Docket: A-88-16
Citation:
2017 FCA 121
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CORAM:
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GAUTHIER J.A.
DE MONTIGNY J.A.
WOODS J.A.
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BETWEEN:
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1218395 ONTARIO
INC.
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Appellant
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and
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HER MAJESTY THE
QUEEN
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Respondent
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REASONS FOR JUDGMENT OF THE COURT
(Delivered from the Bench at Toronto, Ontario, on June
13, 2017).
GAUTHIER J.A.
[1]
We have before us an appeal from an Order of
Graham J. of the Tax Court of Canada (TCC) quashing the appeals of 1218395
Ontario Inc. (the appellant) from a number of assessments made under Part IX of
the Excise Tax Act, R.S.C., 1985, c. E-15 for the reporting periods
between January 1, 2001 to December 31, 2001, and from reassessments under the Income
Tax Act, R.S.C., 1985, c. 1 (5th Supp.) in respect of the appellant’s
taxation years 1998 to 2005.
[2]
We also have a motion for leave to file new
evidence pursuant to Rule 351 of the Federal Courts Rules, SOR/98-106,
which was referred to the panel hearing the merits of this appeal.
[3]
The TCC quashed the appeals referred to above on
the basis that the appellant has no legal status to initiate legal proceedings
due to the fact that it had lost its corporate charter on or about March 27, 2006
(when its charter was revoked under the Ontario Business Corporations Act,
R.S.O. 1990, c. B-16 (OBCA)). The appellant filed its notices of appeal to the
TCC in 2011. The appellant failed to revive its corporate charter within the
time period set by the TCC in its Order dated November 18, 2015, despite being
granted the additional three months it requested to complete the process.
[4]
Before quashing the said appeals, the TCC held a
conference call with the parties on February 8, 2016 in order to ascertain the
status of the matter (the telephone conference). The appellant’s counsel at the
time, a former officer and a former employee of the appellant all had the
opportunity to explain the prior attempts made to revive the company’s charter
back in 2012 and in March 2015. They also indicated that the appellant had hoped
that the Canada Revenue Agency (CRA) could help them change the view of the
Minister of Finance of Ontario who was apparently refusing to give his consent because
of the appellant’s outstanding provincial tax.
[5]
When the appellant sought a further extension,
the TCC asked its representatives to clarify what concrete steps had been taken
since November 18, 2015 to meet the deadline set by the TCC. The request for a further
extension of time was refused because the TCC determined that insufficient
efforts had been deployed to advance this matter since November 2015. In fact,
the TCC noted that the appellant had done little more but to confirm
information it already had at the time it requested the three month extension.
[6]
It is clear that on the record before it, it was
open to the TCC to conclude as it did. This is not really disputed.
[7]
Instead, the appellant submits that the TCC’s
decision was made on the basis of inadequate information insofar as the CRA
failed to fairly and candidly disclose all relevant information about its role
in the Ontario Minister of Finance’s refusal to consent to the revival of the
company.
[8]
In its motion to file new evidence, the
appellant alleges that the CRA was responsible for blocking the revival of its
corporate charter. It claims that it wishes to contest the position taken by
the Ontario Ministry of Finance. We note that during the telephone conference, Mr.
Bonhomme, the appellant’s employee, alluded to the need to make further investigations
into the process under section 241 of the OBCA.
[9]
The new evidence the appellant seeks to file
consists mostly of information and documentation which were in the appellant’s
possession when it made its representation before the TCC on February 8, 2016.
It also includes information about the fact that in 2008, the CRA entered into
an agreement with the Minister of Finance of Ontario for the provision of
services relating to the administration and enforcement of provincial taxes
(the Agreement). Also included are correspondence between the parties’ counsel
since February 2016 in respect of what knowledge, if any, counsel for the
respondent and other persons within the Ministry of Justice had about the
appellant’s applications under the OBCA.
[10]
The appellant acknowledges that its new evidence
does not meet the test generally used by this Court to determine whether it
will exercise its discretion under Rule 351. However, it asks the Court to
exercise its residual discretion for in its view, this is a clear case where this
new evidence is required to avoid a miscarriage of justice.
[11]
Having considered this new evidence, we have not
been persuaded that it provides much more than what was generally conveyed to
the TCC by the parties. The new evidence does not substantiate the appellant’s
bald allegation that the CRA was responsible for blocking the revival of the
appellant’s corporate charter. At best, it raises a line of inquiry in respect
of an issue that had already been identified by Mr. Bonhomme. There is nothing
in the Agreement indicating that the delegation of power extends or includes
the granting of consent for Articles of revival under the OBCA. The appellant
acknowledged that there was no specific provision dealing with this matter in
the Corporation Tax Act, R.S.O. 1990, c. C-40. The only provision
dealing with such a consent is section 6 of the Ontario Regulation 289/00
adopted under the OBCA. Finally, we are not satisfied that it establishes that
the CRA failed to disclose any information that could have a material impact on
the TCC’s view that the appellant had not been diligent.
[12]
The Court must exercise its discretion under
Rule 351 with great care and whatever residual discretion remains when the applicable
test is not met must be used only in the clearest cases where the interest of
justice requires it. This is not one of those cases.
[13]
The appellant has known for many years that it
had to revive its corporate charter under the OBCA. It was put on notice that
if this was not done by February 12, 2016, its appeals before the TCC would be
quashed. It did nothing before the telephone conference but write to the
Ontario Ministry of Finance to inform it that the appellant needed a letter of
consent to revive its corporate charter to pursue its appeal of a federal tax reassessment.
When it sought a further extension of time from the TCC during the telephone
conference, it provided no evidence from which the TCC could infer that the
appellant had a serious plan as to how they would obtain the Ontario Minister’s
consent or how they could otherwise obtain their corporate revival.
[14]
In light of the above, we have not been persuaded
that, even with the new evidence, this Court’s intervention is justified.
Therefore, the motion for leave to file new evidence and the appeal shall be
dismissed with costs fixed in the amount of $1,000.00 (all inclusive).
“Johanne Gauthier”
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