Amrite v. R. – TCC: No extension of time to file Notices of Appeal for 2002, 2003 tax shelters

Amrite v. R. – TCC:  No extension of time to file Notices of Appeal for 2002, 2003 tax shelters

Amrite v. The Queen (January 22, 2018 – 2018 TCC 11, Masse D.J.).

Précis:   Five taxpayers were involved in a tax shelter donation program.  Their reassessments were confirmed by CRA and they failed to file Notices of Appeal within the 90 days required.  They each applied to the Tax Court for an order extending the time to file Notices of Appeal.  The Court dismissed the application on the basis that they had not made a case that it would be “just and equitable” to grant the extensions sought in light of the conduct of the taxpayers and their representatives.

Decision:   The facts were not complex:

[2]              Each of the five Applicants participated in a donation programme in the 2002 or 2003 taxation year and claimed corresponding donation tax credits for those years. The donation programme was promoted by Initiatives Canada Corporation (“ICC”). The Applicants’ agent in all of these applications, Robert Mattacchione, was the Chief Executive Officer of ICC. Mr. Mattacchione is also affiliated with another company called PAC Protection Corporation (“PAC”) which was involved in assisting the Applicants to appeal their reassessments.

[3]              Each of these Applicants was reassessed by the Minister of National Revenue (the “Minister”) in respect of the donation arrangement, and each Applicant objected to the reassessment. After some considerable delay, each Applicant’s reassessment was confirmed by the Minister in July and August of 2014. Each Applicant had 90 days from the date of the mailing of the Notice of Confirmation within which to file a Notice of Appeal with this Court. Each Applicant failed to do so. It is their position that a lawyer, Mr. Tony DeBartolo, retained by ICC through Mr Mattachione, failed to file the Notices of Appeal in a timely fashion. Hence, each Applicant has filed an application for an order extending the time to file a Notice of Appeal with this Court pursuant to s. 167 of the Income Tax Act, R.S.C., 1985, c. 1 (5th Supp.) (the “Act”).

The Tax Court found that the failure to file Notices of Appeal by Mr. DeBartolo stemmed from the failure to pay him for his work, not from negligence on his part:

[38]         I agree with Justice Visser and I arrive at the same conclusion based on all the evidence that I have heard. In the cases before me, I do not find that Mr. DeBartolo was in fact negligent; he was simply standing firm that he would do no work on new files unless he was paid – not an unreasonable position to take. Even if it can be found that Mr. DeBartolo was negligent, I am driven to the conclusion that ICC, PAC and/or Mr. Mattacchione demonstrated great negligence in failing to file the applications for extension of time. PAC dithered and delayed, providing Mr. DeBartolo with no additional retainer funds and did nothing to honour the terms of the retainer agreement even though it knew that time was of the essence and even though it knew that Mr. DeBartolo would do no further work without being paid. No efforts were made to retain alternate counsel or legal representation once the relationship with Mr. DeBartolo broke down even though other counsel, such as Robert Kepes, was undoubtedly available. I am of the view, as was Justice Visser in Sapi, that each of the five Applicants also failed to take adequate steps to follow up with PAC to ensure that their respective Notices of Appeal were filed on a timely basis. Any neglect or carelessness by ICC, PAC, Mr. Mattacchione or any counsel engaged to file the appeals in question, is not a just and equitable reason to grant these five applications.

Since the taxpayers had not adduced evidence of any “just and equitable” reason to extend the time for filing Notices of Appeal the five applications were dismissed, without costs.