2019 QCCQ 13254, 2019 QCCQ 13254

Cortes c. Agence du revenu du Québec 2019 QCCQ 13254 COURT OF QUEBEC Small Claims Division CANADA PROVINCE OF QUEBEC DISTRICT OF MONTREAL Civil Division No: 500-32-708910-197 DATE: November 26, 2019 ______________________________________________________________________ BEFORE THE HONOURABLE ENRICO FORLINI, J.C.Q. ______________________________________________________________________ VANESSA CORTES Plaintiff v.

AGENCE DU REVENU DU QUÉBEC Defendant ______________________________________________________________________ JUDGMENT ______________________________________________________________________ [ 1 ] On July 19, 2019, Ms.

Cortes filed an Application against the Agence du revenu du Québec (the “ Agency ”) before the Court of Québec, Small Claims Division, in which she seeks $14,975.63 in damages on the grounds that she was unjustly denied childcare tax credits for the 2015 and 2016 taxation years. [ 2 ] This Application stems from a notice of assessment issued by the Minister on June 15, 2018, for the 2015 taxation year in which it refused a portion of a tax credit for child care expenses ($5,433.75) and assessed a penalty of $2,716.88 for gross negligence.

On the same date, the Minister issued a notice of assessment for the 2016 taxation year in which it reduced her tax credit for child care expenses from $5,043.50 to $493.50 and assessed a penalty of $2,275 for gross negligence (collectively, the “ Notices of assessment ”). [1] [ 3 ] Ms. Cortes filed an objection to the Notices of assessment. [ 4 ] By letter dated February 13, 2019, the Minister confirmed the Notices of assessment. [2] [ 5 ] On July 19, 2019, Ms. Cortes, rather than using the form made available by Revenu Québec to file a

summary sppeal, filed her Application online using the electronic form made available to litigants who wish to file an application for recovery of a small claim before the Court of Québec, Small Claims Division. [3] [ 6 ] She alleges that she is suing the Agency because “[c]hildcare tax credit was refused for amounts paid to a caretaker” despite the fact that she filed proper receipts. She adds that the Agency added unreasonable penalties and interest. [ 7 ] Ms. Cortes does not ask the court to vacate the Notices of assessment.

Rather, she seeks $14,975.63 in damages from the Agency ($5,433.75 + $2,716.88 + $4,550 + $2,275). [ 8 ] The Agency moves to dismiss Ms. Cortes’s Application on the grounds that (

i) her claim is not a “small claim” as she should have filed a

summary appeal pursuant to sections 93.2 and ff. of the Tax Administration Act ; [4] and (ii) even if her claim is deemed to be a

summary appeal, it is unfounded in law as it was filed after the expiry of the delay to file a

summary appeal (“ Application to Dismiss ”). Issues [ 9 ] The Agency’s Application to Dismiss raises the following issues:

a) Should Ms. Cortes’s Application be dismissed because she used the wrong form to file her application or because she seeks a reduction in the tax computed exceeding $4,000 per taxation year?

b) Has Ms. Cortes demonstrated that it was in fact impossible for her to act before the expiry of the deadline to bring an appeal?

c) Was her application filed as soon as the circumstances permitted? Analysis and Decision

a) Should Ms. Cortes’s Application be dismissed because she used the wrong form to file her application or because she seeks a reduction in the tax computed exceeding $4,000 per taxation year?

[ 10 ] On July 19, 2019, Ms. Cortes filed an Application against the Agency before the Court of Québec, Small Claims Division, in which she seeks $14,975.63 in damages on the grounds that she was unjustly denied childcare tax credits for the 2015 and 2016 taxation years. [ 11 ] The object of her claim is a claim in damages rather than a proceeding to vacate the Notices of assessment. [ 12 ] Ms.

Cortes’s Application suffers from at least two procedural defects. [ 13 ] Firstly, she filed her Application before the Small Claims Division online using the electronic form made available to litigants who wish to file an application for recovery of a small claim before the Court of Québec, Small Claims Division. [ 14 ] If the subject of her appeal came within the scope of the rules governing

summary appeals under

Chapter IV (Summary Appeals) of the Tax Administration Act , then she should have used the form prescribed for such appeals as mandated by

section 93.13 of the Act . [ 15 ] A claim in which a taxpayer seeks to vacate a notice of assessment issued by the Minister cannot be a small claim for the purposes of

section 536 of the Code of Civil Procedure ( C.C.P. ) because

section 93.2 of the Tax Administration Act provides that the taxpayer may bring an appeal before the Small Claims Division of the Court of Québec “instead of instituting any other action before the Court of Québec” where the subject of the

summary appeal is a reduction in the tax computed under the Taxation Act not exceeding $4,000 for any given taxation year, not including interest and penalties. [ 16 ] Ignorance of the law is not an excuse for Ms. Cortes’s failure to follow the proper procedure. Her failure to do so is all the more inexcusable given that the information fact sheet attached to the Minister’s February 13, 2019, letter spells out in clear and simple language the procedure to follow if a taxpayer wants to contest a Minister’s decision. [5] [ 17 ] Secondly, Ms. Cortes’s Application is also procedurally defective because it does not qualify as a

summary appeal under the Tax Administration Act . The

summary appeal route provided for in

Chapter IV (sections 93.2 and ff. ) of the Tax Administration Act is notably reserved for appeals where the subject of the

summary appeal is a reduction in the tax computed under the Taxation Act not exceeding $4,000 per taxation year, not including interest or penalties. [ 18 ] In the instant case, had she properly drafted the conclusions of her Application, the subject matter of Ms.

Cortes’s application is a reduction in taxes of $5,433.75 for the 2015 taxation year and $4,550 for the 2016 taxation year, along with a cancellation of the penalties assessed under s. 1049 Taxation Act . [ 19 ] To vacate the Minister’s decisions confirming the assessments for those taxation years, the only recourse was an appeal to the Court of Québec, Civil Division, since the reduction sought is greater than $4,000 for each taxation year (s. 93.1.1.10 Tax Administration Act ). [ 20 ] To conclude, Ms. Cortes followed the wrong procedure.

Whereas she should have filed an appeal to the Court of Québec, Civil Division, instead, she erroneously filed an Application under the rules governing the recovery of small claims. [ 21 ] That said, but for the Court’s conclusion on the third issue ( i.e. , whether she filed her application for extension as soon as circumstances permitted), this finding would not have warranted the dismissal of Ms. Cortes’s Application. [ 22 ] Indeed, considering (

i) the general principle that the rules of procedure should be the servant of substantive rights and not the master, and (ii) the rule set forth in

section 93.15 Tax Administration Act , the two procedural flaws could have been remedied by ordering that her application be continued in accordance with the procedure governing appeals to the Court of Québec (Chapter III.2. of the Act ). [6]

b) Has Ms. Cortes demonstrated that it was in fact impossible for her to act before the expiry of the deadline to bring an appeal? [ 23 ] On June 15, 2018, the Minister issued the Notices of assessment. [7] [ 24 ] Ms. Cortes filed a notice of objection to these assessments. [ 25 ] By letter dated February 13, 2019, the Minister confirmed the Notices of assessment. [8] [ 26 ] According to

section 87 of the Tax Administration Act , the date of sending of the Minister’s letter is presumed to be the date of the letter. [ 27 ] Pursuant to

section 93.1.13 of the Tax Administration Act , Ms. Cortes had to institute her appeal with the Court of Québec before the expiry of 90 days from the Minister’s February 13, 2019 letter, in other words, before May 14, 2019 . [9] [ 28 ] Ms. Cortes filed her Application with the clerk of the Court of Québec, Small Claims Division, on July 19, 2019, well after the expiry of the 90-day delay. [ 29 ] The 90-day delay is a strict delay; a party who files its appeal after the expiry of the delay forfeits his right to appeal. [10] [ 30 ] Ms.

Cortes’s Application filed on July 19, 2019, even if it is considered properly brought under the rules of the Tax Administration Act , was filed beyond the time limit prescribed by the statute. [ 31 ] However, on October 15, 2019, at the hearing of the Agency’s Application to Dismiss, Ms. Cortes made a verbal application for

an extension of the delay to file her appeal. [ 32 ] The Agency did not contest her right to make a verbal application to extend the delay to file an appeal. However, the Agency contests that Ms. Cortes has met the criteria required for an extension of the time limit to institute an appeal. [ 33 ] Sections 93.1.10 and 93.1.13 of the Tax Administration Act provide: 93. 1.10 Where a person has filed 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 40 of the Code of Civil Procedure (

chapter C-25.01 ) 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 the sending 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 or in the first paragraph of

section 93.1.2.1 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 - 25.01 ). (Underlining added) [ 34 ] To obtain an extension of the delay to file an appeal, Ms. Cortes must demonstrate, on the preponderance of the evidence, that it was impossible in fact for her to act before May 14, 2019, and that she acted diligently and filed her application for extension of time as soon as the circumstances permitted.

Moreover, she must also prove that not more than one year has elapsed since the expiry of the delay to file her appeal. [11] [ 35 ] The Agency does not contest that not more than one year has elapsed since the expiry of the delay to file her appeal. [ 36 ] In Air Canada v.

Agence du revenue du Québec [12] , the Québec Court of Appeal summarized as follows the rules that must guide the courts when applying the notion of “impossibility in fact to act”: • the issue of whether a taxpayer is under impossibility in fact to act is essentially a question of fact; each case must be analyzed based on the facts of that case. • Impossibility in fact to act is a relative impossibility, not an absolute one; • Impossibility in fact to act will exist if the party, whether she was represented or not, acted diligently.

Therefore, impossibility to act won’t be found to exist where the taxpayer was not diligent or could have remedied the effects of an omission (for example, his lawyer’s omission) but abstained from doing so because of his negligence. Diligence is a sine qua non precondition of impossibility in fact to act. [ 37 ] Ms. Cortes was assisted by an accountant, Rachel Feldhammer, in the process of objecting to the Notices of assessment.

Based on information provided to her by her accountant, she understood that filing an application online using the electronic form made available to litigants who wish to file a claim before the Court of Québec, Small Claims Division was the proper procedure to contest the Minister’s decision to dismiss her notice of objection. [ 38 ] She also understood that she had to file her application before May 14, 2019.

Accordingly, on May 7, 2019, she accessed the Ministère de la Justice web portal using her email address and password and proceeded to complete her Application online using the online application form prescribed for filing a small claim with the Small Claims Division.

She submitted her credit card information to pay the court fees required for the filing of a proceeding. [ 39 ] On May 7, she was under the mistaken belief that the payment had been processed on her credit card and that her application had been validly filed before the May 14, 2019, deadline. [ 40 ] She only discovered in July that the application which she had filed in May had never validly been submitted because the court fee had not been processed on her credit card. [ 41 ] Indeed, during a conversation with a representative of the Canada Revenue Agency, she was asked to provide the court file number for her proceeding pending before the Court of Québec.

When she logged in again to the Ministère de la justice web portal for small claims, she realized that her file was still pending as the court fee had not been processed. [13]

[ 42 ] As soon as she realized this mistake, she immediately resubmitted her credit card information and paid the court fee. As a result, her Application was duly filed on July 19, 2019. [14] [ 43 ] Ms. Cortes explains that her confusion with respect to the payment of the court fee results from her limited ability to read and comprehend French. [ 44 ] In the circumstances described above, the Court considers that it was impossible for Ms. Cortes to act between May 7 and July 19, 2019. Her failure to file the proceeding before May 14, 2019, does not result from her negligence, but an honest misunderstanding concerning the online payment of the court fee.

c) Was the application filed as soon as circumstances permitted? [ 45 ] The Court must also ask itself whether Ms. Cortes acted diligently as soon as the circumstances permitted in requesting an extension of the time limit to file her appeal. [ 46 ] In Océanica Inc. v. Sous-ministre du Revenu du Québec [15] , the Court held that a 40-day delay to file an application for extension of the time limit is not one that was filed “as soon as circumstances permitted.” [ 47 ] In Dubois v. Agence du revenu du Québec [16] , Justice Malette likewise held that a 45-day delay doesn’t meet the threshold of

section 93.1.13 Tax Administration Act . [ 48 ] In Bakominchalis , a five month delay was considered tardy. [17] [ 49 ] In Sanschagrin v. Québec (Sous-ministre du revenu) , Justice Lavigne held that a 72-day delay was unjustifiable. [18] [ 50 ] In the present case, Ms.

Cortes filed her verbal application to extend the delay on October 15, 2019, at the hearing of the Agency’s Application to Dismiss, or five months after the expiry of the delay to file her appeal. [ 51 ] The Court considers that she knew or ought to have known on or about July 19, 2019, when she realized that her proceeding had not been validly filed with the Small Claims Division, that it was filed beyond the time limit to institute an appeal. [ 52 ] The Minister’s February 13, 2019, letter mentions “Si vous voulez faire appel de cette décision devant les tribunaux, veuillez- vous référer au feuillet “Renseignements sur les recours judiciaires” qui est joint à cette lettre”. [ 53 ] The information sheet attached to the letter clearly spells out that if a taxpayer wants to contest a Minister’s decision confirming a notice of assessment, he/she must file an appeal to the Court of Québec (or the Small Claims Division for a

summary appeal) within 90 days from the date of the Minister’s letter. [ 54 ] Had she read the Minister’s letter or paid attention to it, she should have known on or about July 19 that when she finally paid the court fee, she was then beyond the 90-day time limit. [ 55 ] If Ms.

Cortes did not realize by July 19 that her Application was filed late, then she should have known this on August 22, 2019, when she received a copy of the Agency’s Contestation and its Application to Dismiss. [19] [ 56 ] On the same date, she also received a notice of hearing from the Court clerk informing her that the Agency’s Application to Dismiss would be heard September 17, 2019. [20] [ 57 ] The Agency’s Contestation indicates in express and clear language (at pages 2 and 3) that the Agency considers Ms.

Cortes’s claim to be filed beyond the time limit to file an appeal. [ 58 ] She has known or should have known since July 19, or at the latest August 22, 2019, that her appeal was filed tardily. Despite this, Ms. Cortes did nothing to safeguard her right to appeal. [ 59 ] Ms. Cortes waited until October 15 to make a verbal application for an extension of the time limit to file her appeal. [ 60 ] She has not satisfactorily justified her inaction during the period July 19 to October 15, 2019. Her laxness during that time period cannot be condoned. [ 61 ] Ms.

Cortes explains that since she has a poor understanding of French, she did not understand when receiving the Agency’s Contestation that the Agency intended to seek the dismissal of her appeal because it was filed late. [ 62 ] However, if Ms. Cortes did not have sufficient knowledge of the French language, it was incumbent on her to contact the Agency and ask it to send an English translation of its Application to Dismiss, which it would have readily done. [ 63 ] It was not up to the Agency to take the initiative of sending documents to Ms.

Cortes in English as the Agency had no reason to believe that she does not fully comprehend French. The Minister’s February 13, 2019, decision dismissing her objection is in French, and so is the letter sent to her accountant. Yet neither Ms. Cortes nor her accountant ever communicated with the Agency to ask that communications be sent in English. [ 64 ] Ms. Cortes was being assisted by an accountant throughout the process of contesting the Notice of assessment. Yet, she never sent her accountant a copy of the Agency’s Contestation. [ 65 ] Ms.

Cortes argues that she ignored the complexities of the Tax Administration Act and the delays to file her application to extend. However, the courts have repeatedly held that ignorance of the law is not a ground for failure to take action.

[ 66 ] In light of all these facts, the Court concludes that Ms. Cortes’s application for an extension of the time limit to institute an appeal was not filed as soon as circumstances permitted. [ 67 ] Accordingly, her application to extend the time limit to file her appeal must be dismissed. [ 68 ] The Court echoes the words of Justice l’Heureux-Dubé in Lapointe v. Hôpital Le Gardeur : Guided by sympathy alone, my task here would have been much easier. As a judge, however, I must uphold the law and sympathy is a poor guide in such matters.

Justice according to law is the only guide and justice must work for both parties engaged in litigation, plaintiffs as well as defendants. [21] [ 69 ] In closing, the Court considers that considering the circumstances of this case, it is fair and reasonable not to award legal costs to the Agency. FOR THESE REASONS, THE COURT: [ 70 ] GRANTS the Agency’s Application to Dismiss; [ 71 ] DISMISSES Ms. Cortes’s Application. [ 72 ] WITHOUT LEGAL COSTS . __________________________________ ENRICO FORLINI, J.C.Q. Date of hearing: October 15, 2019