Bill Baxter v. Her Majesty the Queen, [1996] 3 CTC 2311 (Informal Procedure)

Bowman J.T.C.C. (orally): — These matters are proceeding under the informal provisions of the Act and I am of the opinion that the motion is one of sufficient importance that it has to be met. And it would appear that while there are appears evidence based on the photocopy material before me that reassessments were sent to the taxpayer at his only known address, and in fact an explanation was apparently sent by registered mail on May 3rd, 1994 and the reassessments were made September 9th, ‘94.

I don’t have any evidence before me that can provide me with proof of service by mail. The Act provides as I recall, that where the Act provides for sending a document by mail, an affidavit by an officer of the Department of National Revenue sworn to would be sufficient to prove the mail, but I don’t have that. And the taxpayer filed an appeal based on the claim that he did not know of any reassessment except when he was advised by Collections that they would be owing resulting from the reassessment.

Failing that evidence of service, I am of the opinion that at this point the original assessment stands and I am not hearing an appeal. There is a motion to have the process terminated and it would appear that that would be the appropriate action at this time.

The Department, by the filing of the objection, had notice of the fact that this was alleged in each of the years contested.

So, under the circumstances, I am going to grant the motion and — I’m not quite sure whether it will be allowing the appeal or just granting the motion to....

MR. TRENTADUE: Your Honour, we’d ask that you allow the appeal because there’s so much question of —

HIS HONOUR: If I allow the appeal, it means that I’ve made a decision on the facts and I haven’t heard any facts and the representations are such…

All right, the appeal is dismissed and the Respondent can take whatever action they wish — the appeal is granted.

THE REGISTRAR: Order. Court is now adjourned.

HEARING ADJOURNED AT 11.20 A.M.

UPON RESUMING AT 9.30 A.M.

THE REGISTRAR: The sitting of the Tax Court of Canada in the City of Toronto is now resumed. Be seated, please.

Three matters to be spoken to, three related matters, that were on the list for last Tuesday: Nos. 95-2601(IT)I, 95-2602(IT)I and 95-2603(IT)I. The Appellant in each case is Richard Baxter, represented by Mr. Trentadue; and the Respondent Her Majesty the Queen is represented by Ms Gina Remy.

HIS HONOUR: I understand that the problem is that there is some confusion as to how this matter was dealt with, whether we dealt with all three appeals or not, and I believe — my notes are not clear, unfortunately — but the motion referred to the years 1991 and 1992, that’s what I’m advised; is that correct?

MR. TRENTADUE: Your Honour, the original motion was to deal with all three of them, and that I argued the 1990 case, and your Honour will remember that you said that the Minister had filed that within the three- year period, but we just brought it up because we thought it was very unfair because everything was rushed through. And then we moved on to the other two years.

HIS HONOUR: Oh, I’m not quite clear then. In view of my decision that the Minister had proceeded properly with the assessment, then you are agreeing then it was an appropriate assessment?

MR. TRENTADUE: Yes, your Honour, we are —

HIS HONOUR: With regard to 1990?

MR. TRENTADUE: We agreed that it was — that you might have meant the law, your Honour, we don’t agree that it was appropriate because they didn’t give the —

HIS HONOUR: All right. All right. So then I find that, on the basis of that —

Do you have anything you wish to say about that, Ms Remy?

MS REMY: Your Honour, I’d just say we didn’t agree on anything that day. It was, they were arguing that we didn’t have proof of service; that was something that — for something that was required to be mailed, according to 165(3) and 244(5) of the Act.

However, the appeals...! was confused myself for which years you were dismissing, but 1990, as I understood it, was not in dispute.

HIS HONOUR: All right. That being the case then I can make a finding with regard to 1990 on the basis of the motion that there was some defect in the assessment. I find that there wasn’t, and that appeal will not be allowed.

With regard to 1991 and 1992, I disallowed the appeal — I mean, I allowed the appeal on the grounds that the reassessment had not been served upon the taxpayer. The reason for that was that in view of the representations made to me by the agent for the taxpayer, and that the Crown did not dispute that allegation in that they did not call the taxpayer to find out whether or not, and have him swear under oath. I took that to mean that their representations were in fact accepted. That is reason why I made the decision that I did.

So, therefore, as it stands now, there would be a dismissal of the appeal for 1990 and a granting of the appeal for 1991 and 1992.

MR. TRENTADUE: Your Honour, could I have a further clarification of the 1990. Since my client is not here to proceed with 1990 ... We were led to believe, the way the Court adjourned, that we in fact were allowed all three years and we went home with our files. Do we have another oppor tunity or is this ...

HIS HONOUR: No, I’m afraid that disposes of 1990.

MS REMY: Your Honour, with respect to the 1991 and 1992 taxation years, I was not given an opportunity to cross-examine the Appellant. I would have cross-examined him had that arisen, but a preliminary motion was put forth on something that was pleaded that was supposed to be a matter within the trial and I did not have the opportunity to even call the Appellant.

HIS HONOUR: Oh, yes, you could have called him. I didn’t preclude anybody from calling any witnesses.

MR. TRENTADUE: Your Honour, had she called him —I mean, this is all, you know, speculation. I guess we should stay away from that but

MS REMY: I object, your Honour. I wasn’t even served a Notice of Motion regarding the preliminary motion on Tuesday.

MR. TRENTADUE: Your Honour, a Notice of Motion isn’t necessary under the informal procedure. We asked the Court to —

MS REMY : I object, your Honour. It is necessary in this situation, and that was the crux of the —

HIS HONOUR: I must say that —

MR. TRENTADUE: Your Honour, you’ll recall that the point was raised in the Notice of Appeal and the Crown —

HIS HONOUR: That’s not notice of a motion.

I am, on reflection, of the opinion that this matter was not properly handled, probably to a great extent due to my loss of the direction as to which this matter was going.

This is an informal procedure and it appears to me that the procedure has been so informal that it has prejudiced the rights of both parties, and the findings that I made were inappropriate under the circumstances.

I have the right, under the Rules and the Act, to amend, change, otherwise deal with my judgment until it is signed. I am of the opinion that it is very appropriate in this case, in view of the situation, that the proceedings in this matter be nullified and that I am not prepared to give judgment at this time.

I am going to declare that I am not seized of the matter and the matter will be adjourned sine die for a new sitting.

Appeal dismissed with respect to employment expenses and allowed with respect to business losses.