http://decision.tcc-cci.gc.ca/tcc-cci/decisions/en/item/70965/index.do 
Izumi v. The Queen (April 3, 2014 – 2014 TCC 108) was somewhat of an unfortunate comedy of errors involving confusion over the taxpayer’s change of address. The taxpayer had appealed his 1994 and 1995 taxation years. After the commencement of the appeal he moved. He notified CRA of his new address but did not notify the Tax Court. His lawyer withdrew from the record listing the former address of the taxpayer. The Tax Court sent a notice of status hearing to the old address of the taxpayer. When he did not show up the court issued a judgment dismissing his appeal (April 10, 2012). The taxpayer did not become aware of this judgment until September of 2012 when counsel for the Crown sent him a bill of costs at his new address. The taxpayer contacted his accountants, then retained a new set of lawyers and an application to set aside the judgment was commenced on November 1, 2013.
The court reviewed the jurisprudence applicable to setting aside judgments and concluded that, under all the circumstances, it was appropriate to do so in this case:
[14] The facts to be considered in a motion of this nature must show a continuing intention by an Appellant to pursue an appeal. The Appellant claims that he believed that his appeal was being held in abeyance pending the outcome of related tax cases. This appears to be a reasonable belief given the slow moving nature of this appeal – the tax years under appeal date back to 1994 and 1995. Although the Appellant did not take an action to pursue his appeal after his former counsel ceased to act for him, the fact that he believed his appeal was being held in abeyance and the mistaken belief that he had provided notice of his new address to the Court lends support to his position that he had a continuing intention to pursue this appeal.
[15] Another factor to be considered is whether or not the appeal has merit which discloses an arguable appeal. While the Notice of Appeal must disclose a justiciable issue, the threshold is low and there is no need for the Appellant or any litigant to testify or call evidence to demonstrate a prima facie case. The Appellant submits that the Notice of Appeal discloses an arguable appeal concerning the deduction of business losses of a partnership, as well as certain carrying costs claimed by the Appellant in his 1994 and 1995 taxation years. The Respondent, in his submissions on the motion, did not take issue with respect to the merit of the taxpayer’s appeal. Given the low threshold, there does not appear to be any reason to question the Appellant’s contention that the appeal has merit and that the Notice of Appeal raised a justiciable issue.
[16] Is there prejudice to the Respondent arising from the delay? In
GMC, Justice Woods noted that like with other procedural matters, the Court should not apply a set of factors in a rigid manner to determine whether or not to set aside a judgment, but rather, adopt a contextual approach in light of the particular facts of the case. Justice Woods described the “overriding consideration” should be the relative effect on the persons that will be affected by the decision. In this particular case, a consideration of the relative prejudice to the parties favours allowing the motion. There is no apparent prejudice to the Respondent. The Respondent has not argued that it will suffer prejudice if the motion is allowed. Conversely, great prejudice will be occasioned on the Appellant if the motion is dismissed as $153,421 in deductions are at stake. The Respondent only refers to authorities of the Ontario Court of Appeal in
11961658 Ontario Inc. v. 6274013 Canada Limited, 2012 ONCA 544, for the proposition that a case can be dismissed for delay without proof of actual prejudice. This case contains an interesting discussion with respect to prejudice, but it deals with the issue of actual prejudice. In this particular case, there is no evidence of actual or apparent prejudice to the Respondent.
[17] Finally, one factor that must be considered is whether a reasonable explanation is given for the delay. The Appellant had explained why he failed to attend the status hearing and the delay between the pronouncement of the Judgment and the date the Appellant became aware of the Judgment, but there was no explanation of the delay between becoming aware of the Judgment against him and filing the motion. It is noted that the Appellant sought advice from his accountant with respect to the issues of the 1994 and 1995 reassessments and his accountants then referred him to the firm of Miller Thomson on the tax issues. The Court is not aware of the timing of the retention of Miller Thomson and the time line from their retention to the motion being filed.
[18] On the facts of the case, the delay is of significance but the issue of prejudice in this case should be given significantly more weight. The Appellant had done everything expected of him in relation to keeping the Court advised with respect to his address, and was not intentionally avoiding any notice of matters with respect to his tax appeal. The Appellant when he noticed that he had received correspondence from the Respondent with respect to his bill of costs acted quickly and paid the bill of costs forthwith. The prejudice to the Appellant if the appeal does not proceed is significant.
[19] Considering all of the factors aforesaid, and the case law referred to, I am satisfied that the Appellant took the appropriate steps in the process, although he could have done it in a little more timely fashion. His conduct was certainly not egregious behaviour and I believe to deprive him of the ability to have his case decided on the merits would most certainly be unduly harsh. I believe the circumstances are such that the default judgment should be set aside and the period of time within which the Appellant may bring his motion to set aside the Judgment be extended to the date on which the motion was filed with the Tax Court of Canada.
[20] The motion is granted and there will be no order as to costs.