http://decision.tcc-cci.gc.ca/tcc-cci/decisions/en/item/142335/index.do
Maxi Maid Services (1998) Ltd. v. M.N.R. (February 5, 2016 – 2016 TCC 30, Boyle J.).
Précis: This decision is an early frontrunner for most ridiculous CRA position of 2016.
Dora Eytcheson is a home cleaner in her seventies. Her husband died in 2002 and she has received a CPP survivor pension since then. For a number of years she worked for Maxi Maid services which withheld CPP from her salary. In 2009 she turned 65 and applied for her own CPP pension. Shortly thereafter she started receiving a higher monthly cheque which she assumed was a combination of her survivor pension and her own pension. In 2011 she noticed that CPP was still being withheld from her salary so she filed two elections in form CPT30 “Election to Stop Contributing to the Canada Pension Plan or the Revocation of a Prior Election” with CRA and gave a copy to Maxi Maid. Maxi Maid stopped withholding but then in 2013 CRA assessed them for failure to withhold CPP:
[15] In December 2013, just over two years after the time the 2011 Election was filed, Maxi Maid was informed by Service Canada or CRA that Mrs. Eytcheson had not met the statutory preconditions to make an election. CRA decided the correct thing it was required to do under the CPP was to reassess Maxi Maid for failure to remit employer contributions, failure to withhold and remit Mrs. Eytcheson’s contributions, and to assess penalties against it for these failures.
It turns out that, unbeknownst to her, Ms. Eytcheson had not in fact been receiving her CPP pension, only a somewhat larger survivor pension. CRA took the position that her 2011 CPR30 elections were therefore invalid. CRA was silent on the communications with her in 2009 and 2011. In fact she didn’t finally begin to get her pension until 2015, some 6 years after she turned 65.
This case dealt solely with whether Maxi Maid was liable for failure to withhold after she provided them with her form CPT30 in 2011. In a decision that finally brought some sanity to the proceedings Justice Boyle allowed Maxi Maid’s appeal and urged CRA to assist in straightening out Ms. Eytcheson’s CPP withholdings on an ongoing basis.
Decision: The decision is careful and well-reasoned and boils down, in my view, to four paragraphs. Dealing with CRA’s affidavit evidence:
[48] Given the complete silence of the Hamelin affidavit on the 2009 exchange and on either of the 2011 CPT30 elections described above, and given that when this was pointed out to counsel for the Respondent he neither offered nor asked for the opportunity to supplement the affidavit evidence, the totality of the evidence leads me to the inference that the 2009 communications and the two 2011 elections did indeed occur as Mrs. Eytcheson testified[3]. It follows that this means that the reason for Mrs. Eytcheson not being in receipt of her CPP retirement pension once she turned 65 was at least as much the Respondent’s fault as hers.
While I do not normally reproduce footnotes, this footnote [3] bears reading:
[3] Trial judges make inferences based on the totality of the evidence that the parties choose to present. Such an inference, which is invariably adverse to one party and supportive of the other, is by definition not a finding at the level of certainty. It is the trial judge’s conclusion as to what he or she believes is most probable — or more likely than not. A finding grounded in inference from the silence in one party’s evidence could, in reality, be totally wrong and one of the other more favourable, charitable, benign possibilities that seemed less probable to the trial judge could in fact be known to be correct and truthful to an omniscient, all-seeing and all‑knowing observer. Trial judges are not given such powers when they are sworn-in, just, at least in my case, copies of the Income Tax Act and the other Bible upon which I swore my oath, a gavel and the ceremonial pen. Trial judges sleep at night based on probabilities, or lie awake at night considering them.
The Court’s conclusion is like a breath of fresh air after threading one’s way through the position advanced by CRA:
[55] It makes no sense to interpret the legislation, including the prescribed form thereunder, in a manner that imposes strict liability on an employer for the correctness, accuracy, honesty or integrity of a completed and signed election form CPT30 received from one of its employees. There is no statutory language requiring corroborating documents to support the election, nor did the election form itself suggest there should be.
…
[58] The Court therefore concludes that upon a proper interpretation and application of section 12, for purposes of determining an employer’s CPP obligations to withhold and remit employee contributions, to make employer contributions, or to be subject to penalties under the above referenced provisions of the CPP, the definition of contributory salary and wages does not include amounts in respect of which a copy of a duly completed CPT30 election form certified, signed and dated has been given to the employer by the employee, and which the employee tells the employer he or she has mailed to CRA.