4453761 Manitoba Ltd. v. R. – TCC: EI and CPP appeals quashed as being out of time

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4453761 Manitoba Ltd. v. The Queen (October 28, 2014 – 2014 TCC 321) was a decision on a motion by the Crown to quash EI and CPP appeals of 4453761 Manitoba Ltd. (“445”) as being filed out of time:

6. 445 is related to several other companies which also own and operate residential apartment buildings in the city of Winnipeg. On February 27, 2012, in reply to 445’s administrative objection to the Minister’s initial ruling regarding a contract of service or an employee/employer relationship, the Minister purportedly provided notice of the decision by sending it by pre-paid first class mail to 445’s address maintained on file. The CRA’s file copy of the letter adduced at the hearing correctly showed 445’s address. The rulings officer at the time, Ms. Yu, testified at the hearing as to the four step standard process involved in the mailing of such notices: signing, dating and copying; delivery to out-going mail collection area; stamping and postage application and delivery to Canada Post pick-up bins where the outgoing mail is retrieved by Canada Post. It was a signed copy of the actual decision letter which was retained in the CRA file and produced at the hearing.

7. Notwithstanding this elaborate procedure, 445 has no record of receiving the original decision letter dated February 27, 2012 (the “445 Decision Letter”). With respect to a related company, 3588883 Manitoba Ltd. (“358”), a similar decision letter was mailed by Canada Revenue Agency (“CRA”) on March 12, 2012 (the “358 Decision Letter”). The Appellant contends it also never arrived. When collection proceedings commenced almost a year later against 358, a representative of 358 contacted Ms. Yu to indicate no decision notification letter was received. Utilizing standard procedure, Ms. Yu reviewed the file copy of the 358 Decision Letter and determined that it contained an incorrect address: the postal code was wrong. The Minister utilized her discretion and, because of the incorrect address, reissued a then currently updated decision notification letter to 358 to its corrected address. Upon receipt, 358 appealed that decision.

8. When a similar inquiry was made in May of 2013 regarding 445, CRA again reviewed the file and the copy of the 445 Decision Letter. It contained no address errors. However, CRA re-sent the file copy of the original 445 Decision Letter with a covering letter enclosing and identifying the February 27, 2012 letter. The 445 Decision Letter, unlike that of 358, was not updated with respect to the Appellant. The Respondent’s motion to quash the appeal is brought on the basis of the Court’s lack of jurisdiction given the plain wording of the various legislation cited above, the Rules of this Court and the relevant case law concerning the deemed receipt by a taxpayer of notification letters when such letters are mailed by the CRA.

It appears implicit from the reasons for judgment that 445’s appeal was commenced more than 90 days after the date of the 445 Decision Letter (February 27, 2012) [the court file number indicates that the appeal was commenced in 2013].  The court concluded that the appellant had no basis to challenge the validity of the 445 Decision Letter, notwithstanding its claim that the letter was not received until after it made inquiries of CRA in May of 2012:

13. Factually, the Court notes that this appeal does not contain the usual exceptions the Tax Court has accepted when ignoring or avoiding “the presumed receipt when sent by mail” rule. This matter concerns a single decision letter under the EI Act and CPP, not bulk batch mailings of notices of assessment under the Income Tax Act. The address of the Appellant, as reproduced in the retained file copy in CRA’s file, was the correct, authorized mailing address CRA had on file. The Appellant does not dispute this. In fact, within the 358 Decision Letter, an address error was identified by the CRA (and not the Appellant), discretion was utilized by the Minister, the decision letter was then currently re-dated and the appeal rights of the Appellant were novated.

14. Again, unlike the 358 Decision Letter, the covering letter with respect to the 445 Decision, did not identify that “the 90 day time frame to appeal the decision starts on the date indicated on the attached ministerial notification letter”. The covering letter republishing the 358 Decision Notification Letter did just that. In fact, the May 20, 2013 cover letter was sent 3 days after 445 requested a copy of the 445 Decision. Again, CRA was obliging the request of the Appellant for a copy of that original decision letter. The May 20, 2013 enclosure letter was sent by the very CRA official who last handled all of the decision letters with respect to 445 and 358 and who understood how the individual decision letters, which she last handled, would be processed as mail within the Winnipeg tax service office.

15. In conclusion, although certain authorities exist with respect to notices of reassessment before this Court, each when granting relief to an appellant did so on the basis of some deficiency in the evidence, knowledge or notice otherwise provided by CRA to the taxpayer. Moreover, no such cases involve single decision CPP/EI notification letters, sent from the desk of the effective decision maker by regular pre-paid first class mail to the taxpayer’s correct address.

16. While the line of authorities, clear language of the Act and the concordant presumption regarding deemed receipt when sent by mail may seem to be inequitable and somewhat arbitrary, cumulatively they nonetheless comprise the law with respect to appeals regarding decision notification letters under the EI Act and CPP. Accordingly, the appeals are quashed for lack of jurisdiction by the Court to hear the appeals of the Appellant.

The worker in question was an “off-site” property superintendent and the court concluded, perhaps as some form of consolation for 445, that even if the appeal had not been out of time it would not have been successful:

25. The objective reality of an independent contract for services, otherwise marginally present under the terms of the agreement, is simply not supportable by the facts. There is an absence of the usual hallmarks of a separate business: no GST registration and payment, no rendered invoices, no similar services to other third parties and no ability to sub-contract at will. As well, the opportunity to profit by adjusting costs inputs and the use of alternative labour services and products do not exist. The absence of these factors simply does not sufficiently support the already wobbly subjective intention existing within the first stage analysis of the agreement between the parties. Instinctively, this is not someone operating a business on his own account, but a part-time employee with flexible hours of work.

26. Therefore, again although moot, had the Appellant succeeded on the jurisdiction argument, it would not have succeeded on the merits of this appeal.