Hall v. R. - TCC: No limitation period on excess RRSP contributions where no return filed

Hall v. R. -  TCC:  No limitation period on excess RRSP contributions where no return filed


Hall v. The Queen (October 5, 2016 – 2016 TCC 221, D’Auray J.).

Précis:   The taxpayer had over-contributed to his RRSP in the amount of $12,029 by the end of 2008.  The Minister subsequently assessed the taxpayer tax, interest and penalties for 2008 to 2013 under Part X.1 of the Act in respect of the over-contributions.  At trial CRA waived the penalties.  The taxpayer argued unsuccessfully that the 2008 to 2011 years were statute-barred.  The Court found that the limitation period under Part X.1 of the Act did not run until the taxpayer filed a return in respect of the over-contributions.  The Court advised the taxpayer, who was mentally ill in 2008 when the contributions were made, to apply to the Minister to waive the tax and interest and actually recommended that the Minister do so.  There was no order as to costs since this was an informal procedure appeal.

Decision:   The taxpayer was assessed under part X.1 of the Act with respect to RRSP over-contributions (at trial CRA waived the penalties but the tax and interest were still at issue):

[8]             Due to Mr. Hall’s failure to file a Return, the Minister of National Revenue (the “Minister”) assessed Mr. Hall pursuant to subsection 152(7) for his 2008, 2009, 2010, 2011, 2012 and 2013 taxation years as follows:


Federal Tax

Late-Filing Penalty

Arrears Interest


























The taxpayer’s principal argument was the years prior to 2012 were statute-barred.  The Court rejected this argument on the basis that Part X.1 required the filing of a separate return, which he had not filed:

[22]        Although Gretillat and Cable Mines & Oils Ltd do not deal with Part X.1 of the Act, the same principles outlined in those two cases would apply to this appeal. Since Mr. Hall did not file the required Return for excess RRSP contributions under Part X.1, the initial assessment in relation to this part occurred when the Minister assessed Mr. Hall pursuant to subsection 152(7). As a result, the initial assessment for tax payable under Part X.1 occurred on June 10, 2015.

[23]        Subsection 204.3(2) states that section 152 of the Act applies to Part X.1 of the Act, “with such modifications as the circumstances require”. As a result of subsection 204.3(2), the limitation periods in subsection 152(3.1) apply to Part X.1, with modification. The three year assessment period begins on the sending of a notice of an original assessment.

[24]        In this case, the original assessment occurred on June 10, 2015, when the Minister first assessed Mr. Hall for Part X.1 tax. Therefore, the assessment period would run from June 10, 2015 until June 10, 2018.

On the evidence, the over-contribution arose as a result of severe mental illness and the Court recommended that the taxpayer apply to the Minister to waive the tax and interest:

[32]        During the years in litigation, Mr. Hall was suffering from mental illness. Mr. Hall filed letters with the Court, from different psychiatrists stating that Mr. Hall was experiencing recurring depression throughout the years in issue. Later on, during the period under litigation he was diagnosed with Bipolar and Anxiety Disorder. He stated that he could not explain why he over contributed to his RRSP in 2008 and was not capable of making rational decisions during this time. He further stated that it was a very difficult time for him and his spouse. Due to his illness, he lost his employment in 1999 and he and his spouse almost lost everything during the period under litigation. His excess contribution in 2008 was the product of a reasonable error based on his mental condition at the time.

[33]        In 2008, he had nothing to gain by contributing $7,150 to his RRSP, since during that year he only received income disability insurance of $35,802.48.  Mr. Hall was not working at the time of the hearing and was still receiving disability insurance payments. He is still very fragile. He also stated that he took reasonable steps to eliminate the excess as soon as he was told by the Canada Revenue Agency that he had over contributed to his RRSP.

[34]        During the hearing, I explained to Mr. Hall that this Court does not have the authority to cancel the amount of taxes and interest. The Minister alone has the authority to make such a decision. That said, I advised him to apply for a cancellation of taxes under subsection 204.1(4) of the Act.

[35]        I also advised Mr. Hall that he could also apply to the Minister under subsection 220(3.1) of the Act to request that the Minister waive the interest for the years under litigation.

[36]        Only the Minister has the authority to waive the amount of tax under subsection 204.1(4) of the Act. If the Minister were to refuse to waive the tax, then the appellant could ask the Minister to exercise his discretion under subsection 220(3.1) of the Act and waive the interest.

The Court took the unusual, and under the circumstance highly commendable, step of recommending to the Minister that she exercise her discretion in favour of the taxpayer:

[37]        In light of the facts of this appeal, I recommend that the Minister exercise his discretion for the taxation years in issue.

There was no order as to costs since this was an informal procedure appeal.