2021 QCCQ 3502, 2021 QCCQ 3502

Mannan c. Agence du revenu du Québec 2021 QCCQ 3502 CO URT OF QUÉBEC Administrative and Appellate Division CANADA PROVINCE OF QUÉBEC DISTRICT OF MONTREAL Civil Division No: 500-80-040781-206 DATE: 5 th May, 2021 ______________________________________________________________________ BY THE HONOURABLE DANIEL BOURGEOIS, J.C.Q. ______________________________________________________________________ Abdul MANNAN Plaintiff v. AGENCE DU REVENU DU QUÉBEC Defendant ______________________________________________________________________ JUDGMENT (application for extension of the time limit for filing a notice of objection

section 93.1.5 of the Tax Administration Act ) [1] ______________________________________________________________________ [ 1 ] Mr. Abdul Mannan (”Mannan” [2] ) applies for an extension of the time limit for filing a notice of objection to the notice of assessment bearing the number MU262258C02, dated September 6, 2018, for the 2015 taxation year. [ 2 ] The Agence du revenu du Québec (“Revenu Québec”) contests the application, arguing that it was not impossible in fact for Mannan to act and that his application was not filed as soon as circumstances permitted.

BACKGROUND [ 3 ] Mannan is the president of 9294-6748 Québec inc., doing business under the name Restaurant India Masala (the “Corporation”).

It is not contested that the Corporation and the plaintiff were audited for the years 2014 and 2015, or that notices of assessment were issued to the Corporation and to Mannan for, among other things, unreported wages. [ 4 ] The notice of assessment dated September 6, 2018, for the 2015 taxation year, sent to Mannan, includes the following statements: This notice of assessment is based on the audit of your file and in accordance with the draft assessment or the explanatory documents we recently sent you. … Please note that we may revise our decision if new facts are brought to our attention. … We have revised your income tax return in order to take into account the additional income of 9294-6748 Québec Inc. that you received as a shareholder: Type of income Amount Shareholder benefit $32,751.00 FOR MORE INFORMATION ABOUT THIS NOTICE OF ASSESSMENT You can contact Carolina Medrano, toll-free, at 1 888 830-7747, extension 8993719.

Be sure to have on hand your social insurance number, notice of assessment and income tax return. You can also write to us at the following address: … If you do not agree with your notice of assessment, you can contact us. If the matter is not resolved to your satisfaction, you can file an

objection.

To do so, complete form MR-93.1.1-V, Notice of Objection, or write a letter to the attention of the Director of the Direction des opposition : … You must submit your notice of objection by whichever of the following dates is more advantageous for you: 90 days after the date of this notice or one year after the deadline for filing your income tax return . (Emphasis added.) [ 5 ] The evidence reveals that on November 13 and 29, 2018, Mannan communicated with representatives of Revenu Québec concerning the contestation of the interest (D4 - intervention log). [ 6 ] Although the time limit to object expired on December 5, 2018, the evidence also reveals that a lawyer from the firm Alain Brault inc. intervened with Revenu Québec regarding the Corporation.

It was explained to that lawyer at that time that the period for objection to the notice of assessment issued against Mannan had ended. That lawyer was also informed that he could still file an application for an extension of the time limit to object. [ 7 ] On January 7, 2019, Revenu Québec received a power of attorney (MR-94) from Mtre Philippe St-Georges.

The intervention log indicates that the representative was again informed that the 90-day period to object had expired, but that it was still possible to file an application for an extension of the time limit. [ 8 ] The intervention log indicates that, on January 29, 2019, the lawyer representing the plaintiff explained to Revenu Québec that the plaintiff did not want to file an objection but simply wanted to settle the Corporation’s file. [ 9 ] On November 22, 2019, Mannan asked Revenu Québec to [ translation ] “reopen” his file (D-2). [ 10 ] It is useful to cite the reasons invoked in support of the request to reopen the file.

The frist reason is I do not agree the decissions that was takern towads my case, so I had to seek for others help. The second reason I was mentaly and phisicaly burned out so I have to take medical attention. And 3 rd reason is I could not effords to pay a lawyer it was getting very expensive so on my side that i had to let it go. And I had to take a decession to go to the court of justice. (Reproduced verbatim.) [ 11 ] When examined on this subject during the hearing, Mannan answered that he had health problems in 2018, which were caused by exhaustion, fatigue, and stress.

He submitted medical documents into evidence, which he says establish that he had a consultation and that he had been hospitalized for these problems. [ 12 ] However, the medical reports filed indicate that Mannan apparently had two episodes of exhaustion, causing him to faint, in May 2018, that is, before the notice of assessment of September 6, 2018, was issued.

Other medical documents filed into evidence also indicate that he apparently had a consultation in neurology in September and December 2018. [ 13 ] Last, other uncontradicted facts demonstrate that Revenu Québec responded to the request to [ translation ] “reopen the file” dated November 22, 2019, in a letter sent to Mannan on March 13, 2020 (D-3). [ 14 ] The evidence also shows that on May 13, 2020, Mannan filed with the Small Claims Division, his [ translation ] “application to reopen the file”, which was transferred to the Civil Division of the Court on November 9, 2020, to proceed pursuant to

section 93.1.5 of the T.A.A. ANALYSIS AND DECISION [ 15 ] It is appropriate here to cite the relevant sections of the T.A.A. concerning the objection to the assessment as well as the application for an extension of the time limit to do so: 93.1.1. A person may object to an assessment under a fiscal law by filing with the Minister, on or before the day that is 90 days after the day of sending of the notice of assessment, a written notice of objection setting out the reasons for the objection and all relevant facts. … 93.1.3. Where a person has not objected to an assessment within the time specified in

section 93.1.1 and not more than one year has elapsed after the expiry of that time, the person may apply in writing to the Minister for an extension, setting out the reasons why the notice of objection was not filed within the specified time. 93.1.4. The Minister shall, with dispatch, consider every application filed with the Minister under

section 93.1.3, grant or refuse the application and send the decision to the person. The application shall be granted if the person demonstrates that it was impossible in fact for that person to act and that the application was filed as soon as circumstances permitted. The time for filing the notice of objection may not be extended beyond the 30th day after the day of mailing of the Minister’s decision. 93.1.5. A person may, within 90 days after the day of mailing of the Minister’s decision under

section 93.1.4, apply to a judge of the Court of Québec for a review of the decision. The judge shall grant the application if, in the judge’s opinion, the person meets the conditions set out in sections 93.1.3 and 93.1.4, and

the judge’s decision is a judgment of the Court of Québec that terminates a proceeding within the meaning of the Code of Civil Procedure (chapter C - 25.01 ). [Emphasis added.] [ 16 ] Thus, the issues in this case are the following: 1. Was it impossible in fact for Mannan to act within the 90-day time limit, that is, between September 6, 2018, and December 5, 2018? 2. If yes, was the application for an extension made as soon as the circumstances permitted? [ 17 ] The Court of Appeal of Quebec, in Océanica c.

Sous-ministre du Revenu du Québec , [3] stated the following with respect to the notion of impossibility in fact to act: [ translation ] [25] The issue of whether it was impossible in fact for a taxpayer to act is a question of fact that must be examined on a case-by-case basis and decided on the particular facts of the case. … [26] It is common ground that the impossibility in fact to act is a relative, not an absolute, impossibility; the party asserting it need not show that it was prevented from acting due to an insurmountable obstacle beyond its control.

Therefore, the lawyer’s error could constitute such an impossibility in fact to act provided that the party itself acted diligently. [ 18 ] Commenting on the Océanica decision cited above, the Court of Appeal wrote the following in Air Canada : [4] [ translation ] [22] This approach is consistent with the one taken in every judgment on the impossibility to act, a concept referred to in various legislative provisions extending procedural time limits. Take, for example, arts. 110.1, 484, or 523 of the former Code of Civil Procedure or arts. 84, 177, or 363 of the new Code of Civil Procedure .

In every case, the diligence of the party alleging that it was impossible to act is one of the essential considerations to be assessed by the court. It is up to the party who invokes the impossibility to act to establish its personal diligence, as the lack thereof is an obstacle to the recognition of the impossibility to act. In other words, it is impossible to act only if the party, represented or not, was personally diligent.

Therefore, if a party was not diligent or could have corrected the effects of a failure (of counsel for example) but chose not to or neglected to do so, it was not impossible for that party to act.

It could thus be said that diligence is a sine qua non condition of the impossibility to act. » (Citations omitted.) [ 19 ] What is the case here? [ 20 ] The evidence demonstrates that the plaintiff was certainly very preoccupied both with operating his restaurant and the tax audit, to the extent that he had consultations for medical problems. [ 21 ] The evidence also shows that he was nevertheless able to mandate a lawyer in a timely manner, as it appears from the notes in the intervention log (D-4), which reveal that a representative intervened in his file on November 13 and 29, 2018. [ 22 ] Even after the expiration of the time limit to file a notice of objection, the evidence reveals that on December 13, 2018, a Revenu Québec officer asked the plaintiff’s representative if the plaintiff wanted to object to the new notice of assessment. [ 23 ] Apparently, he did not.

The plaintiff’s representative then told Revenu Québec that he only wanted to cancel the penalties. [ 24 ] Thus, considering the foregoing, it is not clear that it was impossible in fact for Mannan to act since he was nevertheless capable of mandating a representative to act for him. [ 25 ] That being said, even if the plaintiff had demonstrated that it was impossible in fact for him to act, a conclusion the Court cannot accept, the application for an extension cannot be granted since it was not presented as soon as the circumstances permitted. [ 26 ] Last, the evidence reveals that the plaintiff signed a transaction and renounced the right to appeal for and on behalf of the Corporation on April 25, 2019 (D-6). [ 27 ] This transaction and renunciation of the right to appeal, for the Corporation, is consistent with the intervention log (D-4) on January 29, 2019, when a Revenu Québec officer, speaking with the plaintiff’s lawyer, again asked whether the plaintiff wanted to file an application for an extension of the time limit to object.

Mannan’s lawyer answered that he did not; he only wanted to settle the Corporation’s file. [ 28 ] Thus, more than 350 days elapsed between the expiration of the time limit to object on December 5, 2018, and the date of the application for an extension on November 22, 2019. [ 29 ] It is clear in this case that Mannan’s lack of diligence bars his application for an extension of the time limit to object. FOR THESE REASONS, THE COURT: DISMISSES the application for an extension of the time limit ;

THE WHOLE , with legal costs. __________________________________ DANIEL BOURGEOIS, J.C.Q. Mr. Abdul Mannan NOT REPRESENTED Plaintiff Mtre Etienne Tremblay LARIVIÈRE MEUNIER Defendant’s lawyers Date of hearing: March 24, 2021