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Docket: 2004-3189(IT)APP |
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BETWEEN: |
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RENÉ ARCHAMBAULT, |
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Applicant, |
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and |
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HER MAJESTY THE QUEEN, |
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Respondent. |
[OFFICIAL ENGLISH TRANSLATION]
____________________________________________________________________
Application heard on October 22, 2004, in Montréal, Quebec.
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Before: The Honourable Justice Paul Bédard |
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Appearances: |
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For the Applicant: |
The Applicant himself |
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Counsel for the Respondent: |
Agathe Cavanagh |
ORDER
Upon the application for an order extending the time within which a Notice of Appeal in respect of the assessments made under the Income Tax Act for the 1989, 1990, 1991 and 1992 taxation years may be served;
And upon hearing the parties' allegations;
The application in respect of the years 1989, 1990, 1991 and 1992 is dismissed in accordance with the attached Reasons for Order.
Signed at Ottawa, Canada, this 13th day of December 2004.
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"Paul Bédard" |
Bédard J.
Translation certified true
on this 14th day of February 2005
Jacques Deschênes, Translator
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Citation: 2004TCC714 |
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Date: 20041213 |
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Docket: 2004-3189(IT)APP |
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BETWEEN: |
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RENÉ ARCHAMBAULT, |
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Applicant, |
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and |
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HER MAJESTY THE QUEEN, |
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Respondent. |
[OFFICIAL ENGLISH TRANSLATION]
REASONS FOR ORDER
Bédard J.
[1] This is an application under subsection 167(5) of the Income Tax Act ("the ITA") for an order extending the time within which the applicant may institute an appeal from the decision of the Minister of National Revenue ("the Minister"). The Court must determine whether the application for an extension of the time to appeal, with respect to the 1989, 1990, 1991 and 1992 taxation years, is well-founded.
[2] The Minister sent notices of reassessment to the applicant on June 28, 1993, with respect to the 1989 taxation year; June 6, 1994, with respect to the 1990 taxation year; and April 19, 1995, with respect to the 1991 and 1992 taxation years.
[3] The applicant served his objections to the reassessments on the Minister on August 30, 1993, with respect to the 1989 taxation year; July 15, 1994, with respect to the 1990 taxation year; and May 24, 1995, with respect to the 1991 and 1992 taxation years.
[4] By registered letter mailed on September 25, 2003, the Minister notified the applicant that he was ratifying the reassessments dated June 28, 1993, with respect to the 1989 taxation year; June 6, 1994, with respect to the 1990 taxation year; and April 19, 1995, with respect to the 1991 and 1992 taxation years.
[5] The applicant did not commence an appeal to the Court within the prescribed time. That time expired on December 24, 2003, because the reassessments dated June 28, 1993, with respect to the 1989 taxation year; June 6, 1994, with respect to the 1990 taxation year; and April 19, 1995, with respect to the 1991 and 1992 taxation years, were all ratified on September 25, 2003.
[6] On July 28, 2004, the applicant filed with the Court an application to extend the time for instituting an appeal concerning the reassessments of June 28, 1993, with respect to the 1989 taxation year; June 6, 1994, with respect to the 1990 taxation year; and April 19, 1995, with respect to the 1991 and 1992 taxation years.
Analysis
[7] The applicant is an engineer specialized in the resolution of sound and vibration problems. He was self-employed.
[8] The applicant testified that he received, read and understood the Minister's letter, dated September 25, 2003 (Exhibit I-1), and sent him that day by registered mail. The letter ratified the reassessments of the applicant. It should be noted that the Minister attached to that letter a document setting out the appeal procedure that a taxpayer must follow if he disagrees with the Minister's decision and wishes to appeal that decision to the Court.
[9] The applicant testified that he met with his accountant Germain Dubuc on October 25, 2003. He explained that he gave Mr. Dubuc a series of documents, including the letter of September 25, 2003, at that meeting. He emphasized that he did not discuss this letter with Mr. Dubuc at the meeting; rather, he discussed other accounting and tax topics related to his business. The applicant admitted that he did not mandate Mr. Dubuc to appeal the Minister's decision dated September 25, 2003. The applicant believed that Mr. Dubuc would follow up on the letter he was handed, since he had settled the same matters with the provincial authorities some years earlier.
[10] Mr. Dubuc testified that he did receive the letter dated September 25, 2003, from the applicant, but that the applicant did not mandate him to appeal the Minister's decision. He explained that he never paid any special attention to the letter, and that the letter was not discussed with the applicant at any point prior to late February 2004. He believed the applicant's lawyers had the mandate to appeal the Minister's decision dated September 25, 2004, because they had represented the applicant in the same matter for previous taxation years.
[11] The applicant admitted that, toward late February or early March 2004, he realized he had not commenced an appeal within the allotted time. He came to this realization following conversations with lawyer Nader Khalil and with Douglas Atherton, one of the coordinators of a group of investors that participated in the research and development projects in which the applicant was involved. The applicant testified that he then had telephone conversations on the subject with Denis Pépin, an employee of this Court, and with Mr. Lemire of the Canada Customs and Revenue Agency. He admitted that he then received model originating documents for appeals.
[12] The applicant testified that he prepared the application for an extension of time to appeal himself, and then sent the application to Mr. Khalil in early February 2004 so that he could revise it, prepare the Notice of Appeal and file it in the Court. The applicant explained that he did not have the time to do this until early June because he is a very busy entrepreneur. Indeed, he had to be away on business for the entire month of April 2004. Moreover, he was ill for almost the entire month of May 2004.
[13] Did the applicant comply with subsection 167(5) of the ITA, and is he entitled to an extension of the time for filing his notices of appeal? Subsection 167(5) of the ITA reads as follows:
167 (5) 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.
[14] The time limited by section 169 for appealing expired on December 24, 2003. The applicant filed his application for an extension of time on July 28, 2004. Thus, the application was made within one year after the expiration of the time limited by section 169 of the ITA for appealing. Consequently, the applicant complied with paragraph 167(5)(a) of the ITA.
[15] Before granting an extension of the time for appealing, the Court must be satisfied that, within the time for appealing (in this instance by December 24, 2003), the applicant was unable to act or instruct another to act in his name, or had a bona fide intention to appeal. These two conditions in clauses 167(5)(b)(i)(A) and (B) are alternative.
[16] In the instant case, the burden is on the applicant to establish, on a balance of probabilities, that he intended to appeal before December 24, 2003.
[17] The applicant, who needed to show that he intended to appeal within the allotted time, adduced evidence that relied on his testimony and that of Mr. Dubuc. Specifically, he tried to show that there was a misunderstanding with Mr. Dubuc, who claimed he never received a mandate to institute an appeal, whereas the applicant believed that by handing him the letter of September 25, he implicitly mandated him to appeal the Minister's decision. This explanation strikes me as unlikely. The appellant testified that the amounts in issue added up to roughly $100,000 and that he would go bankrupt if he had to pay that sum. Since this was a life-or-death situation for the applicant, I cannot fathom how he never specifically discussed the Minister's decision with Mr. Dubuc within the time for appealing. It also strikes me as unlikely that Mr. Dubuc, who admitted that he received the letter dated September 25, 2003, did not contact the applicant to find out, at the very least, why the applicant gave him the letter. It should be emphasized that the applicant never followed up on the matter with Mr. Dubuc within the time for appealing. As mentioned, the applicant had to show, on a balance of probabilities, that he intended to appeal before December 24, 2004. In my opinion, the applicant has not discharged this onus by adducing this evidence.
[18] Was the application for an extension of time made as soon as circumstances permitted? The evidence disclosed beyond any doubt that the applicant knew in early March 2003 that the time for appealing had elapsed and that he could apply for an extension. What is more, the evidence disclosed that he knew how to institute an appeal, as he was given sample originating documents. I have trouble understanding why the application was filed in Court seven months after the expiration of the time to appeal. This lengthy delay can only be explained by the applicant's carelessness and lack of diligence. He attempted to explain this lengthy delay as follows:
(i) he had to be away from Canada in April 2004 in order to complete a job at a military base in Europe; and
(ii) he was ill for the first three weeks of May.
[19] I certainly understand why he could not act during the first three weeks of May 2004. But why did he not act throughout March 2004? If he was so busy in April 2004, why did he not instruct someone to act in his name? He claimed that he gave Mr. Khalil the application to extend the time in early June 2004 so that Mr. Khalil could attach the notice of appeal and file everything in Court. It is very difficult for me to understand why two months elapsed before the instant application for an extension was filed in Court. Once again, the applicant did not follow up with Mr. Khalil. The applicant admitted that he could not account for this additional two-month delay.
[20] The evidence disclosed no special circumstances that could have justified such a delay, except perhaps the applicant's illness during the first three weeks of May. However busy he may be, a taxpayer must exercise diligence. If he is so busy, it is my opinion that he must instruct someone to act in his name and follow up on the matter with that person. The applicant did none of this. The evidence clearly established his carelessness and lack of diligence.
[21] For these reasons, I dismiss the application for an extension of time.
Signed at Ottawa, Canada, this 13th day of December 2004.
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"Paul Bédard" |
Bédard J.
Translation certified true
on this 14th day of February 2005
Jacques Deschênes, Translator
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CITATION: |
2004TCC714 |
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COURT FILE NO.: |
2004-3189(IT)APP |
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STYLE OF CAUSE : |
René Archambault and Her Majesty the Queen |
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PLACE OF HEARING: |
Montréal, Quebec |
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DATE OF HEARING: |
October 22, 2004 |
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REASONS FOR ORDER BY: |
The Honourable Justice Paul Bédard |
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DATE OF ORDER: |
December 13, 2004 |
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APPEARANCES: |
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For the Applicant: |
The Applicant himself |
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For the Respondent: |
Agathe Cavanagh |
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COUNSEL OF RECORD: |
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For the Applicant: |
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Name: |
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Firm: |
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For the Respondent: |
Morris Rosenberg Deputy Attorney General of Canada Ottawa, Canada |