Docket: T-1109-14
Citation:
2015 FC 117
Ottawa, Ontario, January 30, 2015
PRESENT: The
Honourable Mr. Justice Fothergill
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BETWEEN:
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CAMERON SCOTT ROBINSON
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Applicant
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and
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CANADA REVENUE AGENCY
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Respondent
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JUDGMENT AND REASONS
[1]
Cameron Scott Robinson (the Applicant) has
brought an application for judicial review of a decision of the Canada Revenue
Agency (CRA), pursuant to s 220(3.1) of the Income Tax Act, RSC 1985, c
1 (5th Supp), to grant him only partial relief from all interest and penalties
levied on his income taxes since 2000.
I.
Background
[2]
The Applicant’s difficulties with the CRA have
been ongoing for approximately 15 years. He conceded that between 2000 and 2005
he did not file income tax returns at all. His explanation was that he has
never been good at paperwork, and his work as a fitness instructor and massage
therapist did not generate a significant amount of income. Furthermore, his
investments had performed badly and so he assumed that he did not owe any taxes.
[3]
As a fitness instructor and massage therapist
the Applicant had multiple sources of income. None of the health facilities
that retained his services deducted taxes at the source, which the Applicant
considers to be at the root of his problems. It was not until 2006, when the
CRA informed him that he owed in excess of $100,000, that the Applicant
retained an accountant to help him address the situation. Following several
exchanges with the CRA, the outstanding debt was calculated to be approximately
$27,000 plus interest and filing penalties.
[4]
In 2012, the Applicant was involved in a serious
accident. He was riding his bicycle when he was struck by a car. He was unable
to work for four months, and to this day he has not fully recovered. He lost
his job with GoodLife Fitness due to his inability to work full-time. He
advised the Court that his doctor has recommended that he work no more than
half time. The Applicant has other outstanding debts, and he also pays child
support for a young son.
[5]
The Applicant noted that he holds approximately
$60,000 in investments. While his ability to gain access to these funds has
been affected by the CRA’s enforcement measures, counsel for the Respondent
advised the Court that the Applicant’s use of these funds is no longer subject
to any restriction by the CRA.
[6]
In 2010, the Applicant applied to the CRA for
relief from interest and penalties owed on his unpaid taxes. The application was
refused. The Applicant made two further requests for relief in 2012. There
followed numerous exchanges between the Applicant and the CRA, which culminated
in a decision by the CRA dated April 11, 2014. This is the decision that is now
subject to judicial review.
II.
The CRA’s Decision
[7]
In its decision dated April 11, 2014, the CRA
noted the following:
a) the Applicant was still suffering as a result of his accident;
b) the accident had caused him to be terminated from GoodLife Fitness;
c) the Applicant had been attempting to resolve issues surrounding his
unpaid taxes for many years, but without success;
d) the Applicant’s current medical and financial situation had reduced
his income considerably;
e) the Applicant had a history of non-compliance, and since 2000 all of
his income tax returns were filed late with the exception of the one for 2010;
f) the Applicant had not identified any circumstances that had
prevented him from filing his income tax returns when they were due; and
g) the Applicant had not taken reasonable care in the conduct of his
affairs and had knowingly allowed a balance to exist.
[8]
The CRA cancelled all interest owed on arrears
up to the date of the decision based on the financial and medical information
provided by the Applicant. This amounted to approximately $28,000. The CRA
declined to waive the outstanding penalties, totalling approximately $10,000.
III.
Standard of Review
[9]
The CRA’s authority to waive or cancel interest
and penalties with respect to a person’s personal income tax is found in s.
220(3.1) of the Income Tax Act. The standard of review for a decision
made under s. 220(3.1) is reasonableness. A reviewing court must determine
whether the decision falls “within a range of possible
outcomes which are defensible in respect of the facts and the law” (Telfer
v Canada Revenue Agency, 2009 FCA 23 at para 25, [2009] FCJ No 71 (QL), citing
Dunsmuir v New Brunswick, 2008 SCC 5, [2008] 1 S.C.R. 190 at para 47).
Analysis
[10]
The Applicant did not identify any specific
matter that the CRA had failed to take into account in considering his request
for relief of interest and penalties. Nor did he allege that he had been denied
an opportunity to present his case. On the contrary, a review of the file
confirms that the Applicant provided extensive information to the CRA. The
decision itself is transparent and intelligible. As noted above, the
Applicant’s grounds for relief were accurately summarised within the decision,
and the Applicant was ultimately successful in his request for relief from
interest on outstanding arrears.
[11]
The Applicant nevertheless complains that the
CRA did not give full consideration to his financial hardship and his efforts
to rectify his tax situation in declining to waive the filing penalties. I
disagree. As noted in the CRA’s decision, the Applicant did not identify any
circumstances that would explain his failure to file his income tax returns on time.
The Applicant advised the Court that he holds a degree in economics. He is a
well-travelled and sophisticated man who has been self-employed for many years.
[12]
The Applicant’s assertion that he believed he
did not owe taxes during the period 2000 to 2005 does not provide him with an
excuse for failing to file his income tax returns, and he acknowledges that
this was a mistake. From 2006 onwards he benefited from the services of an
accountant, and he also retained a financial services company to help him manage
his investments. He offered no explanation for his failure to file income tax
returns in a timely manner from 2006 onwards. I note that his 2010 return was
filed on time.
[13]
I am therefore satisfied that the decision of
the CRA to grant the applicant’s request for relief from all interest on income
tax arrears, but to decline to waive the filing penalties, falls within a range
of possible outcomes which are defensible in respect of the facts and the law. The
application for judicial review is dismissed.
IV.
Costs
[14]
The Respondent has requested costs of the
application. Ordinarily the Respondent would be entitled to costs. However, in
this case the Respondent twice sought extensions of time in order to file and
serve documents in accordance with the Federal Courts Rules, citing
inadvertence. The Respondent’s non-compliance with the Rules caused
delay and inconvenience to both the Applicant and the Court. In my view, this
is not an appropriate case for an award of costs.
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