INCOME TAX |
Practice |
MacKinnon v. Canada
T-2220-01
2002 FCT 824, Rothstein J.A.
26/7/02
7 pp.
Application for judicial review of M.N.R.'s decision, apparently by way of statement of account, showing balance owing by applicant of $164,454 as of that date for taxes, Canada Pension Plan, interest, penalties--Applicant arguing vast bulk of indebtedness statute barred--Certificate filed in January 1988 covering applicant's 1979 to 1984 taxation years inclusive--In December 1989, applicant signed hypothecation agreement with M.N.R. acknowledging indebtedness for years 1979 to 1984--From September 1989 to August 1999, applicant made over 50 payments--M.N.R.'s cause of action arising upon assessment or reassessment issuing, elapsing of relevant delay period under Income Tax Act, s. 225.1(1): Markevich v. Canada, [2001] 3 F.C. 449 (C.A.)--Relevant limitation period of six years under B.C. Limitation Act, s. 3(5)--M.N.R. conceding causes of action, in respect of applicant's 1979, 1980 taxation years statute barred, but arguing certificate filed in Federal Court in January 1988 less than six years after other assessments, reassessments issued, permitting action to be brought on certificate within six years thereafter--Applying Ross v. Canada (2002), 2002 DTC 6884 (F.C.T.D.), certificate herein would permit M.N.R. to bring action or take statutory proceedings until January 1994--Hypothecation agreement of December 1989 acknowledged M.N.R.'s cause of action, therefore constituted confirmation of it under Limitation Act, s. 5(2)(a)(ii)--Thereafter, each payment by applicant constituted confirmation, extending limitation period after each payment for further six years--As last payment occurred in August 1999, limitation period has not yet expired, applicant's indebtedness not extinguished, M.N.R. may take steps by action or statutory collection procedures to enforce collection--Open to M.N.R. to allocate payments to oldest indebtedness first: Clayton's Case (1816), 35 E.R. 781; Agricultural Insurance Co. v. Sargeant (1896), 26 S.C.R. 29--Application dismissed, except with respect to 1979, 1980 taxation years, in view of M.N.R.'s concession, as statute barred--Although Markevich, Ross cases under appeal, Court cannot keep matter open for subsequent redetermination pending outcome of appeals--Decision issuing on basis Markevich, Ross decisions correctly decided; up to parties to appeal if they wish to preserve their rights should appeals in Markevich, Ross be successful--Limitation Act, R.S.B.C. 1996, c. 266, ss. 3(5), 5(2)(a)(ii)--Income Tax Act, R.S.C., 1985 (5th Supp.), c. 1, s. 225.1(1) (as am. by S.C. 1994, c. 7, Sch. VIII, s. 131; 1998, c. 19, s. 225).