Akanda Innovation Inc. v. The Queen (February 19, 2018 – 2018 TCC 35, Rossiter C.J.).
Précis: The taxpayer’s appeal was dismissed when it failed to send a representative to attend a status hearing. The dismissal came after a somewhat involved history of non-compliance by the taxpayer. The taxpayer retained new counsel who moved to extend the time to file a motion to set aside the judgment of dismissal and, if successful, to set aside the judgment of dismissal. Chief Justice Rossiter dismissed the application in view of the prejudice to the Crown and the absence of a credible explanation of the taxpayer’s preceding delay. There was no order as to costs.
Decision: The prior history of the underlying tax appeal was a bit convoluted:
 The facts are fairly simple:
a. The Appellant, Akanda Innovation Inc., brought forward a motion pursuant to General Procedure Rule 12 to extend the period of time that the Appellant has under subsection 140(2) of the Tax Court of Canada Rules (General Procedure) to have a judgment set aside, as well as to set aside that judgment which resulted from the failure to attend a status hearing on March 7, 2017.
b. In May and July, 2013, the Minister reassessed the Appellant to deny them SR&ED expenditures and related investment tax credits (“ITCs”) for the 2007, 2008, 2009 and 2010 taxation years.
c. Barrett Tax Law was retained by the Appellant to act as counsel. The Notices of Appeal were apparently drafted in a short period of time. The service that drafted the Notices of Appeal terminated its work on the pleadings and the counsel who was looking after the file with Barrett Tax Law resigned from the firm. Nonetheless the Notice of Appeal for the 2007, 2008 and 2009 taxation years was filed on November 18, 2015. The Notice of Appeal for 2010 was not submitted on time. Instead, an application for extension of time needed to be filed which was granted by the Court with a Notice of Appeal being created from the application itself.
 An Order from the Court dated September 12, 2016 granted an extension of time to file the Appellant’s list of documents as well as set out a timetable for other pre-trial steps. Difficulties of communications in relation to the firm acting for the Appellant resulted in the Appellant never serving the list of documents. Apparently due to irreconcilable differences, the Appellant’s counsel removed themselves as counsel of record on January 6, 2017 but had filed a motion to amend the September 12, 2016 Order on January 12, 2017. On January 18, 2017 the Order was granted and the Appellant was however required to inform the Court before February 10, 2017 of new counsel. This was not complied with by the Appellant.
 In an e-mail from the Appellant’s former counsel to the Appellant dated January 12, 2017 it was noted that the judge can take up to two weeks to issue a decision but “for now the Appellant should proceed as though the Court had granted their request”. The Appellant was also advised to retain new counsel. On March 7, 2017 a status hearing was held and the Respondent made a motion pursuant to Rule 125(8) and Rule 140(1) of the General Procedure Rules to have the appeal dismissed. Neither the Appellant nor Appellant’s counsel were present at the hearing. The Respondent’s motion was granted and the appeal was dismissed.
The taxpayer retained new counsel who made strenuous efforts to set aside the judgment but was ultimately unable to persuade Chief Justice Rossiter:
c. There is no prejudice to the Respondent arising from the delay. This is a requirement which is problematic for the Appellant. The Respondent asserts that the Appellant does not appear to have completed discovery obligations. There can be no dispute in this particular claim as looking at the relative effects of granting the motion, to allow the motion to succeed would likely disproportionately prejudice the Respondent due to the failure of the Appellant to carry out the fundamental obligation in litigation; that is, their discovery obligations. It is the Appellant’s fundamental obligation to prosecute the appeal on a timely basis – this does not occur.
d. A reasonable explanation is given for the delay. I do not believe that this requirement has been satisfied. The Appellant claims that their lack of compliance with the Tax Court of Canada procedures was because of an e-mail received from their counsel saying that the Court had been satisfied of its intention to pursue the appeal. Because of this mistaken belief, the Appellant thought that the next step was to file a list of documents. As a result, no one appeared at the status hearing. This is simply not the case and the e-mail does not reflect this exchange. The Appellant was receiving Tax Court of Canada correspondence from at least the date of Appellant’s counsel withdrawing as counsel of record, including the January 19, 2017 Order requiring the Appellant to find new counsel and inform the Court of a new counsel of record by February 10, 2017. The e-mail of the Appellant’s counsel sent on January12, 2017 does not say what the Appellant claims it says as the e-mail never mentions the status issue has been resolved like the Appellant claims. What the e-mail does say is that he judge can take up to two weeks to issue a decision but for now the Appellant should proceed as though the Court has granted the request. This of course does not, in any way, guarantee that the issue has been resolved – only saying to proceed as thought the Court has been satisfied until contradicted by the evidence. The e-mail also suggests hiring new counsel, advice which was not heeded by the Appellant until after the March status hearing.
Thus the application was dismissed. There was no order as to costs.