French Versus English Statutory Interpretation

Hughes v. the Queen – French versus English Statutory Interpretation – Repeated Failure to File Penalties – ITA s. 162(2) – Toronto Tax Lawyer Case Comment

Summary Hughes v. the Queen

In Hughes v. the Queen [2017 TCC 95] the Tax Court of Canada found that a repeated failure to file penalty under s. 162(2) of the Income Tax Act (the "Act") can only apply where four conditions are met. A repeated failure to file penalty is calculated in two parts: 10% of unpaid tax on the filing deadline and 2% of unpaid tax multiplied by the number of months (up to 20) that passed between the filing deadline and the return filing date. Previously, a plain reading of the English provision required that only three conditions be satisfied. A detailed analysis of the English and French versions of s. 162(2) revealed that the two texts were irreconcilable. Justice Jorré applied the appropriate rules of statutory interpretation and determined that the French meaning must prevail.