Date: 20050311
Citation: 2005 FC 358
BETWEEN:
SCOTT SLIPP NISSAN LIMITED
Applicant
and
ATTORNEY GENERAL OF CANADA
Respondent
[1] This is an appeal from the decision of Prothonotary Morneau, dated February 17, 2005, dismissing the respondent's motion for an extension of time to file the respondent's application record.
FACTS
[2] The facts areas follows. By notice of application, dated November 24, 2003, the applicant sought judicial review of a decision of Ms. Sandy Denny of the Canada Revenue Agency ("CRA") refusing full disclosure of documents requested by the applicant.
[3] The documents which were refused came within the definition of confidential information in section 295 of the Excise Tax Act.
[4] The applicant asked this Court to set aside the decision and refer the matter back with the direction.
[5] The applicant's affidavit was filed on December 22, 2003.
[6] The respondent filed a motion to strike the application on February 6, 2004. The motion was heard on February 18, 2004. On August 10, 2004, the Court dismissed the motion. The respondent was given 10 days to file its affidavits.
[7] The respondent filed its affidavit on August 20, 2004.
[8] On August 31, 2004, a notice of status review was sent to the parties requiring the applicant to show cause why the application should not be dismissed for delay.
[9] On September 21, 2004, the applicant attempted to file its application record.
[10] On October 8, 2004, the Court disposed of the notice of status review by ordering the applicant's application record to be filed forthwith. The Court also granted the respondent 30 days to file his application record. As a result, the respondent's application record was to be filed on or before November 8, 2004.
[11] On November 8, 2004, the respondent wrote to the applicant advising of a further decision of the CRA. The CRA had decided (if the assessments against the applicant would not be vacated) to notify the providers of the confidential information of its intention to release the information to the applicant. If the providers did not initiate legal proceedings to object to the release the CRA would release the confidential information to the applicant.
[12] On November 12, 2004, the applicant filed a motion record asking that the application be set down for hearing.
[13] On November 23, 2004, the respondent filed a motion record asking that the application be dismissed on the grounds of mootness relying on the November 8, 2004 decision of CRA.
[14] On January 10, 2005, the Court dismissed the respondent's motion for mootness and allowed the applicant's motion to set down the motion and referred the matter to the Judicial Administrator to set a hearing date.
[15] On January 19, 2005, the respondent filed an application to extend the time for filing its motion record pursuant to Rule 8 of the Federal Court Rules.
[16] By decision dated February 17, 2005, Richard Morneau, Esq., Prothonotary, dismissed the respondent's application.
[17] The hearing of the application filed November 23, 2004 is now set down for April 6, 2005 in Halifax.
STANDARD OF REVIEW
[18] The test for reviewing decisions of prothonotaries is set out in Merck & Co. v. Apotex Inc., [2003] F.C.J. No. 1925 at para. 19 (F.C.A.), where Décary, stated:
Discretionary orders of Prothonotaries ought not be disturbed on appeal to a judge unless:
a) the questions raised in the motion are vital to the final issue of the case, or
b) the orders are clearly wrong, in the sense that the exercise of discretion by the Prothonotary was based upon a wrong principle or upon a misapprehension of the facts.
If the order meets one of the above criteria, the discretion of the reviewing judge must be exercised de novo.
[19] In this case the result of the respondent not receiving an extension to file its application record is quite drastic. The respondent will not be able to file its memorandum of facts and argument and the Court will have to decide the application solely on the basis of the applicant's record. Such a result would deprive the Court of the benefit of respondent's submissions which, in my view, would be vital to the final outcome of the application. Accordingly, I will review this matter de novo.
[20] The test for deciding whether to grant extensions of time to file is set out in Canada (A.G.) v. Hennelly (1999), 244 N.R. 399 where MacDonald J.A. stated:
The proper test is whether the applicant has demonstrated
1. a continuing intention to pursue his or her application;
2. that the application has some merit;
3. that no prejudice to the respondent arises from the delay; and
4. that a reasonable explanation for the delay exists.
[21] Prothonotary Morneau correctly referred to this case and found that two of the four criteria, namely a continuing intention to pursue the application and the reasonable explanation for the delay, had not been satisfied.
[22] Upon examining the record I find that the issues of 'intention to continue' and 'reasonable explanation for delay' are intertwined.
[23] Respondent's counsel clearly assumed that the new decision of his client, the CRA, would render this issue moot. As he stated in his letter to the court registrar of November 8, 2004:
I refer to Mr. Russell's letter of November 1, 2004, to the Court enclosing a Requisition for Hearing. As my enclosed letter of today's date to Mr. Russell indicates, I have received instructions which may render his client's application moot. In these circumstances I ask that the matter not be set down for hearing on November 17, 2004.
He therefore did not file his record by November 8, 2004.
[24] However prior to the issue of mootness arising, counsel for the respondent had also indicated his willingness to proceed. Indeed in the applicant's requisition for hearing filed November 9, 2004 it is stated that:
The parties are available particularly on November 17, 2004 and at any time thereafter except November 26, 2004, December 2, 2004, December 10, 2004, January 4 - 6, 2005 and January 18, 2005.
[25] At the hearing of this appeal counsel for the applicant confirmed that these dates had been agreed upon between opposing counsel. Agreeing on a date for a potential hearing (should the matter not become moot) is surely a good indication that a party intends to proceed with the application.
[26] Similarly because he assumed (wrongly as one can state with hindsight) that the issue would be resolved outside the courts, respondent's counsel did not move immediately to ask for an extension of time. It was only when the application for mootness was dismissed that the application for an extension of time was filed. While this does not necessarily excuse the delay, it does it explain it to some extent. It is not surprising that this explanation was found wanting by Prothonotary Morneau, given that respondent's application before Prothonotary Morneau was not accompanied by an affidavit and addressed both these issues in one mere paragraph of his submission.
[27] Applications for extensions of time are very fact specific and as noted in Henelly, supra:
4. Any determination of whether or not the applicant's explanation justifies the granting of the necessary extension of time will turn on the facts of each particular case.
[28] The application here involves the interpretation of s. 295 of the Excise Tax Act, R.S.C. 1985 c. E-15, as amended. This determination will affect not only the applicant but all taxpayers having to remit GST. Such a profound decision should not be rendered on the basis of a one-sided argument. It is in the Court's interest, as well as the litigants, that this issue be properly canvassed and argued before a decision is rendered.
[29] As stated by Giles, Associate Senior Prothonotary, in Mennes v. Warkworth Institution, [2001] F.C.J. No. 944:
1. ... The Motion for extension of time is opposed by the Applicant. I do not intend to go into all the matters raised by the Applicant in opposing the Motion, but will state unequivocally that it is my opinion that counsel for the Respondents has neither provided acceptable excuses for the delay, nor persuaded me that the Respondents should be granted the relief they seek. However, it is in the interests of the Court, and I believe of the Applicant, that the position that the Respondents intend to take at the hearing should be known, and that the Court should not be placed in the position of having to assess the Applicant's position without any representations by the Respondents. A record would place the Court and the Applicant on notice of the position which the Respondents intend to take. This would be accomplished by the Memorandum of Law and Fact in the record. Also, any transcripts not in the Applicant's record should be available to the Court.
[30] Counsel for the respondent did not act prudently when conveying the change of position by CRA and not overly quickly once the revised CRA decision did not render the issue moot. There seems to have been an assumption that this was as routine application and the Court's consent to his motion to extend the time for filing would be more or less automatic .
[31] Clearly the lateness in bringing his motion to extend the time for filing will inconvenience the applicant, given that the hearing has been set down for April 6, 2005. However, I note that any inconvenience to the applicant resulting from giving the respondent an extension to file his application record can be remedied by costs or by delaying the date of hearing or both. By contrast any decision based on one-sided argument could potentially set a wrong or misleading precedent, could cause havoc with the administration of the GST and would not be in the best interest of an efficient and orderly administration of justice .
[32] Accordingly, taking into account the foregoing considerations (which were not addressed by Prothonotary Morneau) I feel compelled to allow the appeal from the decision of Prothonotary Morneau and grant the extension to file the respondent's application record .
[33] However to compensate the applicant for any inconvenience resulting from this very avoidable delay, the applicant shall have his costs in this appeal and in the motion before Prothonotary Morneau on a party and his own solicitor basis, payable regardless of the final outcome of the his original application (dated November 24, 2003).
[34] To avoid any further delays, the respondent shall only have 48 hours to file his application record.
[35] If requested, the Court will favourably consider any request by the applicant to postpone, by up to three months, the hearing of the motion slated for April 6, 2005.
"K. von Finckenstein"
Judge
Ottawa, Ontario
March 11, 2005
FEDERAL COURT
NAMES OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: T-2195-03
STYLE OF CAUSE: SCOTT SLIPP NISSAN LIMITED
AND
ATTORNEY GENERAL OF CANADA
PLACE OF HEARING: HALIFAX, NOVA SCOTIA
DATE OF HEARING: MARCH 10, 2005
REASONS FOR ORDER : von FINCKENSTEIN J.
DATED: MARCH 11, 2005
APPEARANCES:
Bruce Russell FOR APPLICANT
Valerie Miller FOR RESPONDENT
SOLICITORS OF RECORD:
McInnes Cooper FOR APPLICANT
Halifax, Nova Scotia
John H. Sims, Q.C. FOR RESPONDENT
Deputy Attorney General of Canada