Couture v Canada (Revenue Agency) — How not to conduct a judicial review
Federal Court applications for judicial review must include essential or minimum elements, facts or legal grounds, indicating unreasonable CRA decisions
Introduction: The Federal Court Grants Motion to Strike Notice of Application
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David J Rotfleisch, CPA, JD is the founding tax lawyer of Taxpage.com and Rotfleisch & Samulovitch P.C., a Toronto-based boutique tax law corporate law firm. |
Couture v Canada (Revenue Agency), 2024 FC 1283 is a case that involves an application for judicial review of a Canada Revenue Agency decision related to the Applicant's eligibility for the Canada Recovery Benefit (CRB). A motion was brought by the CRA to dismiss the notice of application for judicial review. The CRA's position was that the Applicant's pleadings were not adequate. Ultimately, the Federal Court agreed with the CRA and granted the CRA's motion to strike the notice of application.
This case illustrates how not to conduct a judicial review, as the Applicant failed to include the essential or minimum elements for an application.
Federal Courts Act and Rules Related to an Application for Judicial Review
Under s.18.1(1) of the Federal Courts Act, an application for judicial review can be made by anyone directly affected by the matter. Generally, under s.18.1(2), the deadline to file an application for judicial review is 30 days after the decision was first communicated to the affected party. Under subsection 18.1(4), the Federal Court may grant relief if it is satisfied that a federal administrative body, such as the CRA, has done any of the following actions:
(a) The administrative body acted without jurisdiction, acted beyond its jurisdiction or refused to exercise its jurisdiction;
(b) failed to observe a principle of natural justice, procedural fairness or other procedure that it was required by law to observe;
(c) erred in law in making a decision or an order, whether or not the error appears on the face of the record;
(d) based its decision or order on an erroneous finding of fact that it made in a perverse or capricious manner or without regard for the material before it;
(e) acted, or failed to act, by reason of fraud or perjured evidence; or
(f) acted in any other way that was contrary to law.
If the administrative body performs any of these listed actions, then the Court may exercise its powers under s.18.1(3) during a Federal Court appeal, which includes setting aside the decision and referring it back for determination.
The Federal Courts Rules prescribe the information that must be included in a notice of application for judicial review. For example, paragraphs 301(d) and (e) state that a precise statement of relief sought and a complete and concise statement of the grounds intended to be argued must be set out in the notice of application.
Failing to include these required details in a notice of application can be fatal to a judicial review. Vague or general claims, such as general allegations of procedural unfairness or unreasonableness without explanation or references to statutes or rules, are insufficient and may result in the application being struck out.
Jurisprudence — Circumstances When a Motion to Strike an Application for Judicial Review Will be Granted
In this case, the Court referred to Regroupement des pêcheurs professionnels du sud de la Gaspésie v Listguj Mi'gmaq First Nations, 2023 FC 1206 (CanLII) to provide a summary of the law applicable to motions to strike notices of application for judicial review.
In that case, the Federal Court cited JP Morgan Asset Management (Canada) Inc v Canada (National Revenue), 2013 FCA 250 as the leading case on the test on this issue. A general rule that comes from this case is that a motion to strike a notice of application for judicial review will only be granted if there is no chance of success.
Further, in Wenham v Canada (Attorney General), 2018 FCA 199, the Federal Court of Appeal outlined three stages of judicial review and how an application can fail at any one of these stages. The three stages are: preliminary objections, the merits of the review, and relief. An application may fail at the preliminary objections stage if the application itself is not brought within the time limit prescribed by the Federal Courts Act or if there is another avenue for relief.
At the merits of review stage, an application may fail at the outset if, for example, an application is based on procedural defects in a decision where the applicant has waived his or her rights to those procedural rights. Finally, at the relief stage, the application may fail because the relief that is sought is simply not available.
Application to the Case — The Federal Court Agrees with the CRA that the Notice of Application was Flawed
The CRA's motion to strike was based on the premise that the content in the Applicant's notice of application was fundamentally flawed. The Notice of Application failed to include any facts or legal grounds indicating that the CRA's decision was unreasonable.
It also provided no material details about the decision itself that could be reviewed. In contravention of Rules 301(d) and (e) of the Federal Courts Rules, the Applicant did not specify the relief being sought or offer a complete and concise statement of the grounds she intended to argue. These omissions meant that the Applicant failed to meet the basic pleading requirements.
The Court further affirmed that a failure to plead allegations that, if proven, could justify judicial intervention is fatal to the application. Accordingly, the Court agreed with the CRA that the Notice of Application lacked the essential elements for the application to have a chance of success.
In addition, the Applicant was making a request to the Court to reopen her file for the consideration of the new evidence. The position of the CRA on this matter was that new evidence could be submitted before the Court on a judicial review but only in exceptional circumstances.
New evidence may be permitted to assist the Court in understanding the issues, or the procedural defects or breaches of procedural fairness. The jurisprudence surrounding this matter states that no new evidence can be submitted if that evidence has an impact on the merits of the decision that was rendered.
The Court agreed with the CRA that reopening the Applicant's file cannot be done. Ultimately, the Court found that the Applicant's application for judicial review was so improper that there was no chance of success. The Court also did not grant the Applicant the opportunity to amend her Notice of Application and ordered the Applicant to pay $250 in costs to the CRA.
It is common for individuals to represent themselves in Tax Court or judicial reviews related to decisions made by the CRA when it is permitted by the rules of the Court. However, the Court is required to remain impartial, and the self-represented person is still required to follow the same rules and procedures that a lawyer would follow.
This case is an example of how applications for judicial review will fail if certain procedural requirements are not met, especially with pleadings.
David J Rotfleisch, CPA, JD is the founding tax lawyer of Taxpage.com and Rotfleisch & Samulovitch P.C., a Toronto-based boutique tax law corporate law firm and is a Certified Specialist in Taxation Law who has completed the CICA in-depth tax planning course. He appears regularly in print, radio and TV and blogs extensively.
With over 30 years of experience as both a lawyer and chartered professional accountant, he has helped start-up businesses, cryptocurrency traders, resident and non-resident business owners and corporations with their tax planning, with will and estate planning, voluntary disclosures and tax dispute resolution including tax audit representation and tax litigation. Visit www.Taxpage.com and email David at david@taxpage.com.
Read the original article in full on Mondaq. Author photo courtesy Rotfleisch & Samulovitch P.C. Title image: iStock photo ID 928158772.
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