Date: 20080908
Docket: T-206-08
Citation: 2008 FC 996
Toronto, Ontario, September 8,
2008
PRESENT: The Honourable Mr. Justice Hughes
BETWEEN:
JOSEPH PANCHYSHYN
Applicant
and
CANADA REVENUE AGENCY
Respondent
REASONS FOR JUDGMENT AND JUDGMENT
[1]
The
Applicant, Joseph Panchyshyn, is a sales representative with an Ontario real estate
company and, as such, his income is largely based on commissions earned in
respect of real estate transactions with which he was involved. Until the end
of 2005, the Applicant paid his income taxes regularly. In 2006, the Applicant
suffered a number of personal and family setbacks resulting in reduced income
particularly in the first six months of the year. He did not make instalment
payments in respect of any part of the 2006 taxation year. Negotiations
ensured with the Respondent Canada Revenue Agency (CRA) as a result of which no
penalties were assessed for the 2006 taxation year and interest was waived in
respect of the first six months of that year. The CRA however, demanded
interest in respect of payments that should have been made in the latter half
of the 2006 taxation year on the basis that by that time he had sufficient
income to make those payments. It is that decision that is the subject of this
judicial review.
[2]
Section
152(4.2) of the Income Tax Act, R.S.C. 1985, c. 1 (5th supp.)
is part of a statutory scheme sometimes referred to as the “fairness provision”
or “fairness package” that gives the CRA the discretion to grant relief against
certain provisions of that Act including interest and penalties. The Federal
Court, under the provisions of section 18.1 of the Federal Courts Act,
R.S.C. 1985, c. F-7 has jurisdiction to conduct a judicial review of the
exercise of such discretion by the CRA if circumstances warrant such review.
[3]
The
Federal Court of Appeal in Lanno v. Canada (CRA), 2005 FCA
153 and in Comeau v. Canada (CRA), 2005 FCA 271 considered what standard
of review should be applied to decisions of the CRA in circumstances of this
kind in applying the provision of section 152(4.2) of the Income Tax Act
and determined that the standard to be applied is that of reasonableness.
These decisions were made before the Supreme Court of Canada made its decision
in Dunsmuir v. New Brunswick, [2008] 1 S.C.R. 190. The
Dunsmuir decision had the effect of reducing three former standards
usually applied, patent unreasonableness, reasonableness and correctness into
two, reasonableness and correctness. In so doing, the majority of the Court,
at paragraphs 47 to 50 cautioned that the move toward a single reasonableness
standard does not pave the way for a more intrusive review by the Courts, nor
require excessive formalism. Deference is to be afforded to decision makers
whose day to day working in complex matters results in the development of
considerable experience and sensitivity in dealing with the subject matter at
hand. At paragraph 49, Justice LeBel said:
49 Deference in the context of the
reasonableness standard therefore implies that courts will give due consideration
to the determinations of decision makers. As Mullan explains, a policy of
deference "recognizes the reality that, in many instances, those working
day to day in the implementation of frequently complex administrative schemes
have or will develop a considerable degree of expertise or field sensitivity to
the imperatives and nuances of the legislative regime": D. J. Mullan,
"Establishing the Standard of Review: The Struggle for Complexity?"
(2004), 17 C.J.A.L.P. 59, at p. 93. In
short, deference requires respect for the legislative choices to leave some
matters in the hands of administrative decision makers, for the processes and
determinations that draw on particular expertise and experiences, and for the
different roles of the courts and administrative bodies within the Canadian
constitutional system.
[4]
In
the present case, the record shows that the Applicant made his circumstances
and concerns known to the CRA and that consideration was given to these
matters, as a result of which penalties were waived as were certain interest
demands but not others respecting the latter half of the 2006 taxation year.
The CRA took into account that the Applicant had little income in the early
part of the 2006 year but also noted that in the latter half of that year, the
received considerable income that would have enabled him to make the tax
payments scheduled to be made. Such determination was not unreasonable and
should not be set aside on this judicial review.
[5]
The
application will be dismissed. Given the relatively small sums involved and
that the Applicant was self-represented, no costs will be awarded.
JUDGMENT
For the
Reasons provided:
THIS COURT
ORDERS AND ADJUDGES that:
1.
The
application is dismissed;
2.
No
Order as to costs.
“Roger
T. Hughes”
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