Before:
The Honourable Justice Johanne D’Auray
Appearances:
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Counsel for the Appellant:
|
Laurent Tessier
Jean-François
Poulin
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Counsel
for the Respondent:
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Benoît Denis
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ORDER
UPON the appellant's oral motion at the hearing for leave
of the Court to file an amended amended notice of appeal;
AND after hearing the parties' submissions;
THIS COURT ALLOWS the appellant to amend the amended
notice of appeal, the amended amended notice of appeal being deemed to have
been filed with this Court on the date of the present order, and ORDERS:
The appellant shall serve the amended amended notice of
appeal on the respondent, and the respondent shall have 60 days after being
served with the amended amended notice of appeal to file a reply to the amended
amended notice of appeal.
The appellant shall pay the respondent costs of $700,
regardless of the outcome of the appeal.
The hearing scheduled for April 29, 2014 is adjourned.
The appeal shall be set down for hearing on Monday,
October 20, 2014, at 9:30 a.m., for a duration of five days, before the Tax
Court of Canada, at 30 McGill Street, Montreal, Quebec.
Signed at Ottawa, Canada, this 26th day of May 2014.
"Johanne
D’Auray"
Translation
certified true
on this 1st day of
December 2014.
Erich Klein,
Revisor
REASONS
FOR ORDER
D’Auray J.
[1]
Before the hearing of the appeal began, the
appellant presented an oral motion for leave of the Court to file an amended
amended notice of appeal.
[2]
The respondent is not contesting the amendments
the appellant identified in his amended amended notice of appeal, except for
the addition of paragraph 8.1 of the amended amended notice of appeal, which
states the following:
[translation]
Every month and at the time his GST/QST return was filed,
the appellant submitted form VDZ-350.49-V, "Subcontracting Expenses
Information Return: Clothing Industry", to the ARQ as required by the ARQ,
and identified all the subcontractors with which he did business.
[3]
According to the respondent, form VDZ-350.49-V, Subcontracting
Expenses Information Return: Clothing Industry (the form) must be submitted
with the Quebec sales tax (QST) return and not with the goods and services tax
(GST) return. Thus, for GST purposes, this form is not relevant. Consequently,
the respondent argued that I must not allow this amendment.
[4]
The rule regarding amendments is section
54 of the Tax Court of Canada Rules (General Procedure). Section 54
states the following:
A pleading may be
amended by the party filing it, at any time before the close of pleadings, and
thereafter either on filing the consent of all other parties, or with leave of
the Court, and the Court in granting leave may impose such terms as are just.
[5]
The courts have generally given a broad
interpretation to the rules regarding amendments. Thus, in Canderel Ltd. v.
Canada, [1994] 1 F.C. 3, Justice Décary, in a unanimous decision of the
Federal Court of Appeal, stated the following general rule regarding
amendments:
. . . the general rule is that an amendment should be allowed at any
stage of an action for the purpose of determining the real questions in
controversy between the parties, provided, notably, that the allowance would
not result in an injustice to the other party not capable of being compensated
by an award of costs and that it would serve the interests of justice. . . .
[6]
An amendment should therefore be allowed as long
as it would not result in an injustice to the other party not capable of being
compensated by an award of costs. The amendment must also serve the interests
of justice.
[7]
The respondent in the present case does not
allege that she would suffer an injustice not capable of being compensated by
an award of costs. Rather, she argues that the form attached to the QST return
is simply not relevant for GST purposes.
[8]
In my opinion, the issue is more complex than it
may first appear. It is clear that the forms attached to the QST return are
only required for QST purposes, and not for GST purposes. Therefore, the forms
themselves are not relevant for GST purposes.
[9]
However, a pragmatic approach is needed. The
appellant, as a registrant, files his GST and QST returns with the Agence du
Revenu du Québec (ARQ) together. The form identifying the subcontractors is
attached to the QST return. The ARQ auditor administers the two taxes together.
It is therefore very possible that the auditor would use for GST purposes the
information on the form attached to the QST return.
[10]
In this regard, section 69.0.1 of the Tax
Administration Act allows the ARQ to communicate information contained in a
tax record to another government without the consent of the person concerned.
[11]
Thus, in the present case, for GST purposes, the
ARQ auditor may, in accordance with section 69.0.1 of the Tax Administration
Act, communicate to the CRA (Canada Revenue Agency) information regarding
subcontractors contained on the form. On this form the registrant is required to
provide the following information for each subcontractor:
•
the name, address and telephone number;
•
the total of the amounts charged for the work
(that is, the total of the amounts that you paid or that you owe with respect
to the work for the reporting period concerned, minus any portion you reported
for a previous period);
•
the identification and file numbers (if the
subcontractor is a QST registrant) and the amount of QST payable with respect
to the amounts reported;
•
the social insurance number, if the
subcontractor is an individual and is not registered for the QST.
[12]
Under the agreement with respect to the administration
by Quebec of Part IX of the Excise Tax Act relating to the goods and
services tax ("Canada-Quebec Agreement), the ARQ administers the GST in Quebec.
[13]
Since the ARQ administers the two taxes in Quebec, that is, the GST and the QST, the exchange of information relating to the
administration of both taxes is facilitated.
[14]
Under the Tax Administration Act, the ARQ
may, for GST purposes, use the information it obtained in the administration of
the QST. The converse is also true: as a consequence of the Canada-Quebec
Agreement the ARQ is likewise authorized, under subsection 295(5) of the Excise
Tax Act, to communicate for QST purposes information it obtained in
the administration of the GST.
[15]
The question of whether the information on the
forms was or was not used for GST purposes in the present case is an issue the
Court will determine at the hearing. As a result, I am of the view that at this
stage of the proceedings it would be unwise to conclude that the forms
identifying the subcontractors are not relevant for GST purposes.
[16]
The amendment required by the appellant would
not result in an injustice to the respondent that is not capable of being
compensated by an award of costs, and so I allow the amendments indicated in
the amended amended notice of appeal.
[17]
That being said, the motion for amendment could
have been filed well before the morning of the hearing. As a result, costs of
$700 are awarded to the respondent.
[18]
This Court ALLOWS the appellant to amend the
amended notice of appeal, the amended amended notice of appeal being deemed to
have been filed with this Court on the date of the order herein, and ORDERS:
The appellant shall serve the amended
amended notice of appeal on the respondent, and the respondent shall have 60
days after being served with the amended amended notice of appeal to file a
reply to the amended amended notice of appeal.
The appellant shall pay the respondent costs of $700,
regardless of the outcome of the appeal.
The hearing scheduled for April 29, 2014 is adjourned.
The appeal shall be set down for hearing on Monday,
October 20, 2014, at 9:30 a.m., for a duration of five days, before the Tax
Court of Canada, at 30 McGill Street, Montreal, Quebec.
Signed at Ottawa, Canada, this 26th day of May 2014.
"Johanne D’Auray"
Translation
certified true
on this 1st day of
December 2014.
Erich Klein,
Revisor
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