Virginia Bell v. Her Majesty the Queen (Informal Procedure), [1993] 2 CTC 2688

Brulé, T.C.C.J.:—The appellant has brought a motion for an order that this appeal be heard by way of the general procedure.

Facts

On February 29, 1992, the appellant filed a notice of appeal to this Court in which she elected to have her appeal heard under the informal procedure of the Tax Court of Canada ("Court").

This notice was filed before the appellant had consulted legal counsel. Subsequently, she wished to revoke her election preferring instead to proceed by way of the general procedure.

The Deputy Attorney General of Canada on behalf of the respondent consented to the issuing of such an order provided that a fresh notice of appeal, all in accordance with the general procedure requirements, be filed with the Court. This however, is not possible because in order to commence the appeal anew it would be necessary to discontinue the pending appeal and that would automatically result in its being deemed to be dismissed under subsection 16.2(2) of the Tax Court of Canada Act, R.S.C. 1985, c. T-2.

Appellant's position

Counsel for the appellant provided the Court with written submissions in support of the motion. These submissions were as follows:

It is submitted that section 17 of the Act grants Ms. Bell the right to have her appeal heard according to the procedures set out in sections 17.1 to 17.8 of the Act (the"general procedure"). Although Ms. Bell originally elected to proceed by way of the informal procedure, she now revokes that election. There is nothing in the Act or Rules which prohibit Ms. Bell from revoking her previous election. Moreover, it is submitted that it is consistent with the intent and scheme of the Act that Ms. Bell have the right to revoke her previous election and her appeal be heard according to the general procedure.

Under the Act, a taxpayer has the right to elect to proceed by way of the informal procedure for appeals under $7,000. The Act intends that decision to rest with the taxpayer. We submit that it would be inconsistent with the intent of the Act to restrict a taxpayer's right to make that decision except to the extent that that right is expressly limited within the Act. As already noted, nowhere in the Act or Rules is a taxpayer prevented from revoking his or her election. It is submitted that to bind a taxpayer to his or her previous election would undermine the clear intent of the Act to confer on the taxpayer the right to decide whether or not to proceed by way of the informal procedure.

Furthermore, it is submitted that the Court should also take into account the fact that a taxpayer may not fully realize the implications of his or her election when filing a notice of appeal. It is of some interest to note that the current information sheet provided to taxpayers informing them of the two procedures makes no reference to the fact that cases heard under the informal procedure have no precedential value and have a limited right of appeal (see TLA7 Rev. 9/91). In Ms. Bell’s case,she had not consulted a lawyer prior to making her election and did not realize that if her appeal was heard by way of the informal procedure it would not have any precedential value. It was only after she made her election and retained counsel that this point was drawn to her attention.

Ms. Bell seeks to challenge the Minister of National Revenue's inclusion of child support payments as taxable income in the 1989 and 1990 taxation years. The issue raised in her appeal turns on the constitutionality of the provisions in the Income Tax Act requiring the inclusion of child support payments as income. We submit that paragraphs 56(1)(b), (c) and (c.1) and paragraphs 60(b), (c), and (c.1) infringe subsection 15(1) of the Charter. Since Ms. Bell is to receive child support payments for her three children for a number of years, it is important that this appeal determine the issue not only for the taxation years in issue but also for subsequent taxation years. Moreover, the Charter issue raised in this appeal is one of importance to other women receiving child support payments. Both of these reasons support the argument that the determination of this appeal be made in a manner that will have precedential value.

We further submit that the scheme of the Act is consistent with the position that this Court has the jurisdiction to entertain the motion for an order that this appeal be heard in accordance with the general procedure. Subsection 18.11(2) provides that where the outcome of an appeal is likely to affect any other assessment of the appellant and the aggregate amount of all amounts in issue is likely to exceed $7000 the Court must grant the Crown's motion for an order that the general procedure apply. Likewise, subsection 18.11(5) states that the Court shall grant the Crown's application to have the general procedure apply where the issue that is the subject matter of the appeal is common to a group or class of persons. Both these situations arise in Ms. Bell's case. The issue of the inclusion of child support payments as taxable income affects subsequent taxation years for Ms. Bell and therefore future assessments. Moreover, it is submitted that this case raises issues which transcend the individual facts of this case and are of importance to other women receiving child support payments.

Accordingly, it is submitted that if the Act were to be interpreted to prevent Ms. Bell from revoking her previous election, it would lead to the anomalous result that while on a motion by the Crown the Court would be compelled to order the general procedure to apply on an appeal falling within the scope of subsections 18.11(2) and (5), on a motion by the taxpayer the Court would refuse to grant the order even though the grounds for the order are exactly the same. If Parliament has deemed it appropriate that the general procedure apply to the fact situations set out in subsections 18.11(2) and (5), it is submitted who brings the motion should be irrelevant.

Much of the confusion on this issue arises from the fact that the Act and Rules expressly provide for a motion being brought by the Crown but not by the taxpayer. However, the presence of these express provisions should not be interpreted as indicating the Court does not have jurisdiction to hear a taxpayer's motion to have his or her appeal moved back to the general procedure. Rather, they simply affirm that the decision whether to proceed by way of the informal procedure rests with the taxpayer under the Act. The right of the Crown to interfere with the taxpayer's right to choose the informal procedure must expressly be set out. However, there is no corresponding need to include express provisions for a taxpayer since the Act already recognizes that the decision whether to proceed by way of the informal procedure rests with the taxpayer.

In summation, it is submitted that the Act should be interpreted to allow Ms. Bell to revoke her previous election and have her appeal heard according to the general procedure. The importance of the issue raised in this appeal as well as the relevance of that issue to subsequent taxation years for Ms. Bell render the general procedure the more appropriate of the two procedures. It is consistent with both the intent and scheme of the Act that this Court find it has jurisdiction to grant an order that sections 17.1 to 17.8 apply to this appeal. Moreover, it is submitted that it is appropriate in these circumstances to do so.

Respondent's position

While the respondent agreed to the order as set out above, the Crown would not bring such a motion on its behalf, believing that the issue in this appeal is the same or substantially the same as that raised in another appeal now before the Federal Court of Appeal for a judicial review of a decision rendered by this Court.

Analysis

The Court has considered this motion and the position of the appellant as set out above.

Section 17 of the Tax Court of Canada Act requires that the appellant's appeal be dealt with under the general procedure subject to her election for the informal procedure. The opening words of section 17 are: "Subject to section 18. . . .” Section 17 simply provides that the general procedure applies to an appeal under the Income Tax Act, R.S.C. 1952, c. 148 (am. S.C. 1970-71-72,

c. 63) (the "Act") unless a taxpayer elects in his notice of appeal or under subsection 16(1) of the Tax Court of Canada Rules (informal procedure) to have the informal procedure apply. Any "right" a taxpayer has to decide what procedure shall apply is under section 18 of the Act and subsection 16(1) of the informal rules.

When there is a statutory right to elect between the different procedures in pursuit of a remedy, once an election is made that finally determines which

governs unless the legislation expressly or by necessary implication provides for a further re-election.

Parliament having specifically addressed the question of when an appeal that is governed by the informal procedure may or shall be made subject to the general procedure, the existence of additional circumstances cannot be inferred in the legislation. Under section 18.11 an appeal referred to in section 18 can be made subject to the general procedure by order of the Court made on application of the Attorney General of Canada. Further it has provided for an appeal that should not prima facie be under the informal procedure to be dealt with under that procedure if appellants elect to limit the amounts in issue, as provided in section 18.12. There are no other options.

The result is that this motion is dismissed. No costs are awarded.

Appeal dismissed.