Date: 20031017
Docket:T-669-02
Citation: 2003 FC 1207
OTTAWA, ONTARIO, FRIDAY, THIS 17TH DAY OF OCTOBER, 2003
PRESENT: THE HONOURABLE MADAM JUSTICE SNIDER
BETWEEN:
WILL-SHER CONSTRUCTION LTD.
Appellant
- and -
MINISTER OF NATIONAL REVENUE
Respondent
REASONS FOR ORDER AND ORDER
SNIDER J.
[1] Will-Sher Construction Ltd., (the "Applicant") operated a coin-operated devices business from 1983 until mid-1997, when the business was sold. Commencing January 1, 1991, the Applicant collected GST and remitted it to the Receiver General in accordance with certain provisions in the Excise Tax Act (Canada), R.S.C. 1985, c. E-15 ("ETA") and continued doing so until the business was sold.
[2] In 1997, Tremblay, T.J.C. held that a taxpayer making supplies through coin-operated devices, such as those of the Applicant in this case, was exempt from collecting GST on the supplies made from the vending machines (Distribution Lévesque Vending (1986) Ltée v. Canada, [1997] T.C.J. No. 338 (T.C.C.)(QL)). To ensure consistent treatment for all operators of such coin-operated devices, (both those who had remitted the GST and those who had not), on March 4, 1999, the Governor in Council enacted a remission order (the "Remission Order") pursuant to subsection 23(2) of the Financial Administration Act (Canada), R.S.C. 1985, c. F-11 ("FAA"). Section 2 of the Remission Order entitled registrants, such as the Applicant, to the remission of GST for the reporting period of January 1, 1991 to April 23, 1996. This entitlement was subject to section 5 of the Remission Order:
| 5. A remission shall be granted if a registrant files an application in writing for the remission with the Minister of National Revenue not later than two years after the day on which this Order is made, except to the extent to which the amount has otherwise been rebated, credited or remitted to the registrant under the Act or the Financial Administration Act. |
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5. La remise est accordée à la condition que l'inscrit dépose une demande écrite à cet égard au ministre du Revenu national dans les deux ans suivant la prise du présent décret, dans la mesure où la somme visée par la demande ne lui a pas déjà été remboursée, créditée ou remise en application de la Loi ou de la Loi sur la gestion des finances publiques. |
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[3] On September 16, 1999, after becoming aware of the availability of the remission, the Applicant applied to the Canada Customs and Revenue Agency ("CCRA") for a rebate of $157, 587.71 in GST paid for the period of January 1, 1994 to June 1, 1997. This application was approved by CCRA and the amount claimed remitted to the Applicant.
[4] The Applicant subsequently learned in January 2001 that it could make a GST remission claim for remittances made as far back as 1991 and, on March 21, 2001, submitted another application to the CCRA claiming a GST rebate of $140, 858.10 for the period from March 30, 1991 to December 31, 1993.
[5] On June 20, 2001, the Applicant's second application was denied in full . The reasons given were as follows:
"The filing deadline date in accordance with the Remission Order was March 5, 2001. Your application was received on March 29, 2001."
[6] The Applicant seeks judicial review of this decision of the Minister of National Revenue ("Minister") to deny the second application.
Issues
[7] This application raises the following issues:
1. Did the Minister err in interpreting section 5 of the Remission Order in such a way as to deny the Applicant recovery of GST paid for the period 1991 to 1993?
2. Was the Minister unjustly enriched?
3. Did the Minister make a patently unreasonable error by failing to find that the second Rebate Application was an amendment to the first Rebate Application?
Analysis
Preliminary Matter: What is the applicable standard of review for the decision of the Minister?
[8] In this case, the only matter for review is whether the Minister made an error of law in interpreting the condition in the Remission Order. There is less deference given to decision makers when making determinations of law. In this case, it is not necessary for me to determine whether the standard is correctness (as in Canada (Attorney General) v.Mossop, [1993] 1 S.C.R. 554, [1993] S.C.J. No. 20 (QL); Housen v. Nikolaisen, [2002] 2 S.C.R. 235, 2002 SCC 33, [2002] S.C.J. No. 31 (QL)) or otherwise, since I have determined that the Minister interpreted the section correctly in denying the rebate to the Applicant. My reasons follow.
Issue 1: Did the Minister err in interpreting section 5 of the Remission Order in such a way as to deny the Applicant recovery of GST paid for the period 1991 to 1993?
[9] Section 5 of the Remission Order appears to be clear and unambiguous. This provision places an obligation on the Minister to rebate the GST in question. However, the obligation of the Minister only arises if an application is made "not later than two years after the day on which this Order is made".
[10] The Applicant urges me to interpret this provision as requiring the Minister to accept the application whenever filed. First, the Applicant submits that section 5 of the Remission Order is not a "condition" as contemplated by subsection 23(5) of the FAA. In so arguing, the Applicant refers to the definition of "condition" in Black's Law Dictionary, 4th ed. (Wester Publishing Co.: St. Paul, 1968), which describes a condition as:
"A qualification, restriction, or limitation modifying or destroying the original act with which it is connected; an event , fact, or the like that is necessary to the occurrence of some other, though not its cause; a prerequisite; a stipulation."
[11] Since this is, according to the Applicant, not a "condition", the Remission Order must be considered to be "unconditional" and the Applicant entitled to receive its rebate.
[12] I do not agree with this interpretation. While the Applicant is correct that this "condition" does not appear to fit within the Black's definition, it does not follow that the Remission Order was "unconditional". Indeed, in my view, the question of whether this is a condition or not is likely not determinative.
[13] The proper interpretation of this section does not turn on whether or not this is a condition. Contrary to the submissions of the Applicant, there is no ambiguity in section 5. It is very clear that the Governor in Council directed in unequivocal language that the rebate was only to be paid if an application was received within the two-year defined period. If an application is made after March 5, 2001, the section simply does not apply and the Minister has no authority or discretion to make a rebate. Having set the clear limit in the first place, only the Governor in Council could extend the period for applications. He did not do so. To read section 5 or the relevant provisions of the FAA in any other way is to torture the language of the Remission Order beyond reason.
[14] The Applicant submits that this cannot have been the intended result of the Remission Order that was enacted to relieve the unjustness of the collection of the GST. Once again, I disagree with the Applicant's characterization of the two-year limit. The Governor in Council, acting in the best interests of all Canadians, defined a two-year window of opportunity for those Canadians adversely affected by the collection of GST. The time limit was not excessively or unjustly brief. At the end of the period, the government could carry on with its financial planning with the certainty that there would be no more claims for rebate. This balancing of fairness to individual taxpayers and the needs of certainty for sound fiscal planning in the interests of all Canadian taxpayers is an essential element of the power of the Governor in Council to enact remission orders. A two-year limit on the Remission Order is in harmony with the Governor in Council's responsibilities under the FAA.
[15] I agree that the result of this interpretation will be that not all taxpayers will be afforded the same treatment; those who met the deadline will receive their rebates and those who filed after March 5, 2001 will not. Consistent treatment of taxpayers in similar circumstances is a laudatory goal. However, it is equally arguable that extending the deadline on some discretionary basis can also lead to discretionary treatment. Section 5, interpreted as I believe it must be, provides for consistency in that all owners of coin-operated devices who file their GST rebate application after the two year deadline will be treated equally by the Minister, in that their application will be denied.
[16] In conclusion on this issue, the Minister did not err in his interpretation of the Remission Order.
Issue 2: Was the Minister unjustly enriched?
[17] The Applicant submits that, if the Court accepts the Minister's interpretation of section 5 of the Remission Order, the Minister will receive an inequitable "windfall".
[18] For an enrichment to be unjust, three elements must be satisfied. There must be an enrichment, a corresponding deprivation and the absence of a juristic reason for the enrichment (Peter v. Beblow, [1993] 1 S.C.R. 980, [1993] S.C.J. No. 36 (QL)). I agree that, in these circumstances, the Minister was enriched and the Applicant was correspondingly deprived. However, in my view, there is a juristic reason for the enrichment; thus the third element is not satisfied. The legislation provides a complete code for the rebate of the amount paid in error.
[19] The Applicant makes much of its lack of knowledge concerning the Remission Order. Ignorance of the law should not be considered a valid reason for the Court to exercise its equitable jurisdiction. The Remission Order was a matter of public record. Moreover, the Applicant certainly became aware of the existence of a Remission Order once it filed its first application on September 16, 1999. Rather than read the Remission Order, the Applicant relied on an acquaintance to inform itself of the contents of the Order. Sixteen months later, through mere happenstance, the Applicant discovered that it could have applied for a remission of GST that was collected during an earlier period of time. Although I sympathize with the Applicant, I do not think that this is a case where the Court should exercise its equitable jurisdiction. To do so would be to interfere with a legislative scheme that provided adequate notice to the Applicant.
Issue 3: Did the Minister make a patently unreasonable error by failing to find that the second Rebate Application was an amendment to the first Rebate Application?
[20] The Applicant submits that the second application was simply an amendment to the first application which was filed within the prescribed time limits. . In part, this argument is based on the definition of the words "amend" and "amendment" (Black's Law Dictionary, 4th ed. (Wester Publishing Co.: St. Paul, 1968)). Using this definition, the Applicant submits that the second Rebate Application was clearly an improvement of the first Rebate Application, an attempt to cure the initial defect in the first Rebate Application, which occurred due to the Applicant's lack of information. Thus, the Applicant argues, the CCRA's determination that the second Rebate Application is a separate application for GST remission made after March 5, 2001 is a reviewable error of fact.
[21] I question whether the Applicant ever considered the second application to be an amendment. The evidence appears to lead to a conclusion that the second application was a new application and not simply a clarification of or amendment to the first. The Applicant checked the "no" box on the second Rebate Application in response to the question: "Is this amending a previous application?". Thus, the Applicant itself considered the second application to be a separate and distinct application.
[22] In any event, it is reasonable to conclude that, after an application for GST remission has been satisfied, meaning the Minister makes a payment to the Applicant, it is no longer active and, therefore, cannot be amended sixteen months later.
[23] There is no reviewable error on this issue.
Conclusion
[24] In conclusion, this application should not succeed for the reasons that:
1. The Minister properly interpreted the provisions of the Remission Order in denying the application filed after the two-year deadline set out in section 5 of the Remission Order.
2. The circumstances of this case did not lead to unjust enrichment.
3. The second application that was denied was a new application made after the deadline established by the Remission Order.
Costs
[25] The Respondent requests that, if successful, I award costs in the amount of $1814.80 as set out in the Respondent's Bill of Costs. The Applicant submits that, if the Applicant is not successful, I should take note of the fact that this is the first time that the interpretation of this Remission Order has been before the Court. In a similar situation (The Queen v. Cerescorp Inc. [1985] 2 F.C. 247 (T.D.) (QL)), Mr. Justice Joyal declined to award costs since "the terms of the Remission Order have not before been scrutinized by this Court".
[26] In Cerescorp, supra, in addition to the fact that the matter was being considered by the Court for the first time, I note that the issues were exceedingly complex and that the parties were left with the task of jointly drafting a complex order. Accordingly, I do not think that, in this case, I would exercise my discretion to relieve the Applicant of all costs. Nevertheless, I am prepared to exercise my discretion to award costs in a fixed amount of $900.
ORDER
THIS COURT ORDERS THAT:
1. The application for judicial review is dismissed;
2. Costs are awarded to the Respondent in the fixed amount of $900.
"Judith A. Snider"
__________________________
Judge
FEDERAL COURT
NAMES OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: T-669-02
STYLE OF CAUSE: WILL-SHER CONSTRUCTION LTD. v.
MINISTER OF NATIONAL REVENUE
PLACE OF HEARING: CALGARY, ALBERTA
DATE OF HEARING: FRIDAY, OCTOBER 15, 2003
REASONS FOR ORDER
AND ORDER: THE HONOURABLE MADAM JUSTICE SNIDER
DATED: FRIDAY, OCTOBER 17, 2003
APPEARANCES:
MR. JONATHAN D. WARREN FOR APPLICANT
MR. JOHN O'CALLAGHAN FOR RESPONDENT
SOLICITORS OF RECORD:
WARREN TETTENSOR LLP FOR APPLICANT
CALGARY, ALBERTA
MR. MORRIS ROSENBERG FOR RESPONDENT
DEPUTY ATTORNEY GENERAL OF CANADA