Citation: 2015 TCC 44
Date: 20150220
Docket: 2014-3370(IT)APP
BETWEEN:
UFUOMA
ODEBALA-FREGENE,
Applicant,
and
HER
MAJESTY THE QUEEN,
Respondent.
REASONS
FOR ORDER
Lyons J.
[1]
Ufuoma Odebala-Fregene, the applicant, brought an
application for an extension of time to serve a notice of objection (the
“Objection”) on the Minister of National Revenue for the 2009 and 2010 taxation
years. The application was filed with the Court on September 2, 2014.
[2]
On November 5, 2014, the applicant filed an amended
application abandoning the application for 2009 and requesting that the
application for only the 2010 taxation year (the “Application”) proceed.
[3]
On November 18, 2014, the respondent filed with
the Court a Reply opposing the Application because the application to the
Minister requesting an extension of time to object was not made within one year
after the expiration of the time otherwise limited by the Income Tax Act
(the "Act") for serving a notice of objection as required by
paragraph 166.1(7)(a).
[4]
According to the Amended Affidavit, sworn by an
officer of the Canada Revenue Agency ("CRA") and filed in support of
the Reply, the Minister mailed a reassessment on February 24, 2012 and mailed the
last reassessment on April 16, 2012 relating to the 2010 taxation year.
One year after the last day (namely, the 90th day having expired on
July 16, 2012) for serving a notice of objection to the April 16, 2012 reassessment
was July 16, 2013.
[5]
The applicant testified that it was not possible
to serve a notice of objection or an application within the time limits because
she was not aware that she could object until she was contacted by a CRA
collections officer. Upon discovering that, she immediately served the
Objection on the Minister on May 9, 2014. It was attached to the
Application and states:
I am filing this
formal notice of objection outside of the window allowed because I only became
aware that a formal notice of objection could be made on April 15, 2014.
[6]
The Minister notified the applicant, by letter
dated June 5, 2014 and filed as Exhibit A-5, that the Objection was treated as an
application for an extension of time to object under section 166.1. However, the
application was denied because it was outside the statutory time limit.
[7]
The background as to the applicant’s dispute
with the Minister centres on the availability of the Canadian foreign tax
credit (the “FTC”). She emigrated to Canada in 2007 to join her husband but continued
to be employed with the Human Rights Commission in the United Kingdom up to July 2010 earning foreign source employment income. She received a letter from
the CRA informing her that it was reviewing her 2010 Income Tax and Benefit
Return and was seeking further information.[1]
She claims the FTC was disallowed by the CRA despite it having been provided
with Form P45 from HM Revenue & Customs. However, the evidence shows that the
CRA sought and continued to seek clarification up to April 5, 2012 relating to
the FTC.[2]
[8]
Despite the applicant’s acknowledgment that the
application to the Minister was beyond the statutory time limit under the Act,
her position is that the common law duty of “procedural fairness” – as a
fundamental complement of administrative law – trumps the statutory provisions
involving the time limit. As an arm of government, the CRA is subject to
that duty which is imposed irrespective of the statutory provisions relating to
the time limits and the CRA failed to discharge that duty.[3]
[9]
I disagree with the applicant's position. The
common law duty does not override the objections process under the Act. The
objections process is governed by a mandatory statutory regime setting out
strict time limits for filing objections and applications to extend time in
instances where an objection is late filed.
[10]
The relevant provision in this application is paragraph
166.2(5)(a) of the Act which reads:
(5) No application
shall be granted under this section unless
(a) the
application was made under subsection 166.1(1) within one year after the
expiration of the time otherwise limited by this Act for serving a notice of
objection or making a request, as the case may be;
[11]
The language is clear. The requirements are
strict. The time limit cannot be waived. An extension of time to file a notice
of objection cannot be granted unless the application is made within one after
the expiration of the time for serving an objection or making a request under
the Act. These principles have been consistently noted at the appellate
level and applied by this Court.
[12]
In Carlson v Canada, 2002 FCA 145, 2002
DTC 6893 (FCA), the Federal Court of Appeal noted at paragraphs 12 and
13 that one year and 90 days from the date of mailing the reassessment is
absolute and cannot be waived.
[13]
In Edgelow v The Queen, 2011 TCC 255,
2011 DTC 1192, V. Miller J. had to deny the application in circumstances where
the application was one day late noting that she had no discretion to extend
the time.
[14]
The applicant’s submission that upon discovering
the objections process she immediately filed the Objection, is based on the
discoverability doctrine. The doctrine was accepted in Hickerty v Her
Majesty the Queen, 2007 TCC 482, 2007 DTC 1311, rejected in Chu v Canada,
2009 TCC 444, [2010] 2 CTC 2326, and disavowed by the Federal Court of Appeal in
Carlson.
[15]
In the Hickerty decision, it was applied
in circumstances where the starting time in determining the expiry of an
applicant's deadline would not commence 90 days after the date of mailing
of the notice of assessment because she was under a reasonable but "mistaken
apprehension" that an appeal had been validly instituted by sending it to
the CRA instead of the Court. The Court distinguished the decision in Carlson
on the basis that the delay in Hickerty was only a few months, whereas
the delay in Carlson was several years.
[16]
In the Chu decision, Hershfield J.
noted, at paragraph 26, that in his view no such distinction - a little late as
opposed to very late - is warranted in adopting an approach to the subject
provision. In that case, he concluded that the statutory language is clear, he
has no jurisdiction and notes at paragraph 27 that:
27 There is a
bright line, a bright timeline here that Parliament says must be observed.
Acting diligently to rectify a problem upon learning of it, does not change
that bright line. Being in the dark, at no fault of your own, that a clock is
ticking, does not change that bright line.
[17]
I agree with the approach in the Chu decision that the doctrine of discoverability does not apply, as found in Carlson.
[18]
Respondent counsel submitted that the
applicant’s testimony that she could not recall receiving the April 16, 2012
reassessment is questionable given that all the documents up to the Objection
referred to a charitable donation and it was omitted from the Objection because
it had been allowed in the April reassessment.
[19]
It is well established in the jurisprudence that
mailing by the Minister of the reassessment, not receipt by a taxpayer, is all
that is required. The Amended Affidavit indicates it was mailed on that date. The
address shown on the February 24, 2012 reassessment is the same address used by
the applicant on her Objection which was sent almost one month after the date
of the April reassessment. I infer and find that the Minister mailed the April
reassessment to the applicant at her last known address.[4] I also accept the submission
by respondent counsel which is supported by the evidence.
[20]
In the present case, the Minister mailed the April
16, 2012 reassessment to the applicant. She had until July 16, 2012
(90 days from mailing) to file an objection.[5] The applicant served the
Minister with the Objection on May 9, 2014 (which was treated as an application
to extend time under section 166.1). At that point, however, the applicant was
beyond the one-year deadline of July 16, 2013. Consequently, the Court does not
have the discretion or ability to grant the Application to extend time to
object with respect to the 2010 taxation year.
[21]
Turning to the applicant’s reliance on the
comments at paragraph 42 of the Supreme Court of Canada decision in Canada (Attorney
General) v Mavi, 2011 SCC 30, [2011] 2 S.C.R. 504, she asserts that while
the Court should give deference to the CRA, it should not be to the detriment
of the overarching requirement of fairness.
[22]
Factoring in the nature of the specialized
statutory scheme of the Act and that this Court is a statutory Court,
considerations of fairness do not apply. In his submission, respondent counsel referred
to the Federal Court of Appeal in Chaya v Canada, 2004 FCA 327, 2004 DTC
6676 (FCA), which noted that such grounds are not within the power of this
Court. In paragraph 4 of the decision, Rothstein JA, as he then was stated:
4 … It is not
open to the Court to make exceptions to statutory provisions on the grounds of
fairness or equity. If the applicant considers the law unfair, his remedy is
with Parliament, not with the Court.
[23]
Although her submission was not entirely clear,
the applicant suggested that her combined reading of section 18.1 of the Tax
Court of Canada Rules (Informal Procedure), subsection 152(4.2) of the Act
and her understanding of Exhibit A-6 (April 5, 2012 letter) would enable her to
ask for a reassessment which can be done anytime in the last ten years. Those
provisions have no bearing on this Application and the consideration of whether
statutory time limits were met and are not applicable in the applicant's
situation. Exhibit A-6 is a response from the CRA to the applicant relating to
a request that she had made for an adjustment for 2009 which indicates that
because she did not provide all the documents requested by the CRA, her request
for an adjustment relating to the FTC for 2009 was rejected. Again, this has no
bearing on the Application.
[24]
For all the above reasons, the Application is
dismissed. Each party shall bear their own costs.
Signed at Vancouver, British Columbia, this
20th day of February 2015.
"K. Lyons"
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