Robert Bourdon v. Minister of National Revenue, [1984] CTC 2654, 84 DTC 1411

Rip, TCJ:—An order extending the time within which an appeal to this Court from an income tax assessment for 1981 may be instituted was made at the conclusion of the hearing of this application. In granting the order I referred to reasons given by Judge Cardin in Naoto Kondo et le Ministre de Revenu National (not published, App No 4157) which held that where a notice of objection was not made within the time limited by section 165 of the Income Tax Act solely because of the negligence of the taxpayer’s professional adviser it was just and equitable to make an order extending the time for objecting. At request of counsel for the respondent the reasons for granting the order are being reduced to writing.

Without labouring the facts in this matter it is clear that, because of the negligence of the applicant’s advisor, a chartered accountant, the applicant’s notice of appeal to this Court from a notice of assessment for 1981 was filed 42 days late, notwithstanding that the applicant did all in his power to insure that his adviser would file a notice on time.

Mr Kondo was also victim of his accountant’s negligence: despite his efforts and the efforts of his wife his accountant failed to file a notice of objection within the required time. In granting Mr Kondo an extension within which to file a notice of objection Judge Cardin relied on the Supreme Court of Canada judgments of Cité de Pont Viau v Gauthier Manufacturing Limited, [1978] 2 SCR 516 and Murray Bowen v City of Montreal, [1979] 1 SCR 511.

In the Cité de Pont Viau and Bowen cases the Supreme Court upheld the principle that a party must not be deprived of his rights on account of an error of counsel where it is possible to rectify the consequences of such error without injustice to the opposing party, (vide Bowen p 519, per Pigeon, J).

In Cité de Pont Viau the Supreme Court held that under the provisions of article 523 of the Quebec Code of Civil Procedure,* [1] where an appeal is involved, for the Court to grant leave to appeal after the time has expired the appellant does not have to prove that it was absolutely impossible to file the appeal, only that it was relatively impossible. In that case a foreclosure from appealing was due solely to the error of the appellant’s counsel. The party itself acted with diligence and it was not clear what more could have been done in order to act sooner. The Court found the impossibility of acting must be assessed from the point of view of the person who will have to bear the consequences of the foreclosure if he is not relieved from them.

Judge Cardin adopted the reasons of the Supreme Court and granted Mr Kondo an extension in which to file his notice of objection, notwithstanding his previous decision in Arnone v MNR, ([1979] CTC 2006; 79 DTC 22), which was relied on by the respondent in this application.

In Arnone the Tax Review Board, per Chairman Cardin, as he then was, denied an application for an extension of time to object to a notice of assessment where failure to object within a statutory time limit was due to the negligence of the applicant’s accountant. For the attitude of the Tax Review Board in respect of applications under section 167 see the reasons of K A Flanigan, QC, then Chairman of the Tax Review Board, in Savary Beach Lands Ltd and Savary Resort Properties Ltd v MNR, ([1972] CTC 2608; 72 DTC 1497).

Surely Parliament did not intend section 167 to be exploited by professional advisers as a license to commit negligence or as a statutory policy of liability insurance. But this is the result if the Court grants an extension within which to file a notice of objection or a notice of appeal once negligence of taxpayer’s adviser is found to be the reason a notice of objection or notice of appeal has been filed late.

In Canada Steamship Lines Limited v MNR, ([1966] CTC 255; 66 DTC 5205) Jackett, P, then President of the Exchequer Court, felt compelled to follow two previous decisions by other judges of the Exchequer Court since “I think I am bound to approach the matter in the same way as a similar problem was approached in each of these cases until such time, if any, as a different course indicated by a higher Court. When I say bound, I do not mean I am bound by any rule of stare decisis but my own view as a desirability of having the decisions of this Court follow a consistent course as far as possible” (p 259 [5208]).

Accordingly I granted an extension of time within which the applicant may file a notice of objection to his notice of assessment for 1981.

Application granted.