Date: 19980605
Docket: APP-274-97-IT
BETWEEN:
2318-2256 QUÉBEC INC.,
Applicant,
and
HER MAJESTY THE QUEEN,
Respondent.
Reasons for Order
Guy Tremblay, J.T.C.C.
[1] The following facts support the application for an extension of time. These facts were essentially confirmed by the testimony of Gilles Roberge, an accountant, André Therrien, the appellant's principal shareholder, and Claude Charpentier, an appeals officer from the respondent's Sherbrooke office. They read as follows:
[TRANSLATION]
(1) On November 18, 1996 a notice confirming the assessments made for the 1993 and 1994 taxation years was sent to the appellant;
(2) On or about November 26, 1996 the appellant sent its accountant, Gilles Roberge, the notice of confirmation of the assessments, dated November 18, 1996;
(3) The appellant was represented at all times in the instant case by its accountant, Gilles Roberge, in whom it placed full confidence; the accountant was responsible for following up on the file from the audit to the final settlement; he also assumed responsibility for proceedings at the objection stage and undertook to retain counsel for the appeal;
(4) On or about November 26, 1996 the taxpayer's accountant did contact my office to inquire about the possibility of retaining my services, though without confirming this, as appears from the enclosed transmittal slip . . . .
As Exhibit R-1, 10 pages of documents concerning the case were transferred to Serge Racine, including the Notice of Objection.
[TRANSLATION]
(5) At the same time, the accountant entered into negotiations with a Revenue Canada representative, Claude Charpentier; however, these negotiations were unsuccessful and the accountant failed to contact the law firm to commence the appeal . . . .
This is confirmed by Gilles Roberge's testimony.
[TRANSLATION]
(6) On or about February 16, 1997 the time to appeal expired;
(7) On or about April 23, 1997 the taxpayer, which believed that action on its case had been completed, learned as appears from a letter from Nicole Dion to the taxpayer's accountant that its case was now at the collection stage rather than at that of an appeal;
(8) At this point the accountant consultant again contacted my firm, on or about May 5, 1997, to confirm the instructions, as appears from a second transmittal slip . . . .
Exhibit R-2: facsimile from Mr. Roberge to Mr. Racine of seven documents concerning this matter.
[TRANSLATION]
(9) On or about June 23, 1997 my firm sent the Court and Claude Charpentier of the Appeals Division, Sherbrooke office, an application for an extension of time and a Notice of Appeal . . . .
However, the Court's stamp shows July 9, 1997 as the date on which the document was received.
[TRANSLATION]
(10) The lapse of time between May 5 and June 23, 1997 was due to the fact that my firm moved and its staff was reorganized at that time; we moved our premises and hired new staff as of June 1, 1997;
(11) At all times relevant hereto the taxpayer acted as a diligent and responsible individual by entrusting the handling of its case, at the first available opportunity, to professionals, and the delay was entirely attributable to those professionals; moreover, the taxpayer reacted immediately when it learned that its file had not been dealt with as planned . . . .
This is confirmed by Mr. Therrien's testimony. He said he was not informed of the respondent's decision to confirm the assessment until the claim was received, after the appeal period had expired.
[TRANSLATION]
(12) Revenue Canada will suffer no loss due to this application for an extension of time, since in the event that the assessment is confirmed the taxpayer will be required to pay the accrued interest;
(13) The taxpayer has sound arguments to make in support of its appeal and it would be contrary to the interests of justice to dismiss the application for an extension of time, which in all justice and equity should be allowed;
(14) The respondent was notified of the facts set out in the instant amended application in a letter dated November 5, 1997 to Alain Gareau, counsel for the respondent at the time.
Accordingly, may it please the Court:
TO ALLOW this amended application for an extension of time in which to file an appeal;
THE WHOLE without costs.
Date: [not indicated]
Serge M. Racine, Attorney, M. Fisc.
Counsel for the appellant
3030 Boul. Le Carrefour, Suite 1002
Laval, Quebec H7T 2P5
(514) 688-5400
To: Registrar
Tax Court of Canada
200 Kent Street
Ottawa, Ontario
K1A 0M1
[2] As his substantive argument counsel for the appellant maintained that through its principal shareholder his client had done everything within its power by entrusting the tax problem to its accountant, and subsequently to counsel.
[3] The respondent, for her part, relied on the 1985 decision in Garry R. Harris (APP-1079(IT)), which concerned the 1980 and 1981 taxation years. The present wording of s. 167(5) is different from the provision applicable in 1980 and 1981.
[4] Section 167(5) of the Act reads as follows:
167. (5) When order to be made. No order shall be made under this section unless
(a) the application is made within one year after the expiration of the time limited by section 169 for appealing; and
(b) the taxpayer demonstrates that
(i) within the time otherwise limited by section 169 for appealing the taxpayer
(A) was unable to act or to instruct another to act in the taxpayer's name, or
(B) had a bona fide intention to appeal,
(ii) given the reasons set out in the application and the circumstances of the case, it would be just and equitable to grant the application,
(iii) the application was made as soon as circumstances permitted, and
(iv) there are reasonable grounds for the appeal.
[5] The requirement of section 167(5)(a) of the Act has been met.
[6] The Court finds that the appellant did in fact instruct someone to act within the meaning of s. 167(5)(b)(i). There was a failure, a human error. However, that error did not eliminate the final condition of the subparagraph: "had a bona fide intention to appeal". This condition was clearly met in the instant case. Though counsel was not officially instructed, he received a notice from the appellant's accountant in this regard on November 26, 1996 ([1] (4)).
[7] There are reasonable grounds for the appeal within the meaning of s. 167(5)(b)(iv) of the Act.
[8] In the Court's opinion the requirements of ss. 167(5)(b)(ii) and (iii) of the Act have been met.
Conclusion
[9] The application is allowed.
Signed at Québec, Quebec, June 5, 1998.
"Guy Tremblay"
J.T.C.C.
[OFFICIAL ENGLISH TRANSLATION]
Translation certified true on this 16th day of October 1998.
Stephen Balogh, revisor