A-275-79
Charles R. McCambridge (Applicant)
v.
The Queen in right of Canada (Respondent)
Court of Appeal, Heald and Ryan JJ. and Kerr
D.J.—Ottawa, November 2-and 6, 1979.
Judicial review — Income tax — Practice — Appeal before
Tax Review Board withdrawn without being heard, with only a
letter signed by Senior Court Registrar to indicate disposal of
action — Notice of motion then filed to set new date for
hearing — Application to review and set aside Tax Review
Board's decision to dismiss that application — Tax Review
Board Act, S.C. 1970-71-72, c. 11, ss. 7, 8(2), 9(2),(3) —
Income Tax Act, S.C. 1970-71-72, c. 63, s. 171(1) — Federal
Court Act, R.S.C. 1970 (2nd Supp.), c. 10, s. 28.
This is a section 28 application to review and set aside a
decision of the Tax Review Board dismissing a notice of motion
for an order directing the setting of a new date for the hearing
of the appeal. A notice of appeal from an income assessment
had been filed with the Board on applicant's behalf, and
subsequently a letter was sent to the Board withdrawing the
appeal. A letter signed by the Senior Court Registrar indicated
and notified the disposal of the matter. The appeal was never
heard. The notice of motion was then brought to the Board.
Held, the application is allowed. Section 7 of the Tax Review
Board Act requires the Board to hear and dispose of appeals to
the Board while section 9(3) stipulates that every such appeal
and all business arising out of it shall be heard, determined and
disposed of by a single member of the Board. The only action
taken by the Board in response to the letter of withdrawal was
the letter signed by the Senior Court Registrar, not a member
of the Board. Section 7 read with section 9 makes it clear that
an appeal can be disposed of only by a member of the Board,
and not by administrative action pursuant to some policy of the
Board by an employee of the Board. The statute requires a
member of the Board, by affirmative action, such as an order or
judgment, to dispose of the appeal. If Parliament had intended
to provide for the disposal of an appeal by way of filing a notice
of discontinuance, it would have done so in the statute. Section
8(2) cannot be invoked to extend the jurisdiction given the
Board under sections 7 and 9; it merely confers on the Board
the ancillary powers of a superior court to properly exercise the
jurisdiction given it by sections 7 and 9.
APPLICATION for judicial review.
COUNSEL:
W. G. D. McCarthy for applicant.
C. G. Pearson for respondent.
SOLICITORS:
McCarthy & Barnes, Ottawa, for applicant.
Deputy Attorney General of Canada for
respondent.
The following are the reasons for judgment
rendered in English by
HEALD J.: This is a section 28 application to
review and set aside a decision of the Tax Review
Board (hereinafter the Board) made by F. J.
Dubrule, Q.C., Assistant Chairman of the Board
on April 6, 1979. The pertinent facts may be
summarized as follows: The applicant filed a
timely notice of appeal to the Board in December
of 1977 from an income tax reassessment for the
1974 taxation year, the notice of appeal being
signed on the applicant's behalf by his firm of
solicitors. A notice of hearing dated April 27, 1978
was sent to that firm of solicitors and to the
Department of National Revenue, Taxation, to the
effect that the hearing would take place on June 5,
1978. The same firm of solicitors, on behalf of the
applicant wrote to the Board on May 12, 1978
advising that applicant's appeal "is hereby with
drawn" and stating further: "We understand that
no further action need be taken to terminate this
matter but would appreciate receiving from you
confirmation of this." A copy of that letter was
sent to the applicant. The Board replied to that
letter under date of May 17, 1978 and stated
therein, inter alia, as follows:
For your information, the Board has departed from its policy of
issuing Judgment in appeal withdrawn, discontinued or aban
doned. Therefore, the matter is now concluded so far as the
Board is concerned.
The appeal was never heard. Early in 1979, the
applicant instructed his present solicitor to take
whatever steps may be necessary to have the
appeal heard by the Board. Accordingly, that
solicitor brought a notice of motion to the Board
for an order directing the setting of a new date for
the hearing of the appeal.
The Assistant Chairman of the Board, in deal
ing with the motion stated the issue as follows
(Case, p. 34):
The real issue thus becomes—Does a valid, authorized letter
of withdrawal nullify a valid, existing Notice of Appeal, or is it
(the valid letter of withdrawal), in effect, a nullity until a
formal Judgment has been issued by this Board acting on it?
He then proceeded to decide the application in the
following manner (Case, p. 35):
The application comes down to the question of whether or
not there is now a Notice of Appeal in the inventory of this
Board which should have been, but has not been, set down for
hearing. If there is still such a Notice of Appeal in this case,
then of course it should be set down for hearing in the not too
distant future. In the circumstances of this case, there was a
valid letter of withdrawal received by this Board which clearly
expressed that the appeal was closed. Why is a formal Judg
ment necessary? What does it achieve? As I view section 9(3)
of the Tax Review Board Act, that section refers to a case
which is still in dispute and is being heard by a member. It has
no application in a case where a valid letter of withdrawal has
been filed. A Judgment dismissing the appeal, as suggested by
counsel for the appellant, would only tell the appellant that
which he knew from the moment his solicitor filed, on his
behalf, the letter of withdrawal and stated: "no further action
need be taken to terminate this matter". The result is that there
is no appeal in this matter which I can direct the registrar of
this Board to set down for hearing.
An Order will go dismissing the application.
In my view, the Assistant Chairman was in error
in deciding as he did. Section 7 of the Tax Review
Board Act, S.C. 1970-71-72, c. 11, sets out the
duties of the Board:
7. The duties of the Board are to hear and dispose of appeals
to the Board on matters arising under the Income Tax Act, the
Canada Pension Plan, the Estate Tax Act and any other Act of
the Parliament of Canada in respect of which an appeal is
provided under any such Act to the Board.
Section 9(3) of that Act further provides:
9....
(3) Every appeal to the Board and all business arising out of
the appeal shall be heard, determined and disposed of by a
single member; and where a member has been assigned by the
Chairman to preside at a hearing in respect of an appeal, he
constitutes the Board in relation to that appeal and all business
arising out of it unless such assignment is revoked and another
member is assigned in relation thereto.
Section 171(1) of the Income Tax Act is also
relevant and it provides:
171. (1) The Board may dispose of an appeal by
(a) dismissing it, or
(b) allowing it and
(i) vacating the assessment,
(ii) varying the assessment, or
(iii) referring the assessment back to the Minister for
reconsideration and reassessment.
It is my opinion that section 7 of the Act
requires the Board to hear and dispose of appeals
to the Board while subsection (3) of section 9 of
the Act stipulates that every such appeal and all
business arising out of it shall be heard, deter
mined and disposed of by a single member of the
Board. In this case, the only action taken by the
Board in response to the letter of withdrawal from
the applicant's solicitor was the letter of May 17,
1978 referred to supra which is signed, not by a
member of the Board, but by Michael L. Artelle,
Senior Court Registrar. Respondent's counsel
conceded that there was nothing in the record to
show that any action was taken in respect of this
appeal by any member of the Board. A reading of
section 7 together with section 9 makes it clear, in
my opinion, that an appeal can be disposed of only
by a member of the Board, and not by administra
tive action pursuant to some policy of the Board by
an employee of the Board. The statute requires a
member of the Board, by affirmative action, such
as an order or judgment, to dispose of the appeal.
Respondent's counsel submitted that the effect
of the letter of May 12, 1978 was to annul or
discontinue the notice of appeal so that from that
point in time there was no valid notice of appeal. I
do not read the statutory provisions referred to
supra as permitting such a result. If Parliament
had intended to provide that one means of dispos
ing of an appeal could be by way of filing a notice
of discontinuance, it would have been an easy
matter to so provide in the statute. There are only
two ways in which the present legislation provides
for disposing of appeals to the Board. One way is
in the manner discussed above, by virtue of sec
tions 7 and 9 of the Tax Review Board Act. The
other is provided in section 171(1)(a) of the
Income Tax Act (supra) which provides for dis
missal. However, in both cases, the legislation
provides for action by the Board itself.
The respondent also submitted that the Board
has for matters necessary or proper for the due
exercise of its jurisdiction all such powers, rights
and privileges as are vested in a superior court of
record pursuant to section 8(2) of the Tax Review
Board Act' and then refers to the Federal Court
Rules and to the Ontario Rules of Practice, as
being but two examples of procedures providing
for discontinuance or withdrawal of actions in the
superior courts. The answer to this submission is
that the powers granted in subsection (2) of sec
tion 8 relate to the due exercise of the Board's
jurisdiction. The Board's jurisdiction is set out in
sections 7 and 9 supra. Accordingly, section 8(2)
cannot be invoked to extend the jurisdiction given
to the Board under sections 7 and 9. As I read
section 8(2), it merely confers on the Board, the
ancillary powers of a superior court, to properly
exercise the jurisdiction given to it by sections 7
and 9 but it does not confer upon the Board added
jurisdiction.
For the above reasons, 1 have concluded that the
Assistant Chairman erred in refusing to grant the
applicant's request to have his appeal heard.
I would therefore allow the section 28 applica
tion, set aside the decision of the Board dated
April 6, 1979 and refer the matter back to the
Board for reconsideration in a manner not incon
sistent with these reasons.
* * *
RYAN J.: I concur.
* * *
Section 8(2) reads as follows:
8....
(2) The Board has, as regards the attendance, swearing
and examination of witnesses and the production and inspec
tion of documents, and other matters necessary or proper for
the due exercise of its jurisdiction, all such powers, rights and
privileges as are vested in a superior court of record.
The following are the reasons for judgment
rendered in English by
KERR D.J.: As indicated in the reasons for
judgment of Heald J., a notice of appeal from an
income tax reassessment was filed with the Tax
Review Board on behalf of the applicant; and
subsequently a letter was sent to the Board on his
behalf withdrawing the appeal. Thereupon a letter
dated May 17, 1978, signed by Michael L. Artelle,
Senior Court Registrar, indicated and notified the
disposal that was made of the matter. It is not
clear whether the treatment of the letter withdraw
ing the appeal was a departure from the Board's
policy of issuing judgment in an appeal with-
drawn—or whether the policy itself had been
discontinued.
Whatever the Board's policy may be, I under
stand that the Board has not made any "rule"
dealing specifically with withdrawals of appeals.
The primary and fundamental issue between the
parties is the reassessment of the applicant's
income tax. The merits of that issue have not been
dealt with by the Board. The more limited issue
before this Court is related to the former.
Section 9(2) of the Tax Review Board Act
directs the Board to deal with appeals "as infor
mally and expeditiously as the circumstances and
considerations of fairness will permit".
In the circumstances, I agree with the disposal
of the application as proposed by Heald J.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.