2014 QCCQ 6579, 2014 QCCQ 6579

Uy c. Agence du revenu du Québec 2014 QCCQ 6579 COURT OF QUEBEC Administrative and Appellate Division CANADA PROVINCE OF QUEBEC DISTRICT OF MONTREAL TOWN OF MONTREAL Civil Division No: 500-80-011453-082 DATE: September 8, 2014 ______________________________________________________________________ BY THE HONOURABLE DAVID L. CAMERON, J.C.Q. ______________________________________________________________________ EMILIE T. UY Plaintiff v.

AGENCE DU REVENU DU QUÉBEC Defendant ______________________________________________________________________ CORRECTED JUDGMENT * ______________________________________________________________________ [ 1 ] This is a Motion of the Plaintiff to be relieved of default to inscribe the matter for proof and hearing, according to

Article 274.1 C.p.c. In the present file, the Plaintiff, Emilie T. Uy, appeals from the decisions confirming the Notices of assessment of Revenu Québec , for the taxation years 2002, 2003 and 2004. [ 2 ] In the related file number 500-80-011454-080, the appeal relates to taxation years 2005-2006. In both cases, the issue is the validity of the Plaintiff’s claim for child-care expenses. Both matters were initially brought before the Court by way of

summary appeal respecting a fiscal matter. A

summary appeal proceeds in a matter similar to Small Claims, without lawyers and following a very simple procedure. [ 3 ] In both of these matters, however, the parties consented to the transfer of the cases to the Civil Division of the Court of Québec, which was the proper thing to do, because the cases concerned a tax reduction exceeding $ 4,000.00 for each of the taxation years, and could therefore not be dealt with under the

summary appeal procedure, which is limited to $ 4,000.00 . [ 4 ] The files were initially opened on March 13, 2008 and were transferred in June 2008. [ 5 ] Once the cases were transferred, a timetable, entitled “ Entente sur le déroulement de l’instance ”, was entered into between the parties, Emilie T. Uy, acting for herself, and the firm Veillette Larivière, acting for the Deputy Minister of Revenue of Québec, as the institution was then known. [ 6 ] The timetables in both files provided for a written Defence by October 9, 2008, and the Inscription by the Plaintiff, no later than January 5, 2009.

These timetables were signed on August 15, 2008. [ 7 ] In both cases the Defences are registered in the plumitif as having been filed October 3, 2008. [ 8 ] The Plaintiff, Ms Uy, testifies that an accounting firm, known as Cabugao Inc., had been handling her and her husband’s income-tax declarations in the relevant taxation years, and that it was upon the advice of their accountant that she filed the

Summary Appeal proceedings in each file, drafting herself the document including the grounds of appeal set out in the typed letter written in the first person by herself. [ 9 ] Paradoxically, Ms Uy testifies that she thought the accountant had a role to play in this case, despite the fact that she filed the appeal herself and the accountant would not have been allowed to represent her in such proceedings on a fee basis, as the rules do not permit a representative to act for a party on anything other then a purely gratuitous basis. [ 10 ] Also, paradoxically, when the case was transferred to the regular Civil Division of the Court of Québec, it would not have been possible for an accounting firm to act as her attorney, such representation of others being exclusively reserved to members of the Barreau

du Québec .

It is in this context that the Court considers the evidence of Ms Uy, when she states that she completely relied upon this accountant to act in her interests in the matter, and gave to Mr Cabugao whatever documents she received. [ 11 ] The relevant documents are as follows: First there is a letter dated April 24, 2009 (I-1) from an attorney of Veillette Larivière, as the firm was then called, informing her that she had failed to file an Inscription for proof and hearing by the stipulated date of January 5, 2009, in both files: Failure to file the inscription constitutes a deemed abandonment unless the Court authorises a late inscription.

If you wish to continue proceedings, it is important that you file a motion, for each of the above-mentioned files, to be relieved from the consequences of failure to file an inscription. You must serve your motions on us, and they are presentable in the practice division. [sic] The letter goes on to state that Veillette Larivière will not challenge the motions if they are presented quickly. [ 12 ] A similar letter (I-2) was sent as a follow-up by Veillette Larivière, on July 22, 2009.

In addition to the admonition that had been set out in the earlier letter, Me Giasson attaches extracts from a procedure manual showing examples of the type of motion that should be used as adapted to the facts of Ms Uy’s case. [ 13 ] Ms Uy’s testimony is that she remitted these letters to Mr Cabugao, who told her he would look after it. A long period of inactivity ensued, and it was only on September 4, 2013, that the litigants came into direct contact again.

On August 23, 2009, Larivière Meunier, as the firm is now called, served on the Plaintiff, in each file, a procedure entitled “ Inscription pour jugement sur désistement quant aux frais,

article 264 et 274.3 C.p.c. ” [ 14 ] The Inscription calls upon the Clerk of the Court to impose on the Plaintiff the costs resulting from the deemed discontinuance by her of the case for having failed to inscribe it within the strict 180 day deadline. [ 15 ] The letter of September 4, 2013 (I-3) follows a message that Ms Uy left on Me Giasson’s answering machine: The present is to follow up on the message that you left on our answering machine. You said that you did not understand the procedure “Inscription pour jugement sur désistement quant au frais” that we have sent to you on August 23, 2009.

This is a procedure to close your file at the Court. As discussed with you before, according to the

schedule filed in the Court record, and pursuant to

article 110.1 of the Code of Civil Procedure, an inscription for proof and hearing should have been filed by January 5, 2009, for each of the above- mentioned files. Failure to file the inscription constitutes a deemed abandonment unless the Court authorizes a late inscription. You will find enclosed a copy a the letters that we have sent to you on April 24, 2009 and July 22, 2009. [ sic ] [ 16 ] Again, Ms Uy testifies that she remitted the letter to her accountant and that, failing any response from him, she consulted with Legal Logic Inc., the firm presently acting for her.

The Motion alleges that this took place on or about March 19, 2014: 8. Or, à la grande surprise de la Demanderesse, le bureau Cabugao Inc. n’aurait pas rempli les formalités requises afin de fixer une date en cette affaire et par conséquent celle-ci reçoit une inscription pour jugement sur désistement quant aux frais le ou vers le 21 août 2013 au motif que la Demanderesse n’ayant pas produit l’inscription pour enquête et audition dans le délai de rigueur de 180 jours, le tout tel qu’il appert d’une copie de la dite inscription produite au dossier de la Cour. 9.

Finalement, la Demanderesse consulte les soussignés [Legal Logic Inc.] , le ou vers le 19 mars 2014 pour mettre de l’ordre dans ce dossier et afin de veiller sur l’appel en cette affaire. [ 17 ] The Motion to be relieved of default is dated March 28, 2014. [ 18 ] Curiously, Ms Uy testifies that, at the time she received the letter in 2013, she had not been dealing with Cabugao Inc. for her annual tax returns for at least four or five years.

She nevertheless maintains that Cabugao Inc. was the firm helping her with the appeals, since they had filed the tax returns in the relevant years. [ 19 ] No one from Cabugao Inc. was called as a witness. [ 20 ] When asked if she understood the letters I-1, I-2 and I-3, Ms Uy replied that she did but that she “did not understand the consequences.” [ 21 ] In response to a question put to her by the Court, Ms Uy testified that she had a college-level education from the Philippines, but had not attended any school in the Province of Québec.

ANALYSIS [ 22 ] The rule according to which the time limit for filing an Inscription for proof and hearing is peremptory is carefully drafted. 110.1. Actions and applications that are to be contested orally must be heard or scheduled for proof and hearing and, in the latter case, referred by order to the clerk for scheduling of the hearing, and those that are to be contested in writing inscribed for proof and hearing, within a peremptory time limit of 180 days after service of the motion. In family matters, however, the peremptory time limit is one year.

The court may extend the peremptory time limits, if warranted by the complexity of the matter or special circumstances, upon a request submitted at the time of presentation of the motion to institute proceedings. If, on the day the motion to institute proceedings is presented, the parties are unable to assess the time needed to allow the scheduling of the hearing or the inscription of the case, they may

request an extension on the same grounds at any time before the expiry of the peremptory time limit. The court may also relieve a party from the consequences of failure to act within the time limit upon proof that it was in fact impossible for the party to act within the time limit. The decision must in all cases contain reasons. 2002, c. 7, s. 14 ; 2004, c. 14, s. 1 . 274.3. The inscription form must be filed at the office of the court within a peremptory time limit of 180 days or, in family matters, one year from service of the motion to institute proceedings, unless the court extends the time limit in accordance with

article 110.1, in which case the inscription form must be filed before the expiry of the extended time limit, and make a reference to the extension order. A plaintiff who fails to inscribe within the time limit is deemed to have discontinued the action or application. A cross-plaintiff is not required to inscribe the case. However, if the plaintiff in the principal action fails to inscribe the case within the time limit, the cross-plaintiff may do so within 30 days after the expiry of the time limit.

The clerk must refuse any inscription after expiry of the time limit. 2002, c. 7, s. 64 ; 2004, c. 14, s. 5 . [underlining added for emphasis] [ 23 ] These provisions concerning the peremptory nature of this time limit should be juxtaposed with the general provisions in the Code of Civil Procedure permitting the extension of time limits. 9. A judge may, upon such conditions as he considers just, extend any time limit which is not peremptory or relieve a party from the consequences of his failure to respect such time limit.

In first instance, the parties may, in establishing the proceeding timetable, agree on time limits other than those prescribed by this Code, unless they are peremptory. 1965 (1st sess.), c. 80, a. 9; 1999, c. 40, s. 56 ; 2002, c. 7, s. 2 . [ 24 ] The time limit for the Inscription provided by 110.1, although peremptory, does permit a Court to relieve the party from the consequences of his failure to act within the time limit upon proof that it was in fact impossible for the party to do so. The Court’s decision must, in all cases, contain reasons. This is not a case where

section 9 applies giving a judge the discretion to generously relieve a party from default. [ 25 ] Nevertheless, it has become quite a routine matter in the latter days of the current Code of Civil Procedure for judges to relieve parties from their default to inscribe, when their attorney of record has failed, through an administrative error, to inscribe within the time limit.

Typically, the lawyer will appear within a short time of having missed the filing date and explain to the Court how the failure of an employee to correctly diarise the date or some other form of inadvertence, such as serving the inscription but forgetting to file it promptly, has prevented a well-meaning Plaintiff, who normally would be properly represented, to comply with the strict time limit. [ 26 ] Because of the general principle that a party should not be permitted to loose rights due to of an error by his attorney, this type of inadvertence is considered to be an impossibility to act in those cases where the client has not herself been negligent.

The rights should not be lost because of something beyond her control. There are other cases of impossibility to act that are more dramatic, such as those related to a sudden illness or accident, extraordinary metrological events and the like, but one rarely sees them in the day-to-day practice. [ 27 ] The Legislator’s intentions about impossibility to act were probably inspired by those types of cases of irresistible force.

The reality is that the practice court judge is presented, on a routine basis, with cases that simply fell through the cracks of a busy law practice. [ 28 ] The facts of the present case are singularly different from the standard file in that it is the party herself who failed to act, there being no lawyer in the file and no credible explanation for reliance upon an accountant, who was neither involved in the drafting and the filing of the legal proceedings, nor in the establishment of the timetable and who was never known to opposing counsel. [ 29 ] The idea that the Plaintiff would be relying upon this accountant four or five years after having had no further dealings with him for her current taxation matters is not particularly compelling, to say the least. [ 30 ] It is conceivable that the Plaintiff was misled by the accountant into thinking that he would actually do something to protect her interests, but, at the very least, the presence of the accountant to sustain a cross-examination on such an assertion would be expected before it could be considered to be a fact. [ 31 ] More importantly, the very courteous letters sent by the attorneys of Revenu Québec , setting out, in very clear language, the status of the file and, not only informing Ms Uy, but also admonishing her and coaching her in the process of making a Motion to be relieved of default back in 2009, illustrate the Plaintiff’s neglect of the matter.

It would require a very creative explanation from an accountant as to why she should not follow this advice before Ms Uy could credibly convince the Court that she was relying on the accountant’s advice to do nothing rather than to do what Revenu Québec was trying to help her do. [ 32 ] Even in September 2013, when she asked Revenu Québec for guidance and was given additional copies of the two earlier letters, Ms Uy did nothing until the following March, more than six months later.

[ 33 ] Proceedings before the Court are, by their very nature, serious matters. The party who chooses not to be counselled by a member of the Bar has a duty to actively involve herself in the case and to show respect for the legal process, among other things by adhering to commitments as to time limits for filling essential proceedings.

Although it had no procedural duty to do so, Revenu Québec went out of its way to inform, admonish and coach its opponent in the observance of the deadline for inscribing the case and how to be relieved of the consequences of the default. [ 34 ] Given her level of education and of understanding of the English language, the Plaintiff was more than able to act or, at the very least, to take counsel with someone who could refer her to the proper professional resources to act on her behalf. [ 35 ] When the failure to file the Inscription took place, Ms Uy was no longer in the Small Claims Division where there is no inscription process and where parties are actively assisted by a judge at the hearing stage.

She was in the regular Civil Division of the Court where a party who seeks the Court’s intervention has a certain basic level of responsibility for her actions and her failure to act. In the present case, the evidence does not support a credible case for impossibility to act, whether physical or moral. FOR THESE REASONS, THE COURT: DISMISSES the Motion. THE WHOLE with costs. __________________________________ DAVID L. CAMERON, J.C.Q. Me Martina Bakula LEGAL LOGIC INC. Attorneys for the Plaintiff Mrs Lea Chebli, stagiaire LARIVIÈRE MEUNIER Representative for the Defendant Dates of hearing: May 7 and 14, 2014