2011 ONSC 3270, 2011 ONSC 3270

CITATION : R.K.W. Industries Ltd. v. The Minister of Finance, 2011 ONSC 3270 COURT FILE NO.: 02-CV-238326 DATE: 20010530 SUPERIOR COURT OF JUSTICE - ONTARIO RE: R.K.W. Industries Ltd. Appellant AND: The Minister of Finance, Respondent BEFORE: Carole J. Brown J. COUNSEL: Shanahan, C , for the Moving Party/Respondent Somerville Taylor, L , for the Respondent/Appellant HEARD: April 27, 2011 ENDORSEMENT [ 1 ] The Minister of Finance moves pursuant to Rule 25.11 of the Rules of Civil Procedure (“ Rules ”) to strike the Notice of Appeal of the appellant, R.K.W.

Industries Ltd. (“RKW”) as an abuse of process on the ground that the appeal by R.K.W. was not instituted within the limitation period set forth in the Retail Sales Tax Act , RFO 1990, c R31, as amended (the “ Act ”) and is therefore invalid. [ 2 ] The respondent/appellant, R.K.W., submits that the Minister is estopped from raising the limitation period by virtue of the conduct of the Minister’s Director; the motion is brought too late; and there is insufficient evidence of the date of commencement of the limitation period.

The Facts [ 3 ] The Respondent Ministry issued a tax assessment to the appellant, R.K.W., by way of Notice of Assessment dated June 13, 2000. R.K.W. served a Notice of Objection requesting reconsideration of the assessment pursuant to the Act . By letter dated July 31, 2002, the Ministry advised R.K.W. that it had reconsidered the Objection and that no change should be made.

R.K.W. filed a Notice of Appeal with the Court on October 29, 2002, within the limitation period stipulated in the Act , but did not serve it within the 90 day limitation period as required by the provisions of the Act , service being effected on November 5, 2002 by R.K.W.’s lawyer. On February 27, 2003, the Ministry wrote to R.K.W.’s lawyer to advise that due to the late service of the Notice of Appeal on the Minister, the appeal was invalid and no reply of the Minister would be filed. [ 4 ] On June 5, 2003, following a complaint to his MPP, Mr.

Lahtinen, the President of R.K.W., was contacted by John Godden, the Director of the Tax Appeal Branch. Thereafter, there was no further activity until R.K.W.’s bank account was frozen in January of 2007, by the Ministry’s Collections Branch, following which Mr. Lahtinen wrote to the Minister. The Issues [ 5 ] This Court must determine: 1. Whether the Appellant’s Notice of Appeal is invalidly instituted and should be struck; 2. Whether the Ministry is estopped by its conduct from relying on the limitation date.

Was the Notice of Appeal validly instituted? [ 6 ] The Retail Sales Tax Act (“ Act ”) provides for a comprehensive objection and appeal process regarding assessment. Pursuant to s. 25(1) of the Act , no appeal shall be instituted after the expiration of 90 days from the date notice has been mailed.

Section 25(2) provides that a valid appeal is instituted if, within the limitation period , a Notice of Appeal is filed with the court, the court’s filing fee is paid and the Notice of Appeal, as filed, is served on the Minister. [ 7 ] The jurisprudence is clear that the statutory right of appeal under the Act is conditional on the appeal being properly instituted within the 90 day limitation period, and this Court does not have jurisdiction to extend the limitation period set forth in the Act , or to relieve against the consequences of failing to file in time: Cheong v. Ontario (Minister of Finance), [2004] O.J.

No. 378 (CA) ; Helou (c.o.b. Your Choice Pizza & Wings) v. Ontario (Minister of Finance) , [2002] O.J. No. 3973 (SCJ), [2004] O.J. No. 5228 (Div. Ct.) ; Kenan Celik o/a Ken’s Family Restaurant v. The Minister of Finance , unreported Reasons for Judgment of Belleghem J. dated September

9, 2009. In the case of Cheong , the limitation date was missed by only one day but was nevertheless found to have been invalidly instituted. Based on the foregoing, I find that the Notice of Appeal was not instituted within the limitation period stipulated in the Act and is therefore not valid. [ 8 ] Mr. Lahtinen deposes that he has no recollection of being advised that R.K.W.’s Notice of Appeal was late or that the Minister “ viewed the appeal as invalid ”. Based on all of the evidence adduced, I do not accept the appellant’s position that he was not advised of the invalidity of the Appeal.

Is the Minister estopped from raising the limitation period? [ 9 ] The appellant submits that subsequent to filing the Notice of Appeal, the appellant’s President spoke with the Director of the Tax Appeal Branch regarding the status of the appeal and was advised that the file would be referred back to the Assistant Deputy Minister after advising the appellant’s prior lawyer that the appeal was invalidly instituted.

It is the position of the appellant that, based on the alleged misrepresentation, the appellant waited four years to be called to court. [ 10 ] The appellant submits that the Minister made representations that the appellant relied on to its detriment, and that all the essential elements of promissory estoppel are present in this case. The appellant therefore argues that the Minister is estopped from relying on the limitation period in this matter. [ 11 ] The evidence adduced by the Minister indicates that the President of R.K.W., Mr. Lahtinen, spoke with the Ministry Director of the Tax Appeal Branch, Mr.

John Godden, on June 5, 2003, after registering a complaint with his MPP. The appellant recorded the telephone conversation and the transcript was proffered in evidence. It is on the basis of that conversation as evidenced by the transcript of the telephone conversation that the appellant submits the Ministry is estopped from seeking to strike the motion. [ 12 ] On a careful reading of the transcript, taking into consideration all of the preceeding events, I find that Mr. Godden stated to Mr.

Lahtinen, more than once, that the issue was the late filing of the Notice of Appeal and that the appeal process had been exhausted, that Mr. Lahtinen advised Mr. Godden, erroneously, that “the appeal was filed … before the deadline”, which was not correct; and that Mr. Godden, finally indicated that he would advise the Minister’s office that he and Mr. Lahtinen had spoken and would “pull up the briefing note” on the file. I note further that Mr.

Lahtinen acknowledges that R.K.W. had been audited in or about 1990 for the same incorrect collection and remittance of Retail Sales Tax. [ 13 ] The appellant did nothing further regarding the appeal until January 17, 2007, when it’s bank account was frozen by the Ministry’s Collection Branch. On January 19, 2007, Mr. Lahtinen wrote to the Minister, acknowledging that all efforts to have the assessment reversed had failed and requesting review of the assessment.

On March 16, 2007, the Minister responded advising again that the Notice of Appeal was invalidly instituted and there was no further recourse pursuant to the legislation. [ 14 ] Based on the transcript of the telephone conversation between Mr. Godden and Mr. Lahtinen, upon which the appellant relies with respect to the promissory estoppel issue, I do not find that Mr. Godden made any representations regarding the Notice of Appeal or regarding relieving against the consequences of the late filing. While Mr.

Godden stated that he would advise the Assistant Deputy Minister’s office of their telephone conversation and find the briefing note related to the file, there was no representation that the file would be reconsidered. I do not find there to be any ground for estoppel based on the evidence adduced. [ 15 ] The caselaw with respect to promissory estoppel to which I was referred involves representations regarding the limitation period made before the limitation period expired or misinformation given concerning the limitation date which was relied upon and which resulted in late filing.

In the present case, the representation alleged to have been made was made subsequent to the limitation date expiry and to the Minister’s correspondence advising that the appeal had been invalidly instituted. I do not find the caselaw to which I was referred to be of assistance in this matter. I do not find there to be any ground for a finding of estoppel based on all of the evidence adduced. [ 16 ] While I am sympathetic to the plight of the appellant in this case, I find for all of the reasons stated above, that the appeal was not validly instituted and that there are no grounds for promissory estoppel.

I order that the Notice of Appeal be struck pursuant to Rule 25.11(c). [ 17 ] In all of the circumstances, I make no order for costs. Carole J. Brown J. Date: 2011 05 30