Frank Arthur Inv. Inc. v. MNR (2014), 452 F.T.R. 252 (FC)
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[French language version follows English language version]
[La version française vient à la suite de la version anglaise]
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Temp. Cite: [2014] F.T.R. TBEd. AP.030
Frank Arthur Investments Inc. (applicant) v. Minister of National Revenue (respondent)
(T-548-13; 2014 FC 336; 2014 CF 336)
Indexed As: Frank Arthur Investments Inc. v. Minister of National Revenue
Federal Court
Gagné, J.
April 7, 2014.
Summary:
Frank Arthur Investment Inc. (Frank Arthur) applied for judicial review of a decision of an Assistant Commissioner of the Canada Revenue Agency (CRA), acting as delegate for the Minister of National Revenue. In its decision, the CRA refused to exercise the discretionary power granted by s. 23(2) of the Financial Administration Act and so did not elect to recommend the remission of penalties and interests that accrued from October 1990 to April 2004 on a federal sales tax assessment issued on January 25, 1991.
The Federal Court dismissed the application.
Sales and Service Taxes – Topic 5212
Goods and Services Tax (incl. Harmonized Sales Tax) – Administration, collection and enforcement – General – Remission on basis of fairness or public interest – On January 25, 1991, Frank Arthur Investment Inc. (Frank Arthur) was assessed pursuant to the Excise Tax Act (ETA) for an amount of $115,972.50, comprising $96,749.90 in federal sales tax, $12,986.47 in interest and $6,236.13 in penalties for the period covering April 1, 1987 to October 31, 1990 – Frank Arthur filed an opposition with the Canada Revenue Agency (CRA) – On February 7, 1992, the Canadian International Trade Tribunal (CITT) rendered a decision in favour of Les Industries Vogue Ltée (Vogue), one of Frank Arthur’s competitors – This decision was favourable to Frank Arthur’s opposition – As a result, the CRA put Frank Arthur’s opposition file in abeyance – The CRA appealed the CITT decision in the Vogue file – On March 17, 1998, Frank Arthur’s opposition was finally dismissed by the CRA’s opposition division – On June 17, 1998, Frank Arthur filed an appeal of the CRA’s negative decision before the CITT, but it requested that the latter put the file in abeyance, pending a final decision in the Vogue file – On May 29, 2000, the Federal Court granted the CRA’s appeal in the Vogue file – As such, this was unfavourable for the applicant’s opposition – The Federal Court of Appeal and the Supreme Court of Canada confirmed the decision – Despite the final decision in the Vogue file, Frank Arthur maintained its appeal before the CITT, now claiming its facts were distinguishable from those of Vogue’s case – However, on February 18, 2004, it withdrew its appeal – In April 2004, Frank Arthur paid most of its debt to the CRA, aside from $1,994.30 in interest – In December 2004, Frank Arthur filed a fairness relief request with the CRA pursuant to s. 88 of the ETA, which was dismissed by the first and second levels of the Fairness Committee – Frank Arthur did not file an application for judicial review – Rather, it filed a remission request – The request was denied – Frank Arthur applied for judicial review, asserting that the decision was unreasonable because the CRA misunderstood, misinterpreted or failed to consider certain relevant facts – The Federal Court dismissed the application – The CRA considered all the relevant evidence of the file and followed remission guidelines – The decision was reasonable – See paragraphs 37 to 47 and 51.
Sales and Service Taxes – Topic 5212
Goods and Services Tax (incl. Harmonized Sales Tax) – Administration, collection and enforcement – General – Remission on basis of fairness or public interest – On January 25, 1991, Frank Arthur Investment Inc. (Frank Arthur) was assessed pursuant to the Excise Tax Act (ETA) for an amount of $115,972.50, comprising $96,749.90 in federal sales tax, $12,986.47 in interest and $6,236.13 in penalties for the period covering April 1, 1987 to October 31, 1990 – Frank Arthur filed an opposition with the Canada Revenue Agency (CRA) – On February 7, 1992, the Canadian International Trade Tribunal (CITT) rendered a decision in favour of Les Industries Vogue Ltée (Vogue), one of Frank Arthur’s competitors – This decision was favourable to Frank Arthur’s opposition – As a result, the CRA put Frank Arthur’s opposition file in abeyance – The CRA appealed the CITT decision in the Vogue file – On March 17, 1998, Frank Arthur’s opposition was finally dismissed by the CRA’s opposition division – On June 17, 1998, Frank Arthur filed an appeal of the CRA’s negative decision before the CITT, but it requested that the latter put the file in abeyance, pending a final decision in the Vogue file – On May 29, 2000, the Federal Court granted the CRA’s appeal in the Vogue file – As such, this was unfavourable for the applicant’s opposition – The Federal Court of Appeal and the Supreme Court of Canada confirmed the decision – Despite the final decision in the Vogue file, Frank Arthur maintained its appeal before the CITT, now claiming its facts were distinguishable from those of Vogue’s case – However, on February 18, 2004, it withdrew its appeal – In April 2004, Frank Arthur paid most of its debt to the CRA, aside from $1,994.30 in interest – In December 2004, Frank Arthur filed a fairness relief request with the CRA pursuant to s. 88 of the ETA, which was dismissed by the first and second levels of the Fairness Committee – Frank Arthur did not file an application for judicial review – Rather, it filed a remission request – The request was denied – Frank Arthur applied for judicial review, asserting that the Commissioner fettered his discretion by relying on the conclusions of the Fairness Committee in determining whether Frank Arthur was eligible or not for a remission order based on the criteria of the fairness relief provisions – The Federal Court dismissed the application – See paragraphs 48 to 50.
Cases Noticed:
Axa Canada Inc. v. Minister of National Revenue et al. (2006), 296 F.T.R. 46; 2006 FC 17, refd to. [para. 24].
Waycobah First Nation v. Canada (Attorney General) (2010), 378 F.T.R. 262; 2010 FC 1188, affd. (2011), 421 N.R. 193; 2011 FCA 191, refd to. [para. 24].
Twentieth Century Fox Home Entertainment Canada Ltd. v. Canada (Attorney General) et al. (2012), 414 F.T.R. 291; 2012 FC 823, affd. (2013), 444 N.R. 83; 2013 FCA 25, refd to. [para. 26].
New Brunswick (Board of Management) v. Dunsmuir, [2008] 1 S.C.R. 190; 372 N.R. 1; 329 N.B.R.(2d) 1; 844 A.P.R. 1; 2008 SCC 9, refd to. [para. 32].
Germain v. Canada (Attorney General) (2012), 414 F.T.R. 127; 2012 FC 768, refd to. [para. 35].
Counsel:
Christopher R. Mostovac and Julie Tremblay, for the applicant;
Louis Sébastien and Mathieu Tanguay, for the respondent.
Solicitors of Record:
Starnino Mostovac SENC, Montreal, Quebec, for the applicant;
William F. Pentney, Deputy Attorney General of Canada, Montreal, Quebec, for the respondent.
This application was heard at Montreal, Quebec, on February 26, 2014, by Gagné, J., of the Federal Court, who delivered the following judgment at Ottawa, Ontario, on April 7, 2014.
