Docket: T-1623-15
Citation:
2016 FC 66
Vancouver, British Columbia, January 20, 2016
PRESENT: Prothonotary
Roger R. Lafrenière
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BETWEEN:
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MAO LAN FENG
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Applicant
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and
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HER MAJESTY THE
QUEEN
IN RIGHT OF
CANADA
(THE MINISTER
OF NATIONAL REVENUE)
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Respondent
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JUDGMENT AND REASONS
UPON MOTION in writing dated December
16, 2015, on behalf of the Respondent pursuant to Rule 369 of the Federal
Courts Rules for:
(a)
an order pursuant to Rule 221 of the Federal
Courts Rules (SOR/98-106) striking out the application filed on September
24, 2015 (the “application”);
(b)
alternatively, an order extending the time for
the Respondent to serve its supporting affidavits and documentary exhibits and
to file proof of service of same pursuant to Rule 307, to cross-examine on
affidavits and to serve and file the Respondent’s Record;
(c)
costs of this motion; and
(d)
such further and other relief as this Honourable
Court may deem appropriate.
AND UPON reading the motion records filed on behalf of the parties, and the
Respondent’s written representations in reply;
[1]
On September 24, 2015, the Applicant filed a
Notice of Application seeking judicial review pursuant to section 18.1 of the Federal
Courts Act [FCA] of a decision of the Minister of National Revenue (the
Minister) made on August 25, 2015 not to extend the time within which a notice
of objection was required to be filed by the Applicant to a Notice of
(Re)assessment of GST dated December 3, 2009. The Applicant seeks an order of
mandamus compelling the Minister to extend the time to file a notice of
objection and requiring the Minister to accept the Applicant’s notice of objection
as a valid objection for the purposes of section 301 of the Excise Tax Act
[ETA].
[2]
The relevant facts, as asserted in the Notice of
Application, may be summarized as follows. In 2009, the Canada Revenue Agency
(CRA) conducted a combined income tax and Goods and Services Tax/Harmonized
Sales Tax (GST/HST) audit of the Applicant and her spouse for the reporting
periods of 2005, 2006 and 2007 (the Relevant Period). By Notice of
(Re)assessment dated December 3, 2009, the Minister fixed the Applicant’s tax
liability under the ETA in respect of the Relevant Period for net GST payable,
penalties and interest arrears totalling $42,089.95.
[3]
The Applicant was advised by her authorized
representative that it was not necessary to file a notice of objection to the
GST assessment because any changes to the income tax payable by the Applicant
in respect of the Relevant Period would automatically give rise to
reassessments of the GST payable by the Applicant. The Applicant appealed
the reassessment of her income tax to the Tax Court of Canada (Tax Court) in
2012 and ultimately discontinued her appeal following the issuance of a further
income tax assessment by the Minister on November 28, 2014.
[4]
By letter dated June 10, 2015, the Applicant
requested that the Minister extend the time to file a notice of objection
to the GST (Re)assessment pursuant to subsection 281(1) of the ETA. The
Minister refused to extend the time on the grounds that the Applicant did not file
a notice of objection or request an extension to do so within the time limits
set out in subsection 303(7) of the ETA.
[5]
The Respondent (who is incorrectly named as Her
Majesty the Queen in Right of Canada in the style of cause instead of the
Attorney General of Canada) has moved for an order pursuant to Rule 221 of the Federal
Courts Rules (Rules) striking the Notice of Application on the
grounds that the application has no reasonable prospect of success.
[6]
Rule 221 is contained in Part 4 of the Rules,
which applies to all proceedings that are not applications or appeals. Rule
221(1) provides that a statement of claim may be struck out on the ground that
it discloses no reasonable cause of action. There is no corresponding rule in
Part 5 of the Rules, which governs proceedings brought by way of
application, for striking out a notice of application. This characteristic was
discussed by Mr. Justice Barrry Strayer of the Federal Court of Appeal in the
decision in David Bull Laboratories (Canada) Inc v Pharmacia Inc,
1994 CanLII 3529 (FCA), (David Bull) at pages 596 and 597:
[...] the direct and proper way to contest an originating notice of
motion which the respondent thinks to be without merit is to appear and argue
at the hearing of the motion itself. [...]
[7]
Justice Strayer nonetheless concluded that this
Court had jurisdiction, in very exceptional cases, to strike a notice of
application, at page 600:
[...] This is not to say that there is no jurisdiction in this Court
either inherent or through Rule 5 [now Rule 4] by analogy to other rules, to
dismiss in summary manner a notice of motion which is so clearly improper as to
be bereft of any possibility of success. Such cases must be very exceptional
and cannot include cases such as the present where there is simply a debatable
issue as to the adequacy of the allegations in the notice of motion.
[8]
In my view, this case falls squarely within the
David Bull exception. The application for judicial review is clearly bereft
of any possibility of success as the existence of a right to appeal the Minister’s
decision to the Tax Court, whether exercised or not, is a bar against judicial
review.
[9]
Subsection 303(1) of the ETA provides that where
no objection to an assessment is filed under section 301, or no request has
been made under subsection 274(6), within the time limit otherwise provided, a
person may make an application to the Minister to extend the time for filing a
notice of objection. A person who has made an application under section 303 may
apply pursuant to subsection 304(1) to the Tax Court to have the application
granted after the Minister has refused the application no later than thirty
days after the day the decision has been mailed to the person under subsection
303(5).
[10]
In enacting sections 301 to 306, Parliament has
provided a complete statutory framework for the exercise by a person of the
right to dispute the validity of a tax assessment, all within clear and
stringent timeframes. The essential character of the present application for
judicial review is a collateral attack of the validity of the Minister’s
assessment which is not only time-barred under the ETA, but also barred by
section 18.5 of the FCA.
[11]
Section 18.5 provides that, to the extent that a
matter may be appealed under a statute, judicial review is not available.
Pursuant to section 12 of the Tax Court of Canada Act, the Tax Court has
exclusive original jurisdiction to hear and determines appeals relating to
assessments of tax under the ETA, as well as applications for extensions of
time under section 304 of the ETA.
[12]
The fact that the Tax Court may not be able to
grant any relief to the Applicant under subsection 304(1) because the
statutorily prescribed time limits for filing a notice of objection or to seek
an extension of time have expired does not allow the Applicant to circumvent
the comprehensive system of tax assessments and appeals established by the
Parliament. It is simply not open to the Applicant to indirectly challenge the
Minister’s decision in this Court by mischaracterizing the decision as a denial
under subsection 281(1) of the ETA.
[13]
Being substantially in agreement with the
written representations filed by the Respondent, and in particular the
Respondent’s reply submissions, which I adopt and make mine, I conclude that
the application should be dismissed on the grounds that it is bereft of any
possibility of success. The application is an improper collateral attack of the
Minister’s decision of August 25, 2015 and constitutes an abuse of process.
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