the Respondent, in dealing with this as an appeal. Even after the extensive examination of the matter noted above, there is nothing to support the Appellant's contention that the amount of $11,645.36 was improperly shown as owing by him as of the date of the notice of reassessment September 8, 1997. Indeed it is evident that further adjustments to that amount were made after that date. The Respondent has provided these and the balance owing as of July 27, 2000 is considerably less, $2,322.73, according to the most recent "statement of account".

[12]          Ultimately however, the real responsibility rests with the Appellant and even after two lengthy delays, resulting from the first and second hearings, and the provision of further detailed and updated information from the Respondent, he has done nothing, himself, of substance to provide further evidence to support his contentions. I found nothing to demonstrate errors or impropriety in the assessments directly related to the year 1990 or even subsequent years which could mitigate the balance shown as due on the September 8, 1997 Notice of Reassessment. Confusion, difficulties, delays and uncertainty there may have been all of which extended over many years. However neither any or all of that can serve to invalidate the assessments over that period of time in my view. I make no further effort to determine the exact liability for "balance due", at this time. That remains for the parties to settle, if it differs from the latest amount of $2,322.73, otherwise it is the latest calculated amount otherwise it is the Appellant's responsibility, as I see it.

[13]          The appeal is dismissed.

Signed at Ottawa, Canada, this 11th day of June 2001.

"D.E. Taylor"

D.J.T.C.C.

COURT FILE NO.:                                                 98-535(IT)I

STYLE OF CAUSE:                                               Pasquale Tansella and H.M.Q.

PLACE OF HEARING:                                         Toronto, Ontario

DATE OF HEARING:                                           October 20, 1999

REASONS FOR JUDGMENT BY:      The Honourable Deputy Judge D.E. Taylor

DATE OF JUDGMENT:                                       June 11, 2001

APPEARANCES:

For the Appellant:                                                 Joseph A. Trentadue

Counsel for the Respondent:              Shaheem Rashid

COUNSEL OF RECORD:

For the Appellant:                

Name:                     

Firm:                       

For the Respondent:                             Morris Rosenberg

                                                                                Deputy Attorney General of Canada

                                                                                                Ottawa, Canada

98-535(IT)I

BETWEEN:

PASQUALE TANSELLA,

Appellant,

and

HER MAJESTY THE QUEEN,

Respondent.

Appeal heard on October 20, 1999 at Toronto, Ontario, by

the Honourable Deputy Judge D.E. Taylor

Appearances

Agent for the Appellant:                       Joseph A. Trentadue

Counsel for the Respondent:                Shaheem Rashid

JUDGMENT

          The appeal from the assessment under the Income Tax Act for the 1995 taxation year is dismissed in accordance with the attached Reasons for Judgment.

Signed at Ottawa, Canada, this 11th day of June 2001.

"D.E. Taylor"

D.J.T.C.C.