Date: 20080215
Docket: A-574-07
Citation: 2008 FCA 62
Present: SHARLOW
J.A.
BETWEEN:
INTERNATIONAL CHARITY ASSOCIATION NETWORK
(ICAN)
Appellant
and
THE MINISTER OF NATIONAL REVENUE,
HER MAJESTY THE QUEEN
Respondents
REASONS FOR ORDER
SHARLOW J.A.
[1]
Before me is
a motion that requires an examination of the procedures available to a
registered charity under the Income Tax Act, R.S.C. 1985, c. 1 (5th
supp.), upon receipt of a notice of intention to revoke its registration.
[2]
In this
case some procedural errors have been made due to a misunderstanding. However, the
errors can and will be remedied without prejudice to the parties. The appellant
has requested an oral hearing. In my view an oral hearing is not necessary.
Summary of the procedures for
challenging a revocation notice
[3]
When the
Minister concludes that the registration of a charity should be revoked, he
issues a notice of intention to revoke the registration pursuant to subsection
168(1) of the Income Tax Act. The revocation itself does not occur until
the revocation notice is published in the Canada Gazette.
[4]
Paragraph
168(2)(a) of the Income Tax Act provides that the publication of
the revocation notice may occur immediately if the revocation was requested by
the charity. Where there is no such request (as in this case), the Minister is
required by paragraph 168(2)(b) to defer the publication of the revocation
notice for a period of time in order to permit the charity to challenge the
decision to revoke. There is an automatic deferment period of 30 days, but that
may be extended by the Federal Court of Appeal or a judge of the Federal Court
of Appeal, provided the order is made before the determination of an appeal
under subsection 172(3) of the Income Tax Act.
[5]
The right
of appeal under subsection 172(3) does not arise unless the charity files a
notice of objection under subsection 168(4) of the Income Tax Act
challenging the revocation notice. The notice of objection must be served on or
before the day that is 90 days after the service of the revocation notice. If
the Minister confirms the revocation notice, or does not confirm or vacate the revocation
notice within 90 days after service of the notice of objection, the charity may
appeal the revocation notice to the Federal Court of Appeal pursuant to
paragraph 172(3)(a.1).
[6]
The right
of the charity under paragraph 168(2)(b) to seek an extension of the deferment
period is independent of the right of appeal under subsection 172(3). An
extension may be sought before the right of appeal is exercised, or even before
the right of appeal arises. The only time constraint is that an order granting
an extension of the deferment period must be made before the determination of
the appeal.
[7]
When a
charity wishes to seek an extension of the deferment period before an appeal is
filed or before the right to appeal arises, the appropriate procedure is an
application under Rule 300(b) of the Federal Courts Rules (the
same procedure as an application for judicial review). If a charity wishes to seek
an extension of the deferment period after an appeal has been commenced, the
appropriate procedure is a notice of motion in the appeal.
Facts
[8]
The appellant
International Charity Association Network (ICAN) is a registered charity. On
December 3, 2007, the Minister of National Revenue issued to ICAN, pursuant to
subsection 168(1) of the Income Tax Act, a notice of intention to revoke
its registration as a charity. At this stage it is not necessary to consider
the reasons for the Minister’s action, except to note that it is based on
subsection 149.1(2) of the Income Tax Act.
[9]
Soon
afterward, counsel for ICAN spoke to the Registry Officer about the procedure
for seeking an extension of the deferment period pursuant to paragraph 168(2)(b).
She says she was advised that such an application could not be made unless an
appeal was commenced. If that advice was given, it was incorrect. In any event,
in an attempt to accelerate the appeal process, ICAN filed a notice of
objection pursuant to subsection 168(4) and attempted unsuccessfully to
persuade the Minister to confirm immediately. For reasons that I need not
address at this point, ICAN concluded that it was entitled to file the notice
of appeal despite the lack of a formal confirmation. That was done on December
20, 2007. At the same time, the appellant filed a notice of motion for an
extension of the deferment period. No motion record was filed.
[10]
On January
10, 2008, the Minister filed a notice of motion seeking to quash the appeal for
want of jurisdiction. The basis of the motion is that the Minister has not
confirmed the revocation notice and 90 days have not elapsed since the filing
of the notice of objection. ICAN objects to the motion on a number of grounds.
Both parties have filed supplementary submissions. Neither of them sought or
was granted permission to do so. Nevertheless I will direct that the
submissions be filed, and I have considered them.
Discussion
[11]
It is
obvious from the material filed that from the outset ICAN was attempting only
to seek an extension of the deferment period. However, because of the procedure
that was followed, the Minister has not made submissions on that point.
Instead, the Minister has insisted that all of the proceedings should be quashed.
In my view, that would entail an unnecessary waste of time and resources.
[12]
It is
clear that the notice of appeal was filed prematurely. The Court does not, at
this time, have the jurisdiction to grant any of the remedies sought in the
appeal. However, I cannot ignore the fact that incorrect information was provided
to counsel for ICAN, or the fact that the right of appeal will arise within about
30 days from now in any event unless the Minister vacates the notice of
revocation (which appears to be unlikely).
[13]
For that
reason, I will defer any decision on the motion to quash the appeal, and I will
stay the appeal and establish a procedure by which ICAN will be required to advise
the Court whether or not it wishes the appeal to proceed, once the right of
appeal arises.
[14]
Further, I
will ensure that the appellant has an opportunity to seek an order under Rule
369 extending the deferment period until the disposition of the notice of
objection and, if an appeal is filed to this Court, until the final disposition
of that appeal.
Costs
[15]
Both
parties have asked for the costs of this motion. The appellant seeks costs on a
solicitor and client basis, alleging that it has incurred unnecessary costs
because of the Minister’s inconsistent or frivolous positions, or because the
issues are unduly complicated or complex.
[16]
The
Minister has done nothing to justify an award of solicitor and client costs in
favour of the appellant in this matter. Costs of this motion will be costs in
the cause.
“K.
Sharlow”
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