Overview of Federal Court’s Ruling in Mattina v. Canada (National Revenue) 2024 FC 1210
By: Amit Ummat and Alisha Butani
In Mattina v. Canada (National Revenue) 2024 FC 1210, the Canadian Federal Court (the “Court”) was tasked with deciding whether the Applicant’s notice of application was “so clearly improper as to be bereft of any possibility of success” (paragraph 10 of Case).
Background
In July 2021, the Minister of National Revenue (the “Minister”) issued Notices of Reassessment to the Applicant for their 2013, 2014 and 2017 tax years and in November 2021, the Minister issued a further Notice of Reassessment to the Applicant for their 2013 tax year (collectively, “Reassessments”). The Applicant objected to the Reassessments and filed Notices of Objection pursuant to section 165 of the Income Tax Act, RSC 1985 c 1 (5th supp.) (the “Act”) in October and December 2021, respectively (“Objections”).
The Canada Revenue Agency (“CRA”) assigned the Objections to a CRA Appeals Officer in November 2022. The Applicant and the CRA Appeals Officer engaged in discussions throughout 2023, with the Applicant stating that in one meeting he was informed that a revised recommendation letter would be forthcoming. However, on October 2023, the Applicant was informed that the CRA Appeals Division had referred the Objections backed to the CRA Audit Division (“Referral”). The Referral was made “due to the substantial amount of information received at the objections state … [and] to the substantial amount of ‘new’ information provided at the objection stage, the fact that the Appeals Division of the CRA does not perform audit work, and that the Referral was ‘mandatory’” (paragraph 7 of Case).
The Applicant took issue with the Referral and filed an application for leave and judicial review seeking various forms of relief, which included but not limited to:
- An order compelling the Minister to reconsider and vacate, vary or confirm the Reassessments with all due dispatch;
- A declaration that the Minister has not authority to not reconsider and vacate, vary or confirm the Reassessments;
- A declaration that the Referral is the product of unfairness and is a nullity; and
- Quashing the Referral.
Analysis and Findings
The Court found it justified to strike the Applicant’s application for judicial review for a few reasons. The first pertains to the nature of the Applicant’s application. The Court found that the real essence of the Applicant’s application is that the Applicant wants the Minister to decide about the Reassessments absent assistance from the CRA Audit Division or any other departments/bodies in the CRA, and without regard for CRA procedures that are designed to assist the Minister in making these decisions. The basis for the Court’s finding here is that the Applicant’s application states that the CRA Appeals Division ought to decide and not the Audit Division and seeks various forms of relief which are vague and unsubstantiated allegations of a breach of procedural fairness.
The second reason is that the Court found that in the case at hand there has been no discretionary decision made by the Minister that is amendable to being judicially reviewed, as per Iris Technologies Inc v Canada, 2024 SCC 24 (“Iris”) and Dow Chemical Canada ULC v Canada, 2024 SCC 23. Furthermore, for purposes of judicial review, the Court did not find that the Referral caused the Applicant’s rights to be affected, legal obligations imposed or a legal consequence to have been enacted. The Court acknowledges however that while policies such as CRA policies can be challenged on judicial review as unlawful or unconstitutional, the Applicant’s notice of application did not contain any such challenge, except mentioning that the CRA failed to adhere to its own policies. For that reason, the Applicant’s application does not contain a cognizable administrative law claim that the Court can hear.
The third reason pertains to the jurisdiction limits of the Court and adequate recourse available to the Applicant, other than judicial review. The Court found that pursuant to section 18.5 of the Federal Courts Act, RSC 1985, c F-7 (the “FCA”), it does not have jurisdiction to deal with the Reassessments with respect to the Applicant’s grounds regarding the Minister’s alleged failure to act with all due dispatch, pursuant to Rafique v Canada (National Revenue), 2024 FCA 37 at paragraph 7 citing Ford v Canada, 2014 FCA 257 at paragraph 19. Additionally, the Applicant’s allegations that there has been a breach of procedural fairness is a “fishing request” (paragraph 40 of Case) and is an “exact form of incidental litigation designed to circumvent the system of tax appeals that the Supreme Court of Canada warned of” in Canada v Addison & Leyen Ltd, 2007 SCC 33. Indeed, the support for the Appellant’s submission that the Referral was a product of procedural unfairness, nullity and a breach of natural justice was mainly vague and unsupported statements. For example, statements such as that the CRA Auditor effectively closed their mind due to the time spent on the file and their responsibilities or general statements referencing bias. The Court furthermore explained that the Applicant had recourse to bring their tax matter to the Tax Court of Canada and chose not to do so.
With respect to the relief sought by the Applicant, the Court found that much of these pertained to declarations that the Court could not grant, because it would fail to provide any practical utility as “issuing a declaration that does not quash or vacate the assessments would service little or no purpose” (Iris at paragraph 58). The Court finds that this alone is sufficient to strike the Applicant’s application.
Based on the foregoing, the Court surmised that there were two of the three obvious, fatal flaws that justified striking an application for judicial review, set out by the Canadian Federal Court of Appeal. Firstly, the relief sought by the Applicant in their application could not be granted, and secondly, an administrative law claim cannot be dealt with by the Court’s jurisdiction under section 18.5 of the FCA.
Key Takeaways from Case
There are two key takeaways from this Case. First, while the threshold to strike a notice of application is high such that a notice must be “very exceptional” as explained in David Bull Laboratories (Canada) Inc v Pharmacia Inc (C.A.), [1995] 1 FC 588, 1994 CanLII 3529 (FCA), the Courts need to continue to strike applications that are meritless such as the one in this Case in order to promote expeditious and summary nature of application for judicial review.
Second, there are jurisdictional limits to the Tax Court of Canada such that it cannot vacate assessments based on the wrongdoing of the Minister nor entertain objections about the underlying process or motivations for the issuing of an assessment. That jurisdiction is with the Court.
