Words and Phrases - "undue delay"
International Hi-tech Industries Inc. v. The Queen, 2018 TCC 240
The auditing firm (“DMCL”) for the appellant obtained the agreement of the appellant, as evidenced by a December 7, 2007 email sent by DMCL to the appellant, to fix the audit fee at a level higher than that originally estimated. In discussing, without concluding, whether DMCL had unduly delayed issuing its invoice after providing its audit opinion on January 23, 2008, Sommerfeldt J first noted (at para. 57):
It appears that the original intention of the Department of Finance, in drafting paragraph 152(1)(b) of the ETA, was that undue delay would be determined by reference to the usual invoicing practices of the particular supplier.
He then stated (at paras. 59-61):
… Spur Oil … indicated that … the word “undue” should be given its dictionary meaning of “excessive.”
[Lacroix, 2011 FCA 128, at para. 32] confirmed that, even in a situation where the performance of a contractual supply is only partially completed, it is possible for the issuance of an invoice to be unduly delayed … .
...[I]t is noteworthy that on February 18, 2008, DMCL issued an invoice to IHI in respect of a report that DMCL had issued on January 23, 2008. In other words, the invoice was issued only 26 days after the report was issued. On the other hand, it appears that DMCL stopped working on the audit of IHI’s financial statements in November or December 2007, but did not issue an invoice until June 19, 2008, a delay of approximately five or six months.
|Locations of other summaries||Wordcount|
|Tax Topics - Excise Tax Act - Regulations - Input Tax Credit Information (GST/HST) Regulations - Section 3 - Paragraph 3(a) - Subparagraph 3(a)(ii)||invoice not issued if not sent||244|
|Tax Topics - Excise Tax Act - Section 169 - Subsection 169(1)||no contractual nexus between ITC claimant and supplier||265|
|Tax Topics - Excise Tax Act - Section 168 - Subsection 168(9)||possible deposits subsequently may have been applied by agreement as payments on account||233|
|Tax Topics - Excise Tax Act - Section 221 - Subsection 221(2)||unregistered purchaser||35|
|Tax Topics - Excise Tax Act - Schedules - Schedule V - Part I - Section 9 - Subsection 9(2)||sale by corporation not exempted||30|
Canada v. Canadevim Ltée, 2011 GSTC 62, 2011 FCA 128
The registrant completed 55% of the construction work on a golf course, for which it was not paid. A key sponsor of the project had died, and the work was interrupted. The registrant registered a legal hypothec on the land for $1.2 million, which it later withdrew on a settlement with the successor to its client. The Court affirmed the Minister's finding that the registrant owed GST on $1.2 million. In order to be entitled to register a hypothec, a claimant must have already demanded payment . It followed under s. 152(1) that payment was due to the registrant by the time the hypothec was registered.
The Court also noted in the alternative that the trial judge erred in finding that, because the work was only 55% completed, there was no undue delay in issuing an invoice. The trial judge had essentially applied the test in s. 168(3)(c) that consideration is not due until work is "substantially completed." Although s. 168(3)(c) only applies where there is an agreement in writing, she found that it was was reasonable to apply the same test in these circumstances. Before concluding that, in these circumstances, an invoice should have been issued for the partially completed work, Noël J. stated (at paras. 32-33):
The difficulty this reasoning raises is that according to the very terms of paragraph 152(1)(b), the issuing of an invoice may be unduly delayed even if the work has only been partially completed, since the provision speaks of an invoice "in respect of the supply for that consideration or part."
... [The trial judge] had to question whether, according to the evidence, an invoice had to be issued for the purpose of paragraph 152(1)(b) for the part of the work that had been carried out.