Spence v. Canada Revenue Agency, (2010) 382 F.T.R. 1 (FC)

• Judge: O'Keefe, J.
• Court: Federal Court (Canada)
• Case Date: December 07, 2009
• Jurisdiction: Canada (Federal)
• Citations: (2010), 382 F.T.R. 1 (FC);2010 FC 52

Spence v. CRA (2010), 382 F.T.R. 1 (FC)

MLB headnote and full text

Temp. Cite: [2010] F.T.R. TBEd. JA.043

Ian Spence (applicant) v. Canada Revenue Agency (respondent)

(T-632-09; 2010 FC 52)

Indexed As: Spence v. Canada Revenue Agency

Federal Court

O'Keefe, J.

January 19, 2010.

Summary:

The taxpayer sought fairness relief under s. 220(3.1) of the Income Tax Act. A representative of the Canada Revenue Agency dismissed the application. The taxpayer applied for judicial review.

The Federal Court allowed the application. The court remitted the matter to a different representative.

Income Tax - Topic 3904

Interpretation - General - Interpretation bulletins or information circulars - Effect of - [See Income Tax - Topic 9204 ].

Income Tax - Topic 9204

Enforcement - General - Fairness legislation (incl standard of review) - H & R Block made a mistake when it prepared the taxpayer's tax return - This resulted in a reimbursement overpayment of $123.98, omission penalties of $7,243.80 and interest arrears of $380.05 - The taxpayer sought fairness relief under s. 220(3.1) of the Income Tax Act - One complaint was that the penalty assessed was 58.42 times the amount of the reimbursement overpayment - The representative of Canada Revenue Agency denied the application, saying that "The Taxpayer Relief provisions do not allow for the cancellation of penalties and interest in these types of situations" - The Federal Court applied the reasonableness standard of review and quashed the decision as erroneous - The nature of the error was the representative's apparent opinion that the taxpayer relief provisions, contained in Income Tax Information Circular No. IC07-1, were binding law - In fact, the Circular's provisions specified that they were only guidelines and gave discretion not to limit relief to extraordinary circumstances, actions of the Canada Revenue Agency or inability to pay - In addition, relief was available for third-party errors - See paragraphs 1 to 36.

Cases Noticed:

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. 17].

Khosa v. Canada (Minister of Citizenship and Immigration), [2009] 1 S.C.R. 339; 385 N.R. 206; 2009 SCC 12, consd. [para. 19].

Maple Lodge Farms Ltd. v. Canada and Minister of Economic Development, [1982] 2 S.C.R. 2; 44 N.R. 354, refd to. [para. 24].

Authors and Works Noticed:

Brown, D.J.M., and Evans, J.M., Judicial Review of Administrative Action in Canada (1998, loose-leaf updated July 2008), p. 12:44 [para. 24].

Income Tax Information Circular No. IC07-1, para. 6 [para. 25]; para. 24 [para. 27]; para. 25 [para. 28]; para. 35 [para. 29].

Counsel:

Kevin C. Mellor, for the applicant;

Lyle Bouvier, for the respondent.

Solicitors of Record:

Mellor Law Firm, Regina, Saskatchewan, for the applicant;

John H. Sims, Q.C., Deputy Attorney General of Canada, Ottawa, Ontario, for the respondent.

This application was heard at Regina, Saskatchewan, on December 7, 2009, by O'Keefe, J., of the Federal Court, who delivered the following decision at Ottawa, Ontario, on January 19, 2010.