Date: 19980401
Docket: 97-158-CPP
BETWEEN:
FLEETWAY CONSULTING SERVICES INC.,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
Reasons for Order
Lamarre Proulx, J.T.C.C.
[1] This is a motion by the Respondent for the dismissal of an appeal brought pursuant to section 28 of the Canada Pension Plan (the "Act") or (the "CPP"), on the basis that the Appellant has not, in the first place, appealed to the Minister of National Revenue (the "Minister"), for a reconsideration of the assessment as required by subsection 27(2) of the Act.
[2] For ease of comprehension of this discussion, I will now reproduce subsections 27(1), 27(2), 27(3), 27(4), 27(5) and 28(1) of the Act:
27(1) Where any question arises under this Act as to whether a person is required to make a contribution as an employee for a year, or as an employer with respect to an employee for a year, or as to the amount of any such contribution,
(a) the employee, the employer or the representative of the employee or employer may, on or before April 30 in the immediately following year, apply to the Minister to determine the question; or
(b) the Minister on his own initiative may at any time determine the question.
(2) Where the Minister has assessed an employer for an amount payable by him under this Act, the employer or his representative may appeal to the Minister for a reconsideration of the assessment, either as to whether any amount should be assessed as payable or as to the amount so assessed, within ninety days of the day of mailing of the notice of assessment.
(3) Where a question specified in subsection (1) is to be determined by the Minister
(a) pursuant to an application by an employee or his representative, the Minister shall notify his employer, or the representative of his employer,
(b) pursuant to an application by an employer or his representative, the Minister shall notify the employee specified in the application or his representative,
(c) on his own initiative, the Minister shall notify the employer or his representative and any employee who may be affected by the determination or his representative, or
(d) pursuant to an appeal under subsection (2), the Minister shall notify any employee who may be affected by the determination or his representative,
of his intention to determine the question and shall afford to the employer and employee affected or either of them or the representatives of both or either of them, as the circumstances require, an opportunity to furnish information and to make representations to protect their interests.
(4) An application for the determination of a question or an appeal for reconsideration of an assessment by the Minister shall be addressed to the Chief of Appeals in a District Office of the Department of National Revenue and delivered or mailed to that office.
(5) On an application or an appeal under this section, the Minister shall, with all due dispatch, determine the question raised by the application or vacate, confirm or vary the assessment, or re-assess, and he shall thereupon notify any employee affected or his representative and the employer or his representative.
...
28(1) An employee or employer affected by a determination by or a decision on an appeal to the Minister under section 27, or the representative of either of them, may, within ninety days after the determination or decision is communicated to that employee or employer, or within such longer time as the Tax Court of Canada on application made to it within those ninety days may allow, appeal from the determination or decision to that Court by sending a notice of appeal in prescribed form by registered mail to the Registry of that Court.
[3] For the purpose of the motion, an affidavit was filed by Ms. Ginette Murray. She also gave viva voce evidence. She is a litigation officer with Revenue Canada. She stated that there was no determination made by the Minister pursuant to subsection 27(1) of the Act. The only thing that was done was the issuing of a Notice of Assessment on March 25, 1997 (Exhibit R-1). This Notice of Assessment was not appealed at the Minister's level as required by subsection 27(2) of the Act. As regards the Unemployment Insurance Act, hereinafter sometimes referred to as (the "UI"), the appeal process had been completed. On February 6, 1997, there was an appeal to the Minister with respect to Ruling No. 10-96-1480, dated November 29, 1996. This ruling referred only to the insurability of Mr. Hung Tong's employment from April 15, 1996 to August 30, 1996. The ruling and the appeal to the Minister were filed as Exhibit R-2.
[4] An affidavit was filed by Ms. Bernice Marien in support of the Appellant (the Respondent on this motion). She gave evidence at the hearing. She is a chartered accountant working with a private firm of accountants as a senior tax manager. The Appellant had secured that firm's services to provide assistance with determining the status of Mr. Hung Tong, that is, whether he was an employee or a self-employed person. Ms. Marien stated that she had had a telephone conversation with a Mr. Stewart of Revenue Canada on March 5, 1997. Mr. Stewart told her that he had been assigned the task of issuing an assessment under both the CPP and the Unemployment Insurance Act. She also testified that during their conversation, Mr. Stewart never indicated that there was a separate appeal process under the CPP. Indeed Exhibit R-1, which is the Notice of Assessment issued March 25, 1997, includes the two amounts in the same document. In further dealings Ms. Marien had with Mr. Stewart or other representatives of the Minister, she was never advised that there was a distinct appeal process under each of the two acts.
[5] Mr. John Fleck, an engineer and president of the Appellant, also filed an affidavit for the purpose of responding to the present motion. He and his wife, the Appellant's vice-president, had met Mr. Stewart on March 12, 1997. Mr. Fleck's testimony was to the same effect as Ms. Marien's, namely that although the two parties discussed CPP and UI assessments, no mention was ever made to him or his wife that the assessment and appeal processes were different for the two acts. He therefore took the Minister's decision of May 20, 1997 made in response to the Appellant's appeal to the Minister, dated February 6, 1997, to have been made further to the discussion on CPP contributions and UI premiums, and not only made pursuant to the Unemployment Insurance Act, as in fact it was made.
[6] Counsel for the Applicant stated it was the Minister's position that there was a decision made with respect to the insurability of Mr. Tong's work with the Appellant and that that decision was properly appealed in accordance with the provisions of the UI act. However, with respect to the purported appeal under the CPP, it was the Minister's position that the assessment, the notice of which was filed as Exhibit R-1, had not been properly appealed. Counsel for the Applicant referred the Court to subsection 27(2) of the CPP and stated that no appeal to the Minister for reconsideration of the assessment was made by the Appellant. She also indicated that on the back of the Notice of Assessment (Exhibit R-1), and more particularly in the third paragraph, employers are duly notified that an appeal may be made within 90 days of the mailing of the Notice of Assessment.
[7] Counsel for the Respondent on the motion referred the Court to paragraph 27(1)(b) of the CPP and submitted that in the instant appeal the assessment could be considered as a determination made by the Minister on his own initiative. She referred to the decision of Garon, T.C.J. in Agpro Services Inc. v. M.N.R. [1997] T.C.J. No. 1200, in which it was found that there were two avenues open to the Minister for making known his decision: the determination avenue and the assessment avenue. She submitted that the CPP prescribed no particular form for obtaining a determination and that the Minister did make the determination contemplated in paragraph 27(1)(b) when he assessed the Appellant.
[8] Counsel for the Respondent on the motion asked the Court, in the event the Court should find that there was no determination, to recommend to the Minister that the decision regarding the UI be binding with respect to the CPP. Counsel also asked for the costs of the motion.
[9] On this last point, counsel for the Applicant referred the Court to the decision of the Federal Court of Appeal in Attorney General of Canada v. Skimming, [1996] F.C.J. No. 734, dated May 29, 1996. This decision states that a court cannot award costs unless there is specific statutory authorization to do so. As no such authority is given in the Act, costs cannot be awarded here.
Conclusion
[10] An assessment cannot be identified with a determination under subsection 27(1) of the Act. As stated by Garon, T.C.J. in the above-mentioned decision, there are two avenues open to the Minister for making known his decision. But these avenues constitute two distinct legal means and are of a different legal nature. A determination has to do with whether a person is required to make a contribution and in what amount. An assessment is the requirement to pay the amount of contributions owed. An assessment is made by the Minister pursuant to subsection 27(2) of the Act and the first step of the appeal process is to appeal to the Minister pursuant to that same subsection.
[11] Having regard to the determination aspect, there was no evidence of any determination made on an application by the employer, nor was there any evidence of a determination made proprio motu by the Minister. Any such determination would, in any event, have required that the Minister meet the requirement of paragraph 27(3)(c) of the Act.
[12] Subsection 28(1) of the Act clearly states clearly that an appeal lies to this Court only from a determination or from a decision on an appeal to the Minister under section 27. Therefore, the inescapable conclusion is that the appeal to this Court pursuant to section 28 of the Act has not been validly instituted. Counsel for the Appellant stated, regarding the assessment, that there was no appeal under the UI act either. That may be so, but the appeal before me as to whether there was insurable employment is properly before this Court.
[13] The Applicant's motion is granted and the appeal pursuant to section 28 of the Act is dismissed. As to the costs, based on the decision of the Federal Court of Appeal in Skimming (supra), none can be awarded. In view of the outcome of the appeal under the Unemployment Insurance Act, there is no need to make the recommendation sought, although if the outcome had been different I would not have hesitated to make a strong recommendation along the lines requested for by counsel for the Respondent on the motion.
Signed at Ottawa, Canada, this 1st day of April, 1998.
"Louise Lamarre Proulx"
J.T.C.C.