Toronto Dominion Bank v. B.C. (Commissioner of Income Tax), 2017 BCCA 159

The 2012 taxation year of the taxpayer (“TD”) ended on October 31, 2012. Under s. 24(1) of the International Business Activity Act (B.C.), it was required to file its 2012 tax return (in which it claimed a refund based on operating an international financial business in B.C.) “within 18 months after the end of the taxation year or within a later period approved by the commissioner.” S. 25(5) of the Interpretation Act provided that “in the calculation of time…the first day must be excluded and the last day included.”

TD provided its 2012 return to a courier in Toronto on April 30, 2014, and the return was not received by the Commissioner (in Victoria) until the next day, May 1, 2014. Before finding that TD’s return had been filed one day late, Frankel JA noted (at para. 41) the TD submission that:

because when a taxation year ends “at the last instant of the last day of the taxation year”, the first day on which a taxpayer can do anything is November 1^st…[so that] November 1st is the “first day” and, therefore, the day excluded by operation of s. 25(5) of the Interpretation Act

and then stated (at para. 44):

Although a taxation year ends at the last instant of the last day of that year, it nevertheless ends on that day. Consequently, TD was required to file its return within 18 months after October 31, 2012. By operation of s. 25(5) of the Interpretation Act, October 31, 2012, is excluded, [and] the time for filing began to run on November 1, 2012, and expired on April 30, 2014.

The 2012 taxation year of the taxpayer (“TD”) ended on October 31, 2012. Under s. 24(1) of the International Business Activity Act (B.C.), it was required to file its 2012 tax return (in which it claimed a refund based on operating an international financial business in B.C.) “within 18 months after the end of the taxation year or within a later period approved by the commissioner.” TD (which had been struggling with timely filing its also-due federal returns, due to staff shortages) provided its 2012 return to a courier in Toronto on April 30, 2014, and the Commissioner denied the claimed refund on the basis that the return was not received by the Commissioner (in Victoria) until the next day, May 1, 2014 - and also refused an extension of time on the basis (set out in a somewhat related policy statement) that there were no “extraordinary circumstances that [were] beyond the claimant’s control, such as fire, flood, earthquake or a serious illness,” with the Minister of Finance confirming that determination.

Frankel JA found that TD’s return had been filed one day late. In remitting TD’s request for a one-day extension to the Commissioner for reconsideration, and in applying Stemijon, he stated (at paras. 55, 59):

While it was open to the Commissioner to have regard to Ministry of Finance policy statements, she erred in treating them as the only relevant consideration. Apposite is Maple Lodge Farms... .

It is clear … the Commissioner dealt with TD’s request on the basis that her discretion was circumscribed by the extraordinary-circumstances exception. … By doing so, she fettered the broad discretion given to her by s. 24(1) of the IBAA, and her decision is, therefore, unreasonable.

The taxpayer (TD) made an unsuccessful submission that because a taxation year ends on the very last instant of the year, a B.C. provision requiring TD to file a return “within 18 months after the end of [its] taxation year” ending on October 31, 2012 was satisfied by delivering its return on May 1, 2014 rather than the previous day.