[1] The Applicants wish to have this Court reinstate income tax appeals that were dismissed when they failed to appear for the hearing of their appeals before the Tax Court of Canada. Their application is based on section 18.21 of the Tax Court of Canada Act, R.S.C. 1985, c. T-2, which is part of the statutory scheme for income tax appeals under the informal procedure of the Tax Court of Canada. Section 18.21 reads as follows:

18.21 (1) Where an appellant does not appear on the day fixed for the hearing, or obtain an adjournment of the hearing, of an appeal, the Court shall, on application by the respondent and whether or not the appellant has received notice of the application, order that the appeal be dismissed, unless the Court is of the opinion that circumstances justify that the appeal be set down for hearing at a later date.

18.21 (1) Sauf si elle est d'avis que les circonstances justifient que l'appel soit entendu à une date ultérieure, la Cour est tenue, à la demande de l'intimé et ce, que l'appelant en ait été avisé ou non, d'ordonner le rejet de l'appel si ce dernier ne comparaît pas à la date fixée pour l'audition ou n'obtient pas un ajournement.

(2) An appellant whose appeal has been dismissed pursuant to subsection (1) may apply to have the order of dismissal set aside and the appeal set down for hearing.

(2) L'appelant dont l'appel a été rejeté peut demander qu'il soit repris et que l'ordonnance de rejet soit annulée.

(3) The Court may set aside an order of dismissal made under subsection (1) where

(3) La Cour peut annuler l'ordonnance de rejet si les conditions suivantes sont réunies :

(a) it would have been unreasonable in all the circumstances for the appellant to have attended the hearing; and

a) compte tenu de toutes les circonstances, il n'était pas raisonnable de s'attendre à ce que l'appelant soit présent à l'audition;

(b) the appellant applied to have the order of dismissal set aside as soon as circumstances permitted the application to be brought but, in any event, not later than one hundred and eighty days after the day on which the order was mailed to the appellant.

b) l'appelant a présenté sa demande d'annulation dès que cela a été possible, compte tenu des circonstances, mais dans tous les cas au plus tard cent quatre-vingts jours suivant la date de l'envoi par la poste de l'ordonnance rejetant son appel.

[2] The applicants' income tax appeals related to claims for tax credits for charitable donations in 1993, 1994 and 1995, in the case of James Dayan, and 1994, 1995, 1996 and 1997, in the case of Albert Dayan. The claims were disallowed by reassessment. The applicants appealed the reassessments to the Tax Court under the informal procedure.

[3] The appeals were scheduled for hearing on February 10, 2003 in Toronto. Both applicants were aware that the appeals had been scheduled for that date and place. However, they did not appear for the hearing or seek an adjournment. A man who identified himself as a "messenger" attended the hearing and delivered some documents for the applicants. His name does not appear in the transcript of the proceedings of February 10, 2003. It appears that he was a member of a firm of chartered accountants representing the applicants. However, he gave no indication to the Tax Court Judge that he was authorized to act on their behalf to seek an adjournment, or to conduct the appeal. The matter was adjourned for an hour to permit him to make a telephone call to obtain instructions, but to no avail.

[4] When the February 10, 2003 proceedings resumed after the adjournment, the Crown exercised its right under subsection 18.21(1) of the Tax Court of Canada Act to apply to have the appeals dismissed. Orders dismissing the appeals were signed by the Tax Court Judge on February 19, 2003.

[5] On February 28, 2003, the applicants exercised their right under subsection 18.21(2) of the Tax Court of Canada Act to apply to the Tax Court to have the orders of dismissal set aside and the appeals set down for hearing. Those applications were heard on April 7, 2003 and dismissed, for reasons given orally. The reasons are now reported as Dayan v. Canada, 2003 D.T.C. 1404 (T.C.C.).

[6] In an application under subsection 18.21(2) to set aside a dismissal order, the Tax Court Judge must consider whether the conditions in paragraphs 18.21(3)(a) and (b) are met. If they are not met, the application must be dismissed. If they are met, the Tax Court Judge must consider whether to exercise his discretion to grant the application. That the Tax Court Judge has such a residual discretion is indicated by the use of the word "may" in the opening words of subsection 18.21(3).

[7] In this case, the Tax Court Judge found that the condition in paragraph 18.21(3)(b) was met. As to paragraph 18.21(3)(a), there was evidence before the Tax Court Judge that, on the day of the hearing, Albert Dayan suffered from a painful condition requiring emergency dental surgery, and James Dayan was in New York attending a memorial service for a family member. The Tax Court Judge did not say whether he considered that those circumstances would have made it unreasonable for Albert Dayan and James Dayan to attend the hearing. Nor did he say whether he considered the condition in paragraph 18.21(3)(a) to have been met.

[8] For the purposes of the proceedings in this Court, I am prepared to assume, in the applicants' favour, that the Tax Court Judge reached the conclusion that the condition in paragraph 18.21(3)(a) was met, and that he dismissed their applications to set aside the dismissal orders on the basis of his residual discretion. It would follow that the issue before this Court is whether the Tax Court Judge, in exercising his discretion as he did, made an error that warrants the intervention of this Court. It is trite law that this Court will not reverse a discretionary order in the absence of an error of law or a failure to consider relevant factors.

[9] According to the reasons of the Tax Court Judge, he dismissed the applications to set aside the dismissal orders because he found as a fact that the applicants, when required to explain their failure to appear at the hearing or to have someone else appear on their behalf, had not been credible. The record before the Tax Court Judge provided ample support for that factual conclusion. In my view, the Tax Court Judge made no error in taking the applicants' conduct into account in dismissing their applications.

[10] These applications for judicial review should be dismissed with costs.

"K. Sharlow"

J.A.

"I agree

Marshall Rothstein J.A."

"I agree

Marc Noël J.A."

FEDERAL COURT OF APPEAL

NAMES OF COUNSEL AND SOLICITORS OF RECORD

DOCKETS: A-230-03

A-231-03

STYLE OF CAUSE: Albert Dayan and Her Majesty The Queen

and James Dayan and Her Majesty The Queen

PLACE OF HEARING: TORONTO, ONTARIO

DATE OF HEARING: FEBRUARY 19 , 2004

REASONS FOR JUDGMENT: SHARLOW J.A.

CONCURRED IN BY: ROTHSTEN J.A.

NOËL J.A.

DATED: FEBRUARY 23, 2004

APPEARANCES:

Mr. Maurice Vaturi FOR THE APPLICANTS

Ms. Marie-Thérèse Boris FOR RESPONDENT

SOLICITORS OF RECORD:

Campione & Vaturi FOR THE APPLICANTS

Toronto, Ontario

Morris Rosenberg FOR THE RESPONDENT

Deputy Attorney General of Canada

Toronto Ontario

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Dayan v. Canada, 2004 FCA 75

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2004 FCA 75