Robert Kidd v. Minister of National Revenue, [1983] CTC 2747, 83 DTC 639

Christie, CJ:—This is an application by Dr Robert Kidd made pursuant to section 167 of the Income Tax Act (“the Act’) to extend the time within which a notice of objection may be served on the Minister of National Revenue in respect of the applicant’s 1981 taxation year.

The notice of assessment was mailed to Dr Kidd on August 30, 1982. By operation of subsection 165(1) of the Act, he had 90 days from August 30, 1982, to serve the Minister of National Revenue with a notice of objection. The applicant’s notice of objection is dated April 18, 1983, which, of course, is well beyond the allotted time.

Section 167 of the Act in its present form was enacted by Statutes of Canada 1970-71-72, c 63, s 1, and received Royal Assent on December 23, 1971. It became effective on January 1, 1972. During the ensuing decade, May 24, 1972 to May 30, 1983, Members of the Tax Review Board (“the Board”) which was replaced by the Tax Court of Canada, made a number of observations concerning section 167 with which I am in agreement and which I believe should be restated in light of the coming into existence of this Court on July 18, 1983. From what has been said by them, I refer in particular to: Savary Beach Lands Ltd et al v MNR, [1972] CTC 2608; 72 DTC 1497; Marvin Shore, Trustee of the Estate of Winegarden Paving Co Limited v MNR, [1974] CTC 2193; 74 DTC 1132; Robert Newton v MNR, [1981] CTC 2978; 81 DTC 905 and Robert Wright et al v MNR, [1983] CTC 2493; 83 DTC 447.

In Savary Beach the Honourable Keith Flanigan, who was then Chairman of the Board, said at 2608-9:

. . . I think that I should say for the record, and for the information of taxpayers generally, that this new provision (s 167) of the Act, which removes specific restrictions and opens the door, so to speak, for applications for late filing, is one that gives this Board considerable concern. It goes without saying that the provisions of section 61A of the old Act, which made it necessary for the delay to be the result of the incapacity of the taxpayer, were far more restrictive than the present section in the new Act, which removes that restriction and makes it possible for an application to be made where the fault, if such may be the term, in not filing within the prescribed time, is that of someone other than the taxpayer, individual or corporate.

This Board takes the position that the granting of an extension in time under section 167 will be the exception rather than the rule. Human frailty will no doubt give rise on occasion to unusual circumstances, such as those before the Board this morning, wherein it is fair and reasonable to grant such an extension. However, to simply grant such extensions and imply that all applications — where the breach is but a few days — will be granted, is to make a mockery of the period of limitations set down in the Act.

Therefore this Board will, in all cases, regardless of the time that passes between the limitation period in the Act and the filing of the application for extension of time, require exceptional circumstances before any such application will receive approval.

Two years later in Shore he said at 1132:

As was pointed out by me in Savary Beach Lands Ltd and Savary Resort Properties Ltd v The Minister of National Revenue, 72 DTC 1497, (1972) CTC 2608, applications such as this should not be granted as a matter of course but should only be granted under unusual circumstances.

In Newton, Cardin, TCJ, who was then Chairman of the Board, said at 905-6:

An application for a time extension cannot be allowed unless all the conditions Stipulated in section 167 of the Act are met. In addition to the conditions in section 167(3) concerning the procedure to be followed in making an application for an extension, and the obstacles preventing such applications from being made, as set out in section 167(5)(a) and (b) of the Act, which is not at issue in the present case, the remaining conditions must still be applied.

He added:

It is clear that the applicant bears the burden of proof concerning the facts he submits to the Board in order to obtain the requested extension.

In Wright, Bonner, TCJ, who was then a Member of the Board, said at 447:

... The general rule as laid down in section 165 of the Act is that a notice of objection must be served by mailing within a period of ninety days from the day of mailing of the notice of assessment. Section 167 is intended to afford relief in cases where, in the opinion of the Board, it is just and equitable to extend the time.

Subparagraph 167(5)(c)(ii), which is the provision on which my decisions in the present cases turn, must be read in light of the ninety-day rule which is one of general application and of the fact that section 167 operates by way of exception to that general rule. Strict compliance with the requirements of section 167 is needed. Subparagraph (5)(c)(ii) imposes a requirement for prompt remedial action as soon as the need for such action becomes evident and such action can reasonably be taken.

In the application to extend time which Dr Kidd forwarded to the Registrar of this Court pursuant to subsection 167(3) of the Act, he stated, inter alia:

It is hard for me to take seriously all the government “junk mail” that arrives at this house. At about the same time I was receiving very confusing notices from the Tax Department with regard to source deductions for a summer employee.

At the hearing he reiterated that he had had considerable correspondence regarding an employee with National Revenue which he described as being of a computer printout type, which is similar in form to the notice of assessment. This led to confusion. He said the notice of assessment was “left in a pile for my accountant”. Dr Kidd also said that he was not aware of the 90 day deadline until February 1983 when the matter was brought to his attention by his accountant. He added that he is not a negligent person and he has always endeavoured to keep up to date in relation to his business affairs. During the course of cross-examination he acknowledged the notice of assessment that had been sent to him and the notice on the back thereof concerning objecting to the assessment.

In my view, the foregoing does not constitute special circumstances of the kind that would warrant the granting of an extension of time for serving the notice of objection. Consequently, the application is dismissed.

Application dismissed.