Skowron v. The Queen, docket APP-307-98-IT

Date: 19990217

Docket: APP-307-98-IT

BETWEEN:

ALFRED SKOWRON,

Applicant,

and

HER MAJESTY THE QUEEN,

Respondent.

Reasons for order

Sarchuk, J.T.C.C.

[1] This is an application by Alfred Skowron (the Applicant) for an Order extending the time within which he may file a Notice of Appeal in respect of the 1991, 1992, 1993 and 1994 taxation years with the Tax Court of Canada.[1]

[2] Since 1977, the Applicant has operated his business, Foresight Enterprises, which buys and sells various goods. Foresight, and as a result the Applicant, suffered losses in respect of the 1989 and 1990 taxation years, respectively. For the 1991, 1993 and 1994 taxation years, the Applicant reported a profit from Foresight and carried forward the losses claimed in the 1989 taxation year. For the 1992 taxation year, the Applicant reported a business loss from the operation of Foresight. On December 4, 1995, the Minister reassessed the Applicant in respect of his 1993 and 1994 taxation years, accepting his net business income as filed, but disallowing the loss carried forward on the basis that the loss had not been established. On May 9, 1996, the Minister reassessed the Applicant in respect of his 1991 taxation year on the same basis. On that same date, the Minister disallowed the business loss claimed for the 1992 taxation year on the grounds that the Applicant's financial records were insufficient to establish the amount of the loss claimed.

[3] The Applicant through his accountant duly filed notices of objection to the reassessments. On October 22, 1997, the reassessments were confirmed by the Minister. The 90-day period for the filing of Notices of Appeal expired on January 20, 1998.

[4] Upon receiving the confirmation, the Applicant discussed the matter with his accountant, Charles Weppler, and the possibility of filing an appeal. The accountant arranged a meeting with counsel, Mr. Frank Lavitt, of the firm Aikins, MacAulay & Thorvaldson. The Applicant met with Weppler and Lavitt on three occasions, the final meeting being on January 11, 1998. An appeal was discussed and the Applicant was advised that a retainer in the amount of $5,000 would be required in order to engage the services of a solicitor for the appeal. It was his testimony that at the time of the meeting and for several months thereafter, he was unable to commence an appeal because his financial circumstances precluded the payment of any retainer in virtually any amount. His testimony was that his lines of credit at the lending institutions with whom he had dealt for many years had been used to their limit and that he was in no position to obtain funds from any other source. In or about July 1998, his wife was able to borrow funds in an amount sufficient to assist him in commencing these proceedings. The requisite application for an extension of time and the supporting affidavit were dated and filed with the Court on July 31, 1998.

[5] The Minister's position is essentially that the Applicant has not demonstrated that within the time otherwise limited by the Act for serving such an appeal, he was unable to act or instruct another to act in his name and furthermore, that he has not demonstrated that he had a bona fide intention to appeal, both as required by subparagraph 167(5)(i) of the Act.

[6] The testimony of the Applicant has satisfied me that throughout the period of the time otherwise limited by the Act for serving such an appeal, he had a bona fide intention to appeal. I further accept his testimony regarding the financial difficulties he had encountered and his continuing efforts to obtain sufficient funds to provide Counsel with his retainer. While it might be argued that he ought to have filed personally, I do not view his failure to do so given the complex nature of the issues to be determined sufficient to deprive him the right of having his appeal heard and determined by the Court. Last, I am satisfied that the application was made as soon as circumstances permitted. Accordingly, the time within which an appeal may be instituted with respect to the 1991, 1992, 1993 and 1994 taxation years is extended to the date of herein and the appeal filed August 17, 1998 is deemed to be a valid appeal.

Signed at Ottawa, Canada, this 17th day of February, 1999.

"A.A. Sarchuk"

J.T.C.C.