Henry Irvine Graham v. Her Majesty the Queen, [1987] 2 CTC 255, 87 DTC 5455

Cullen, J.: —My colleague, McNair, J., granted the defendant the right to file a conditional appearance, contingent on a finding of jurisdiction of this court. Another colleague, Teitelbaum, J., heard argument from both parties and then adjourned the motion to October 29, 1987, requiring the defendant to meet certain undertakings in order to have the plaintiff better informed. The undertakings have been complied with by the defendant.

It was left, therefore, to determine if this Court has jurisdiction to hear the matters raised by the plaintiff in his statement of claim.

The defendant saw two issues, namely:

(a) in the preamble — an appeal from assessments made for the taxation years 1979, 1980 and 1981;

(b) an attempt in the statement of claim to resurrect the issue already dealt with, namely the 1948-1953 taxation years.

Despite urgings from staff at the Court and from my colleagues, the plaintiff has, for his own reasons, not secured the benefit of counsel. This decision is of course his to make but places him in an extremely difficult position, given the complex nature of his concerns vis-à-vis the Income Tax Act. In Graham v. M.N.R., [1959] C.T.C. 514; 59 D.T.C. 1271, Mr. Justice Dumoulin, at 515 (D.T.C. 1272) made this point:

It should be noted, from the start, that we have here one of those few, and usually unfortunate instances, wherein a party appealing on his own behalf, in the dual capacity of counsel and witness, does meagre justice to each.

A splendid presentation by counsel for the defendant, supported by long and comprehensive affidavits by Harold Romness, an officer of the Department of National Revenue, leaves no room for doubt that this Court does not have jurisdiction to try this action between plaintiff and defendant. Personally, I do not intend to belabour the matter nor to cite in great detail all of the reasons for this conclusion. The plaintiff, as an intelligent person, has been able to read all affidavits filed and heard the argument of counsel for the defendant.

To begin with, the plaintiff applied to the Tax Court of Canada for an extension of time to serve upon the Minister of National Revenue, notices of objection in respect of his 1948 to 1979 taxation years inclusive, as well as his 1981 and 1982 taxation years. This application was opposed by the Minister of National Revenue. The hearing took place in Calgary, Alberta, before His Honour Judge Goetz of the Tax Court of Canada on November 17, 1986 and the application was dismissed by court order dated December 18, 1986. Incidentally, the issues raised in the statement of claim are in respect of reassessments of the plaintiff's 1949, 1950, 1951, 1952 and 1953 taxation years which were adjudicated upon by the Income Tax Appeal Board and the Exchequer Court of Canada by way of judgments rendered July 28, 1958 and November 12, 1959 respectively.

With respect to the 1980 taxation year, J. Woo of the Department of National Revenue, proposed to settle the matter in respect of the 1980 taxation year on the following basis:

(a) The capital gain realized upon the disposition of property in Calgary, municipally described as 1239 — 11 Avenue S.W., would still be included in the calculation of income for the plaintiff's 1980 taxation year.

(b) The V-Day value of the said property, being its fair market value as at December 31, 1981, would remain at $74,500.

(c) $6,250 claimed as outlays and expenses on the disposition of the said property would be allowed.

(d) Taxable capital gain would be reduced by $3,125, being one-half of the outlays and expenses allowed.

This was communicated by J. Woo to the plaintiff by letter dated March 1, 1985. The plaintiff accepted the proposed settlement. This was brought into effect by way of a further reassessment, notice of which was dated April 30, 1985.

With respect to the 1979 and 1981 taxation years, as earlier stated, the plaintiff applied to the Tax Court of Canada for an extension of time to serve upon the Minister of National Revenue, notices of objection in respect of his 1948 to 1979 taxation years inclusive, as well as his 1981 and 1982 taxation years. That application was dismissed by court order dated December 18, 1986 (Court No. 2709 (IT)). The applications were for the most part undated but received by the Court on December 10, 1985. More than one year and 90 days had elapsed and so the Tax Court had no jurisdiction to extend the time for filing notices of objection (see paragraph 167(5)(a) of the Income Tax Act).

Based on the relevant facts, it was not open to the plaintiff to launch a trial de novo. If paragraph 167(5)(a) of the Act effectively barred any action before the Tax Court of Canada, then one can no longer consider those taxation years. There is no jurisdiction in the Federal Court of Canada because the action was not brought within time limits imposed by the Income Tax Act.

The plaintiff's statement of claim is hereby struck and the defendant's motion is allowed with costs to the defendant.

Motion allowed.