r v. AGENCE, 2012 QCCQ 6007
Opinion
Hunza Freight Lines Inc. c. Agence du revenu du Québec 2012 QCCQ 6007 COUR OF QUEBEC CANADA PROVINCE OF QUEBEC DISTRICT OF MONTREAL TOWN OF MONTREAL CIVIL DIVISION No: 500-80-021215-125 DATE : July 17, 2012 ______________________________________________________________________ BY THE HONOURABLE MADAM JUSTICE MARIE MICHELLE LAVIGNE ______________________________________________________________________ HUNZA FREIGHT LINES INC. 5300 Du Sureau Street Pierrefonds (Qc) H8Z 0A7 Petitioner v.
AGENCE DU REVENU DU QUÉBEC 3 Complexe Desjardins Montreal (Qc) H5B 1A7 Respondent ______________________________________________________________________ JUDGMENT ______________________________________________________________________ [ 1 ] Is Hunza Freight Lines inc. (Hunza) entitled to obtain the extension of the time limit to file an appeal of a notice of assessment under
section 93.1.10 of la
Loi sur le ministère du Revenu [1] ? [ 2 ] Hunza is a corporation controlled by Mr. Abdul Qadeer Farooqi, its sole shareholder and director [2] . Hunza has operated a business in transport of goods since 2006. Mr. Farooqi works in the business, driving the truck. In so doing, he is often out of the province to deliver goods. [ 3 ] On November 10, 2010, an auditor from the Agence du Revenu du Québec (ARQ) asked Hunza to produce accounting documents to justify its tax situation [3] . Hunza did not reply to this request.
Therefore, on January 20, 2011, Hunza was assessed by the ARQ for undeclared salaries for the years 2007 and 2008. The notice of assessment for the year 2007 refers to unpaid deductions at source of $69,612.22. The notice of assessment for the year 2008 claims the amount of $34,914.59 [4] . [ 4 ] Mr. Farooqi alleges that, as soon as he received the notices of assessment [5] , he gave them to his accountant Mr. Carim Mohamed of Haque & Associates. [ 5 ] On February 10, 2011, the accountants Hague & Associates sent a notice of opposition to the assessments to the ARQ [6] .
Hunza contests the assessment stating that it does not hire employees but deals only with subcontractors, most of them incorporated. Therefore, it is Hunza's position that no deductions at source had to be retained and remitted to the ARQ. [ 6 ] On April 12, 2011, Me Maude Piché of the ARQ wrote to Haque & Associates requesting the appropriate documents to support Hunza's expenses to its subcontractors.
She asked that these documents be produced at the latest on May 13, 2011 [7] . [ 7 ] Neither Hunza nor Hague & Associates replied to this request. [ 8 ] On May 13, 2011, Me Maude Piché requested, once again, the documents in support of the opposition within the next ten days, failing which a decision would be rendered without further delay [8] . A copy of this letter was sent to Hunza [9] and to its accountants. Neither of them replied. [ 9 ] On May 25, 2011, the ARQ registered a legal hypothec against Hunza's assets.
[ 10 ] On May 31, 2011, a decision was rendered by the ARQ refusing Hunza's opposition to the assessments [10] . The ARQ considered that Hunza had not fulfilled its burden of proof by producing the appropriate documents to justify the expenses to its subcontractors. A copy of the decision was sent to Hunza and to Hunza's accountants, Hague & Associates. Both, Mr. Farooqi and his accountant claim that they did not receive this decision. [ 11 ] On June 7, 2011, a letter, with a copy of the hypothec, was sent to Hunza's place of business rue Du Sureau in Pierrefonds.
It was received by Smumaela Farooky [11] . [ 12 ] On June 10, 2011, a representative of Hague & Associates called Me Maude Piché of the ARQ to discuss the case. In her notes, Me Piché describes the conversation [12] . TEL Entretien téléphonique 2011-06-10 14:51:14 RPIM043 J'ai reçu un appel d'un représentant de Hague et associé. Il me dit qu'ils ont reçu une inscription d'hypothèque légale et qu'il ne comprend pas parce le dossier d'opposition est toujours ouvert. Je lui dit que j'ai fermé le dossier d'opposition car je n'ai jamais eu de nouvelle alors que j'ai pourtant envoyé 2 lettres. …...
Je lui dit que le dossier est fermé et que je vais devoir verifier avec mon supérieur . … [ 13 ] On June 14, 2011, the accountant, Mr. Mohammed, called again and was told by Me Piché that her decision would not change. She informed him that he was within the time limit to file an appeal of the decision rejecting the opposition to the assessments [13] . [ 14 ] He left another message on June 15, 2011 and was told again that the ARQ's decision would not change. [ 15 ] Me Piché did not hear from Mr. Mohamed or Mr.
Farooqi until September 2, 2011, when she received another call from Mr Mohamed asking for a copy of the decision relating to Hunza's oppositions. He mentioned Hunza's intention to file an appeal. Me Piché sent him a copy of the decision rendered on May 31, 2011 [14] by fax. In his testimony, Mr. Mohamed says he recommended to Mr. Farooqi to appeal this decision. [ 16 ] Mr. Farooqi went to the Courthouse in person to file the appeal on September 6, 2011. He produces a printed document [15] entitled Information on Judicial Recourse, on which the procedure to file an appeal is explained.
This document states: "An appeal to the Court of Quebec must be filed within 90 days after the date on which notice of the decision made by the Minister of revenue is sent". Mr. Farooqi was also told by the employees at the Courthouse that he needed to retain the services of an attorney to represent the corporation. [ 17 ] It is only on November 3, 2011, that Mr. Mohamed wrote to Me Guy Gervais requesting his services to file an appeal of Hunza's assessments [16] .
Me Guy Gervais had difficulties meeting with Mr Farooqi and obtaining the relevant information on the opposition and the assessments [17] . [ 18 ] On December 21, 2011, Me Guy Gervais wrote to Mr. Mohamed following the annulment of a meeting scheduled with Mr. Farooqi and its accountant. In this letter [18] , Me Gervais insisted that the time limit to appeal from a decision rejecting the opposition to the assessment, is 90 days. He also emphasized that a motion to obtain an extension of the time limit is possible under
section 93.1.13 of the
Loi sur le Ministère du Revenu [19] , but that such motion should state reasons justifying such request. [ 19 ] Mr. Farooqi finally met with Me Gervais. Me Gervais was then informed of the reasons justifying Hunza's failure to respond to the ARQ's requests for information and to appeal its decision refusing Hunza's opposition to the assessments. On January 30, 2012, approximately eight months after the Minister's decision rejecting Hunza's opposition, a motion for extension of the time limit to appeal was filed in the court record. Analysis [ 20 ] This situation has to be analysed in the light of sections 93.1.10 and 93.1.13 of
Loi sur le Ministère du Revenu, L.R.Q.,
chapitre M-31 : 93.1.10 . Where a person has notified a notice of objection under
section 93.1.1, the person may appeal to the Court of Québec sitting for the district in which the person resides or for the district of Québec or of Montréal, according to the district in which the assessment would be appealable under
article 30 of the Code of Civil Procedure (chapter C-25 ) if it were an appeal to the Court of Appeal , to have the assessment vacated or varied after either. (
a) the Minister has confirmed the assessment or reassessed; or (b) 90 days have elapsed in the case of an objection referred to in
section 12.0.3, or 180 days have elapsed in the other cases, following notification of the notice of objection and no decision has been sent by the Minister by mail. A person who has objected to an assessment referred to in the second paragraph of
section 93.1.2 may appeal only in respect of the issues specified in the notice of objection.
93.1.13. No appeal under
section 93.1.10 may be instituted after the expiry of 90 days following the day on which a decision under
section 93.1.6 was mailed to the person. However, where the time specified in the first paragraph has expired and not more than one year has elapsed since the day of mailing of the decision referred to in
section 93.1.6, a person may apply to a judge of the Court of Québec for an extension of the time limited by the first paragraph for appealing which may not go beyond the fifteenth day following the date of the judgment granting such extension. 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 decision of the judge is a final judgment of the Court of Québec within the meaning of the Code of Civil Procedure (chapter C-25 ). [ 21 ] Hunza's appeal of the Minister's decision to confirm the assessment was not filed within the 90 day time limit of
section 93.1.13. Therefore, Hunza had to apply to the Court of Quebec to obtain the extension of the time limit to file an appeal. [ 22 ] The criteria for obtaining an extension of the time limit to appeal are:
a) the petitioner must be within a year of mailing of the Minister's decision confirming the assessment;
b) the petitioner has to demonstrate that it was impossible in fact for that person to act within 90 days following the day on which the decision was mailed;
c) and, finally, the motion seeking the extension of the time limit must be filed as soon as circumstances permit it . [ 23 ] The requirement of subparagraph
a) poses no problem. Hunza's petition was filed within a year of the Minister's decision to maintain the assessment rendered on May 31, 2011. However, the requirements of subparagraphs
b) and
c) are not met. Hunza's impossibility to act [ 24 ] The notion of "impossibility to act" has been considered on numerous occasions by the Courts [20] . In order to decide if a situation creates an "impossibility to act", the Courts apply the following criteria: ▪ the impossibility to act should be considered in the light of the facts particulars to the case; ▪ the impossibility to act is a relative impossibility and not a total impossibility; ▪ the errors of a mandatory should not be attributed to the client if the client acted diligently. [ 25 ] In Cité de Pont Viau c.
Gauthier Mfg Ltd. [21] , Judge Pratte of the Supreme Court stated: … By referring to impossibility "in fact", which implies that the impossibility is relative, the legislator has chosen a test that is certainly less demanding that the criteria of absolute impossibility or force majeure. … It is impossible to specify in advance every situation that might constitute a relative impossibility. Each case must be decided according to its own particular circumstances, since the impossibility in question is really one of fact. In the case at bar foreclosure was due solely to the error of appellant's counsel.
The party itself acted with diligence and I do not see what more it could have done in order to "act sooner". [ 26 ] In Simon c. Québec (Sous-ministre du Revenu) [22] , the Court concludes:
9 Le Tribunal a une large discrétion pour analyser les faits afin de déterminer si le contribuable se retrouve dans une situation qui l'empêchait d'agir dans les délais légaux. Chaque cas est un cas d'espèce. 10 Lorsque l'empêchement résulte de l'erreur du mandataire du contribuable, soit son avocat, son comptable, en l'absence de faute ou de négligence de la part du contribuable, la demande de prorogation de délai peut être accordée. (nos souligné
s) Impossibility to act within 90 days of mailing of the decision [ 27 ] Hunza and its officer Mr. Farooqi have the burden of proving that they were in a position where there was a relative impossibility to act within 90 days of the mailing of the Minister's decision on May 31, 2010. [ 28 ] Mr. Farooqi and Mr. Mohamed both testified that they never received the decision of the Minister. This decision was mailed to Hunza's address and to the offices of its accountants [23] . On June 7, 2011 [24] , Hunza received the notice of inscription of a moveable hypothec against its assets.
Me Maude Piché's notes taken on June 10, 2011 reveal that a representative of Hague & Associates called the ARQ following the receipt of the moveable hypothec. No action was taken although the accountant Mr. Mohamed informed the ARQ, on June 14, 2011, of Hunza's decision to file an appeal. [ 29 ] Hunza had the burden to prove it was impossible to act within 90 days following the decision of May 31, 2011. This impossibility to act should be based on facts. Besides stating that the decision of May 31, 2011 was not received and that Mr.
Farooqi is often out of town, Hunza did not prove other facts justifying an impossibility to act. [ 30 ] The notification of registration of a legal hypothec in June 2011 should have raised concerns for Hunza and its accountants. The 90 days time limit to appeal expired on or about August 31 st 2011 without any action being taken by Hunza. Hunza's impossibility, in fact, to act has not been proved. Application filed as soon as circumstances permit [ 31 ] Hunza and its accountant say they only received a copy of the decision rejecting the opposition in September 2011.
If it is so, Hunza had to file an application requesting the extension of the time limit to appeal as soon as circumstances permitted it. However, it is not until January 30, 2012, that a motion for extension of the time limit was filed. This delay of almost four months to react to the decision of the ARQ is unreasonable and unexplained. Although Mr. Farooqi travels for the purposes of his work, this is not an excuse for a delay of four months. Mr.
Farooqi had the burden to prove he acted diligently. [ 32 ] Hunza knew in September of 2011 that a decision had been rendered rejecting its opposition to the assessment. Mr. Farooqi was informed of the procedure and the time limit to file an appeal when he went to the courthouse on September 6, 2011. He did not give reasons for delaying the presentation of the motion for extension of the time limit until January 30, 2012.
Farooqi has not proved he was prevented from giving a mandate to an accountant or an attorney to take the appropriate steps to obtain an extension of the time limit to appeal, thus safeguarding its right to oppose the assessment. [ 33 ] Hunza has not demonstrated facts that would justify the Court's use of its discretion to extend the time limit to appeal the ARQ's decision confirming Hunza's assessment.
FOR THESE REASONS, THE COURT: DISMISSES Hunza Freight Lines Inc.'s Motion to seek the extension of the time limit to file an appeal of the Minister's decision to confirm Hunza's assessment; THE WHOLE WITH costs. __________________________________ MARIE MICHELLE LAVIGNE, J.C.Q. Me Guy Charles Gervais Gervais & Gervais Attorney for Petitioner Me Michel Rossignol Larivière, Meunier Attorney for Respondent Date of hearing: February 29, 2012
[1] 93.1.10 . Where a person has notified a notice of objection under
section 93.1.1, the person may appeal to the Court of Québec sitting for the district in which the person resides or for the district of Québec or of Montréal, according to the district in which the assessment would be appealable under
article 30 of the Code of Civil Procedure (chapter C-25 ) if it were an appeal to the Court of Appeal , to have the assessment vacated or varied after either. (
a) the Minister has confirmed the assessment or reassessed; or (b) 90 days have elapsed in the case of an objection referred to in
section 12.0.3, or 180 days have elapsed in the other cases, following notification of the notice of objection and no decision has been sent by the Minister by mail. A person who has objected to an assessment referred to in the second paragraph of
section 93.1.2 may appeal only in respect of the issues specified in the notice of objection.
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