A-527-78
Jack Linett (Appellant) (Respondent)
v.
The Queen (Respondent) (Petitioner)
Court of Appeal, Heald and Urie JJ. and Kelly
D.J.—Toronto, December 6, 1979.
Practice — Income tax — Extension of time allowed for
respondent's bringing income tax appeal — Appeal from Trial
Division's order allowing respondent's application for exten
sion of time for filing appeal from Tax Review Board decision
and from order dismissing appellant's application to strike out
respondent's statement of claim — Income Tax Act, S.C.
1970-71-72, c. 63, ss. 167, 172 — Federal Court Rule
3(1)(b), (c).
This is one of two appeals heard together, from decisions of
the Trial Division ordering that the time within which an
appeal may be instituted by the respondent from a decision of
the Tax Review Board be extended, and dismissing appellant's
motion to strike out the respondent's statement of claim. The
Tax Review Board had allowed appellant's appeal by a judg
ment mailed to both parties on April 24, 1978. Respondent
filed a statement of claim in the Trial Division on August 23,
1978—the 121st day from the date of mailing of the Board's
judgment. On September 13, 1978, respondent moved for an
order extending the time within which the appeal might be
instituted. Appellant then moved for an order striking out the
statement of claim on the ground that it had not been filed
within the time limited by section 172 of the Income Tax Act
for bringing the appeal.
Held, appellant's appeal is allowed and the respondent's
application for extension of time is dismissed. The learned
motions Judge erred in granting the extension of time to file the
statement of claim and consequently, in refusing to strike it out.
The computation of time for instituting an appeal under the
Income Tax Act is made pursuant to that Act and is not made
under the Rules. Rule 3(1)(b) relating to the exclusion of Long
and Christmas Vacations in the computation of times can have
no applicability to the computation of time under the Income
Tax Act for the institution of an appeal. Similarly, Rule
3(1)(c) permitting enlargement or abridgment of the time
"appointed by these Rules" can have no application. Both
Rules apply only after an appeal or action has been instituted.
Section 167(4) of the Income Tax Act applies only to a
taxpayer who seeks an extension of time for the institution of
an appeal. Parliament, having given a lengthy delay of 120 days
to institute an appeal, intended to extend the privilege of
seeking an extension of such delay only to a taxpayer and not to
respondent.
INCOME tax appeal.
COUNSEL:
D. Bowman, Q.C. for appellant (respondent).
R. Roy and G. Du Pont for respondent
(petitioner).
SOLICITORS:
Stikeman, Elliott, Robarts & Bowman,
Toronto, for appellant (respondent).
Deputy Attorney General of Canada for
respondent (petitioner).
The following are the reasons for judgment
rendered in English by
URIE J.: This is one of two appeals heard to
gether, from orders of Grant D.J. of the Trial
Division whereby firstly he ordered that the time
within which an appeal may be instituted by the
respondent from a decision of the Tax Review
Board be extended to September 10, 1978 and
whereby secondly he dismissed the appellant's
motion to strike out the respondent's statement of
claim.
Briefly put the relevant facts follow. The appel
lant appealed to the Tax Review Board from an
assessment to income tax for his 1971 taxation
year, which appeal was allowed by a judgment
mailed to the parties on April 24, 1978. The
respondent filed a statement of claim in the Trial
Division on August 23, 1978. It is common ground
that the statement of claim had been filed on the
121st day from the date of mailing of the Board's
judgment. On September 13, 1978 the respondent
moved for an order under Court No. T-3790-78
extending the time within which the appeal might
be instituted. The appellant then moved under
Court No. T-3790-78, for an order striking out the
statement of claim on the ground that it had not
been filed within the time limited by section 172'
of the Income Tax Act for bringing the appeal.
Grant D.J. granted the respondent's motion and
dismissed the appellant's motion, both without rea-
1 Section 172 of the Income Tax Act:
172. (1) The Minister or the taxpayer may, within 120
days from the day on which the Registrar of the Tax Review
Board mails the decision on an appeal under section 169 to
the Minister and the taxpayer, appeal to the Federal Court
of Canada.
(2) Where a taxpayer has served a notice of objection to
an assessment under section 165, he may, in place of appeal
ing to the Tax Review Board under section 169, appeal to the
Federal Court of Canada at a time when, under section 169,
he could have appealed to the Tax Review Board.
sons. It is from these orders that these two appeals
are brought.
The respondent seeks to uphold the orders on
the basis that:
1. The statement of claim was filed within the
time limit on the footing that under Rule
3(1)(b) of the Federal Court Rules the time for
filing does not run during Long Vacation;
2. in any event, the time for filing the statement
of claim may be extended under Rule 3(1)(c) of
the Rules of this Court; and
3. in the further alternative, the Court had the
power to extend the time for filing the statement
of claim by virtue of section 167 of the Income
Tax Act.
The appellant, of course, challenges the respond
ent's view on the applicability of the Court's Rules
before the institution of an appeal particularly
because of the existence of the statutory limitation
period under section 172 of the Act and further
because of the fact that, while section 167 provides
a means whereby a taxpayer may apply to the
Trial Division for an order extending the time
within which such appeal may be instituted, no
such right to apply for an extension is given to the
respondent by that or any other section of the Act.
The Rules of the Court and the section of the
Act in issue read as follows:
Rule 3. (1) Unless the contrary otherwise appears, the compu
tation of time under these Rules, or under any order or
judgment of the Court, is governed by section 25 of the
Interpretation Act, chapter 7 of 1967, which reads:
and by the following provisions:
(b) subject to Rule 402(3), the time of the Long and Christ-
mas Vacations shall not be reckoned in the computation of
the time for filing, amending or serving any pleading or other
document, unless otherwise directed by the Court;
(c) the Court may enlarge or abridge the time appointed by
these Rules, or fixed by any order, for doing any act or
taking any proceeding upon such terms, if any, as seem just,
and any such enlargement may be ordered, although the
application for the same is not made until after the expira
tion of the time appointed or fixed;
167. (1) Where no objection to an assessment under section
165 or appeal to the Tax Review Board under section 169 has
been made or instituted within the time limited by section 165
or 169, as the case may be, for doing so, an application may be
made to the Tax Review Board for an order extending the time
within which a notice of objection may be served or an appeal
instituted and the Board may, if in its opinion the circum
stances of the case are such that it would be just and equitable
to do so, make an order extending the time for objecting or
appealing and may impose such terms as it deems just.
(2) The application referred to in subsection (1) shall set
forth the reasons why it was not possible to serve the notice of
objection or institute the appeal to the Board within the time
otherwise limited by this Act for so doing.
(3) An application under subsection (1) shall be made by
filing with the Registrar of the Tax Review Board or by
sending by registered mail addressed to him at Ottawa 3 copies
of the application accompanied by 3 copies of a notice of
objection or notice of appeal, as the case may be.
(4) Where no appeal to the Federal Court of Canada under
section 172 has been instituted within the time limited by that
section, an application may be made to the Federal Court of
Canada by notice filed in the Court and served on the Deputy
Attorney General of Canada at least 14 days before the
application is returnable for an order extending the time within
which such appeal may be instituted and the Court may, if in
its opinion the circumstances of the case are such that it would
be just and equitable to do so, make an order extending the
time for appealing and may impose such terms as it deems just.
(5) No order shall be made under subsection (1) or (4)
(a) unless the application to extend the time for objecting or
appealing is made within one year after the expiration of the
time otherwise limited by this Act for objecting to or appeal
ing from the assessment in respect of which the application is
made;
(b) if the Board or Court has previously made an order
extending the time for objecting to or appealing from the
assessment; and
(c) unless the Board or Court is satisfied that,
(i) but for the circumstances mentioned in subsection (1)
or (4), as the case may be, an objection or appeal would
have been made or taken within the time otherwise limited
by this Act for so doing,
(ii) the application was brought as soon as circumstances
permitted it to be brought, and
(iii) there are reasonable grounds for objecting to or
appealing from the assessment.
We are all of the opinion that the contentions of
appellant's counsel are correct and that the
learned motions Judge thus erred in granting the
extension of time to file the statement of claim and
consequently, in refusing to strike it out.
It will be noted that the opening words of Rule
3(1) are "Unless the contrary otherwise appears,
the computation of time under these Rules ..."
[emphasis added]. The computation of time for
instituting an appeal under the Income Tax Act is
made pursuant to that Act and is not made under
the Rules. It is clear, therefore, that Rule 3(1)(b)
relating to the exclusion of Long and Christmas
Vacations in the computation of times can have no
applicability to the computation of time under the
Income Tax Act for the institution of an appeal.
By the same reasoning, Rule 3(1)(c) permitting
enlargement or abridgment of the time "appointed
by these Rules" can have no application. Both
Rules apply only after an appeal or action has
been instituted. The time appointed in this case
was under the Act not under the Rules.
Turning now to section 167 of the Act it is, in
our view, abundantly clear that subsection (4)
applies only to a taxpayer who seeks an extension
of time for the institution of an appeal. We reach
this conclusion from the following aids in the
construction of the section:
(1) Subsection 167(4) provides for service of
the notice of application for an extension of time
on the Deputy Attorney General of Canada
within 14 days before the return date of the
motion. This mandatory provision is patently
inappropriate in the case of an appeal by Her
Majesty, who is represented in Court by the
Deputy Attorney General and thus in our view
indicates that the section applies only to an
appeal by a taxpayer.
(2) Paragraphs (a) and (b) of subsection (5) of
section 167 refer to "objecting to or appealing
from the assessment ..." [emphasis added].
Only the taxpayer objects to or appeals from an
assessment—not the respondent.
(3) Subparagraph (5)(c)(iii) of section 167
requires that there be reasonable grounds "for
objecting to or appealing from the assessment".
That requirement is appropriate only to a tax
payer's appeal even where the appeal is from a
decision of the Tax Review Board since such an
appeal is a trial de novo and is, therefore, an
appeal from the assessment, in essence.
From all of the above it is obvious that Parlia
ment, having given a lengthy delay of 120 days to
institute an appeal, intended to extend the privi
lege of seeking an extension of such delay only to a
taxpayer and not to the respondent, possibly to
achieve some degree of finality in income tax
proceedings for the sometimes beleaguered taxpay
er. It is trite to say that we cannot change the
legislation. Accordingly, the appeal will be
allowed, the order of the Trial Division set aside
and the respondent's application for extension of
time will be dismissed with costs both here and
below.
* * *
HEALD J.: I agree.
* * *
KELLY D.J.: I agree.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.