Gerald Fuchs (Applicant) v. Her Majesty the Queen (Respondent)

98 DTC 6560
Federal Court-Trial Division
April 1, 1997

(Court File No. T-1703-96.)

Collection of tax — Minister retaining taxpayer’s GST credits and sending out Requirements to Pay in respect of income tax arrears owing — In telephone conversation, Revenue Canada collection officer discussing taxpayer’s request that all collection proceedings be terminated — Whether such conversation a “decision” to which judicial review applicable — Whether taxpayer having instituted judicial review proceedings within required statutory time frame — Income Tax Act, R.S.C. 1985 (5th Supp.), c.1 (as amended), s. 224 — Federal Court Act, R.S.C. 1985, c. F-7, ss. 18.1(1) to (5).

Following a negotiated settlement of the taxpayer’s appeal to the Tax Court of Canada, the Minister issued new assessments (on August 7, 1985) for the taxpayer’s 1974 to 1978 taxation years, reflecting the settlement amount. Following the taxpayer’s failure to pay such amount, the Minister commenced withholding his federal goods and services tax credits on August 12, 1991. As well, in October, 1994 and in March, 1996, the Minister sent a Requirement to Pay Notice (under section 224 of the Act) to a corporation of which the taxpayer was the sole shareholder. Also in October, 1994, and in January, 1995, a Requirement to Pay Notice was sent to the taxpayer’s RRSP carrier. All of the foregoing Requirements to Pay were complied with by the recipients. Finally, on June 26, 1996, the taxpayer’s counsel communicated to V (of Revenue Canada’s Collection Department) his belief that, under the relevant provincial limitations statute, the taxpayer’s tax debt had been extinguished. Alleging that V’s conversation amounted to a denial of the taxpayer’s request that Revenue Canada cease all tax debt collection proceedings, the taxpayer applied to the Federal Court-Trial Division for a judicial review of V’s decision.

Held: The taxpayer’s application was dismissed. Under subsection 18.1(2) of the Federal Court Act, an application for judicial review lies “in respect of a decision or order of a federal board, commission or other tribunal”. V, the Collection Officer, could be considered as a “federal board, commission or other tribunal” in this context, and any “decision” made by him could be communicated by telephone or by any other means. However, what was communicated to the taxpayer’s counsel by V during the telephone conversation of June 26, 1996 was not a “decision”. It was merely the expression of V’s opinion in the course of a wide-ranging conversation discussing the collection of taxes owed by the taxpayer. The taxpayer had also argued that if V’s conversation did not constitute a “decision” , its application for judicial review could still proceed on the ground that Prohibition lay against the “acts or proceedings” (as opposed to the “decisions or orders”) of the Minister. Apart from the fact that no judicial precedent was put forward in support of this proposition, judicial review of an “act or proceeding” under paragraph 18.1(3)(b) of the Federal Court Act is restricted to prohibiting an act or proceeding (of the federal board, commission or tribunal) in a prospective manner only. In this case the Minister had begun to “act” in 1991 (with respect to the GST offsets) and in 1994 (with respect to the Requirements to Pay). The taxpayer ought to have commenced the necessary legal proceedings within the statutory thirty day delay when the Minister retained the GST credits or issued the Requirements to Pay. And since the taxpayer could not offer a valid explanation for failing to file his application within the statutory time periods, he was not entitled to an extension of time to do so, particularly in view of the lengthy delay of at least two to two-and-one-half years involved. The taxpayer’s purported ignorance of the law, lack of sophistication, or scarcity of funds were not valid explanations.

DOMINION TAX CASES
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