Collver, J.:—This is an application by the respondents occasioned by an administrative error by a Collections Investigations Officer. The respondents seek relief from their failure to make a timely reply to the appellant’s notice of appeal against a substantial assessment levied under four Federal and Provincial statutes.
On January 6, 1989 a notice of assessment under the Income Tax Act of Canada, the Income Tax Act of British Columbia, the Unemployment Insurance Act, and the Canada Pension Plan, alleging liability for $85,830.90 in unpaid deductions, penalties, and interest, payable by Kaywood Industries Inc., was mailed to the appellant. The appellant is alleged to have been a Director of the debtor company at all material times.
The appellant mailed his notice of objection on March 31, 1989, and filed his notice of appeal on August 3, 1989. Three copies of the notice of appeal were mailed to the Deputy Minister of National Revenue on August 4, 1989, and received at his office on August 14, 1989. That is when things got off the rails.
Apparently, notices-of appeal from provincial income tax assessments are rare. Denis McClure, Section Head of the Vancouver Designated Appeals Office of Revenue Canada, Taxation, deposes to seeing only one other such appeal in his experience. Although Mr. McClure did not indicate his length of service, his statement as to the rarity of this procedure was not challenged at the hearing of this application.
Mr. McClure described the protracted bureaucratic course these notices of appeal take before they ultimately reach the desk of counsel at the Vancouver Regional Office of the Department of Justice, for conduct of the appeal. This circuitous procedure is avoided with respect to appeals from federal income tax assessments, which are simply filed directly at the Tax Court of Canada, or the Federal Court, without being served on the Deputy Minister of National Revenue.
Mr. McClure further deposes to receiving his first information about this matter when the appellant's notice of motion (filed on November 2, 1989) seeking allowance of his appeal was received at the Vancouver Designated Appeals office on November 27, 1989. Frantic searches began.
Kenneth D. Bergen, a Collections Investigation Officer in the Vancouver District Office of Revenue Canada, received the appellant's notice of appeal, stapled to a covering letter from the appellant's lawyer, between August 15, and September 1, 1989. The mistake he then made was not such an unreasonable one.
Assuming, incorrectly, that the notice of appeal had already been sent to the Designated Appeals office in Vancouver, Mr. Bergen treated the copies attached to the appellant's lawyer's letter as "courtesy" copies, and placed them in his file. He did not look at them again until December 13, 1989, when he was working on other collection matters involving the appellant, and realized that the notice of appeal was the document which Mr. McClure had been recently searching for.
The surprised Mr. Bergen deposes to never before seeing a copy of a notice of appeal at his office which had not previously been sent to the Designated Appeals Office.
Note of this much impresses the appellant. Understandably, he takes the position that having botched the reply process, the respondents should not be allowed to patch things up. I am not convinced that that is a tenable position.
When the appellant's application to have his appeal allowed came before the court on December 1, the respondents were granted an adjournment to December 15 to bring this application. Meanwhile, another error had been made.
When the appellant's notice of motion was received at the Tax Litigation Section of the Department of Justice, instructions to respond to the application were given, but exceeded. Through inadvertence, a reply to the notice of appeal was filed on November 30, and served on the appellant, obviously without an order of the court.
Thus the respondents' notice of motion seeks either a declaration that the November 30 service and filing be deemed valid, or that in the alternative the respondents now be allowed to serve and file their reply.
Authority to file a reply after the allotted time is found in section 27 of the Act, which states, in part:
The Provincial minister shall, within 60 days from the day the notice of appeal is received, or within a further time as the court may either before or after the expiration of that time allow, serve on the appellant and file in the court a reply to the notice of appeal . . .
Pursuant to long-standing arrangements, the conduct of appeals of provincial assessments is undertaken by the Federal Department of Justice, since such appeals are generally handled in conjunction with appeals from Federal assessments, as is the case here.
In support of their respective positions, counsel have cited a number of cases dealing with non-compliance, mainly with reference to the provisions of the Income Tax Act of Canada. Those cases involve a variety of circumstances where leave to extend time for filing was dealt with. There seem to be no precedents arising out of failure to comply with the British Columbia statute.
Be that as it may, it seems to me the questions to be answered are as follows:
(1) Has the delay been inordinate?
(2) Has the delay been satisfactorily explained?
(3) Has an application to address the issue been made as soon as possible?
(4) Has the appellant been seriously prejudiced by the delay?
The delay here has not been long. It has been explained, much to the embarrassment of Mr. Bergen. The application to deal with it has been prompt.
What of prejudice to the appellant? With respect, I see none.
A copy of the improperly filed reply has been attached to the affidavit material filed in support of this application. It mentions the appellant's involvement with Kaywood Industries Inc. at the time of the company's alleged failure to remit the disputed funds mentioned in the notice of assessment of January 6, 1989.
The Deputy-Minister has not broken down the various amounts which make up the total liability alleged in the notice. However, it seems to me that the appellant, as a Director of the now defunct company, possesses special information about its affairs which would, on the basis of the negotiations which preceded the issuance of the notice, still be available to him.
The notice refers to earlier assessments made in February and June of 1987. The reply refers to the failure of the company to remit in late 1986 and early 1987. Surely the ability of the appellant to either recall or accumulate information from this period in the company's history is unlikely to be significantly affected by reason of the minor delay occasioned by Mr. Bergen's error.
It may seem ironic that the respondents' actions were prompted solely by the appellant’s application to have his appeal allowed, by reason of the inactivity of the respondents. However, I believe it would be an unreasonable exercise of my discretion to deny the present application, particularly where I am satisfied that the respondents' error can be satisfactorily addressed in costs.
For the above reasons, the application of the respondents is allowed, with costs to the appellant, both in this and his December 1 application. The respondents will have 30 days within which to file their reply to his notice of appeal.
Application granted.