Michael C. James v. Her Majesty the Queen, [1996] 1 CTC 2789

Brulé J.T.C.C.: — The Applicant’s solicitor William G.D. McCarthy has brought this Motion for two reasons. First of all, it is submitted that the original judgment requires amendment in a particular on which the Court did not adjudicate pursuant to the provisions of Rules 172(1) and 172(2) of the Tax Court of Canada Rules (General Procedure). Secondly, the Applicant asks for an Order of this Court pursuant to the provisions of subsection 27(2) of the Federal Court Act extending the time for filing of a Notice of Appeal in the Federal Court of Appeal to a date ten days after the hearing of this Motion.

With reference to the first argument that the Applicant claims that the original judgment of the Court was wrong in that a matter which should have been dealt with in the judgment was either overlooked or accidentally omitted.

Subsequently, a Motion was brought before Sarchuk, J. dealing with the wrongs of the original judgment. The Applicant was asking Sarchuk, J. to grant an Order pursuant to the provisions of the Constitution Act and/or the Bill of Rights declaring the provisions of paragraph 167(5)(a) of the Income Tax Act to be inoperative. The Court ruled that such would require the Court to make a Declaratory Order which power the Tax Court of Canada does not have. Sarchuk, J. dismissed the Motion but suggested that the Court of Appeal might deal with the matter if another Application was made for an extension of time to commence such an appeal.

That is the purpose of this Motion. Subsection 27(2) of the Federal Court Act gives this Court the power to extend the time for the filing of a Notice of Appeal in the Federal Court of Appeal.

Subsection 27(2) of the Federal Court Act provides as follows:

An appeal under this section shall be brought by filing a notice of appeal in the Registry of the Court

(a) in the case of an interlocutory judgment, within ten days, and

(b) in any other case, within thirty days, in the calculation of which July and August shall be excluded,

after the pronouncement of the judgment or determination appealed from or within such further time as the Trial Division or the Tax Court of Canada, as the case may be, may, either before or after the expiration of those ten or thirty days, as the case may be, fix or allow.

A Judge of the Tax Court of Canada has the discretion, pursuant to subsection 27(2), to extend the time in which an Appellant may file a Notice of Appeal.

In The R. v. Guaranteed Homes Ltd., [1979] C.T.C. 190, 79 D.T.C. 5136 (FCTD), Smith, D.J. made the following comment when speaking of the power of the Court to grant an extension of time to appeal, at page (C.T.C. 191) 5136:

The power of the Court to grant an extension of time to appeal is discretionary. There are no rigid rules for determining when the extension should be granted. The decision is always to be made on the circumstances of the particular case, but there are guides to assist the Court in reaching the right decision. Thus in a number of cases it has been stated that the fundamental principle is to see that justice is donc.…

Deputy Judge Smith also reviewed the case law which has dealt with this issue and held that the following criteria should be considered when dealing with the question of when to grant an extension of time to file an appeal:

1. the Applicant must show a bona fide intention to appeal when he had the right to appeal;

2. that his failure to appeal within the delay was the result of a special circumstance which serves to excuse or justify such failure; and,

3. it must at least be arguable that the judgment appealed from is wrong.

I believe that in the case at bar, the situation is such that the extension should be granted.

The circumstances of the case seem to indicate that the Applicant had a bona fide intention to appeal within the prescribed time. The steps taken by the Applicant in this matter clearly indicate that his intention was always to pursue the matter.

Furthermore, it appears as though the Applicant’s failure to appeal within the time allowed was the result of special circumstances which serve to excuse or justify such a failure. The circumstances of this case are particular in that the Applicant was under the impression that if his argument with respect to the interpretation of the expression “notify” failed, he would be granted an extension of time in which to present further argument. When this did not happen, he brought a Motion to this Court. The Applicant will be given ten days to file an appeal with the Federal Court of Appeal.

With regards to the last criterion, in light of the fact that the Applicant wishes to raise a new argument, I believe it is at least arguable that the judgment being appealed from is wrong in that Counsel was not provided the time he believed was granted to him.

The fact that the Applicant wishes to raise a new argument at the appellate level is also of concern. With regards to the issue of whether a Court of Appeal can consider a new argument, Dickson J. summarizes clearly the general rule in À. v. Perka [1984] 2 S.C.R. 232, 13 D.L.R. (4th) 1, at page 240 (D.L.R. 8):

A party cannot, however, raise an entirely new argument which has not been raised below and in relation to which it might have been necessary to adduce evidence at trial...

This question was also considered by the Federal Court of Appeal in Tyler v. Minister of National Revenue (1990), [1991] 1 C.T.C. 13, 91 D.T.C. 5022, at page 17 (D.T.C. 5025):

Because only the construction of the subsection 241(3) was before the Trial Division and not its constitutionality, the respondent objects to the issue being dealt with in that it is raised for the first time upon the appeal. As a general rule, an appellate court ought not to deal with a point so raised “unless it be clear that, had the question been raised at the proper time, no further light could have been thrown upon it”: Lamb v. Kincaid (1907), 38 S.C.R. 516, at page 539 as cited by Duff C.J. in Thomson v. Lambert, [1938] S.C.R. 253, at page 269.

In the Tyler case, the Court held that the constitutionality of subsection 241(3) could not be raised for the first time on appeal because the Respondent would be prejudiced by not having the opportunity to adduce evidence of legislative facts supporting a section 1 Charter argument.

In the case at bar, unlike in the Tyler case, the new argument is not based on fact or evidence. The Applicant wishes to bring an argument based on the Canadian Bill of Rights. This is a law based argument which does not require or necessitate the bringing of new evidence. Consequently, it appears as though the Federal Court of Appeal will be free to consider the Applicant’s Canadian Bill of Rights argument.

This argument is rather significant to the provisions of section 167 of the Income Tax Act and should be clarified by the proper Court.

The Motion is dismissed.

Motion dismissed.