MacKay,
J.:
—This
matter,
heard
June
26,
1989
in
Toronto,
dealt
with
an
application
by
the
original
respondent
in
this
matter,
the
Satellite
corporation,
for
return
of
an
outstanding
motion
dated
December
22,
1988,
made
pursuant
to
subsection
225.2(8)
of
the
Income
Tax
Act,
as
amended,
for
review
and
setting
aside
of
an
order
originally
made
by
this
Court
on
November
28,
1988.
That
order,
granted
on
an
ex
parte
application
by
the
Crown,
authorized
the
Minister
of
National
Revenue
to
take
any
of
the
actions
described
in
paragraphs
225.1(1)(a)
to
(g)
of
the
Income
Tax
Act,
including
authorizing
a
designated
sheriff
to
hold
under
seizure
a
1984
Lake
Renegade
airplane
belonging
to
the
applicant
Satellite.
At
the
time
of
the
hearing
there
was
also
outstanding
in
relation
to
this
matter
a
motion
of
the
original
applicant,
the
Crown,
to
dismiss
the
original
respondent's
motion
of
December
22,
1988.
Background
The
motion
of
December
22,
1988
was
dealt
with
on
January
9,
1989
at
which
time
it
was
adjourned
sine
die
to
permit
cross-examination
on
related
affidavits
filed.
On
March
13,
1989
the
Crown
applied
by
motion
returnable
on
March
20
for
dismissal
of
the
December
22,
1988
motion
and
on
March
15,
1989
the
applicant
filed
an
objection
to
the
Crown's
March
13,
1989
motion.
On
March
20,
1989,
Rouleau,
J.
adjourned,
sine
die,
the
Crown's
March
13
motion
to
dismiss
the
respondent's
December
22,
1988
motion
and,
at
the
same
time,
dismissed
an
application
by
David
Brough,
the
owner
and
principal
officer
of
the
applicant
corporation,
who
is
not
a
lawyer,
to
represent
the
applicant
in
these
proceedings.
On
April
12
by
motion
returnable
on
April
24,
1989,
the
Crown
applied
once
again
to
bring
on
and
to
dismiss
the
adjourned
December
22,
1988
motion
of
the
applicant.
On
April
24
the
matter
was
further
adjourned
to
April
26,
but
was
not
then
dealt
with
again
until
April
27
at
which
time
it
was
set
over
to
May
29,
1989,
but
again,
on
that
date
it
was
adjourned
sine
die,
returnable
on
the
usual
two
days
notice.
Finally,
by
notice
of
June
22
the
applicant
again
sought
to
bring
forward
the
motion
of
December
22,
1988
and
the
matter
was
heard
with
consent
on
June
26,
1989.
The
history
of
procedural
steps
in
this
matter
is
recounted
because
a
number
of
motions
have
been
launched
in
more
than
one
court
file
and
a
number
of
documents
filed,
in
this
and
other
court
record
files,
all
concerned
with
the
same
general
situation.
That
general
situation
arose
when
on
May
10,
1988
this
Court
issued
a
writ
of
fieri
facias
on
the
application
of
Her
Majesty
the
Queen,
made,
ex
parte,
upon
filing
on
the
same
date
of
a
certificate
under
section
223
of
the
Income
Tax
Act.
That
section
of
the
Act
provides
that
a
certificate
when
filed
shall
be
deemed
to
be
a
judgment
of
the
Court
against
the
debtor
for
a
debt
due
to
Her
Majesty.
Under
the
writ
an
aircraft,
alleged
by
the
Crown
to
be
the
property
of
the
applicant
corporation,
Satellite,
was
seized
by
the
Sheriff.
In
other
proceedings
David
Brough
has
sought
to
contest
the
validity
of
the
seizure
and
of
the
writ
of
fieri
facias,
inter
alia,
on
the
ground
that
the
aircraft
is
not
owned
by
the
applicant
corporation
Satellite.
In
the
original
court
file,
no.
ITA-1697-88,
Mr.
Justice
Martin,
on
June
19,1989,
adjourned
sine
die
the
applicant's
motion
to
strike
the
original
writ
of
fieri
facias
pending
the
final
disposition
of
the
motion
of
December
22,
1988,
the
matter
now
under
consideration.
That
course
followed
similar
action
by
Mr.
Justice
Cullen,
in
court
file
no.
T-2392-88,
who
ordered
on
January
9,1989
that
a
motion
by
the
applicant
for
an
order
quashing
the
writ
of
fieri
facias
be
adjourned
pending
disposition
of
the
motion
of
December
22,
1988.
While
contesting
the
validity
of
orders
of
this
Court
the
applicant
corporation
and
its
principal
officer,
David
Brough,
simultaneously
pursued
re-
course
open
to
them
under
the
Income
Tax
Act.
It
appears
that
in
June
1988
application
was
made
to
the
Tax
Court
of
Canada
to
permit
filing
of
a
notice
of
objection
to
the
Minister's
reassessment
of
the
corporation's
tax
liability
for
1984,
1985
and
1986
after
the
normal
time
for
filing
and
thus
to
initiate
the
process
of
appeal
of
that
assessment.
It
is
claimed
that
notice
of
reassessment
was
not
received
prior
to
seizure
of
the
aircraft
now
held
by
the
sheriff.
The
matter
was
heard
by
the
Tax
Court
November
28,
1988,
and
thereafter
it
allowed
the
application
for
late
filing.
On
that
same
day
as
the
Tax
Court
heard
the
application
the
Crown
applied
ex
parte
to
this
Court
and
was
issued
the
so-called
"jeopardy
order"
under
subsection
225.2(2)
of
the
Income
Tax
Act
as
amended,
the
order
which
the
applicant’s
motion
of
December
22,
1988
seeks
to
have
reviewed
and
set
aside.
While
there
are
numerous
initiatives
in
the
name
of
the
corporate
party,
Satellite
Earth
Station
Technology
Inc.
and
of
its
principal
officer,
Brough,
the
only
matter
fully
dealt
with
in
the
hearing
on
June
26,
as
specified
in
the
notice
of
return
of
motion
dated
June
22,
and
the
only
issue
dealt
with
in
these
reasons
is
whether
the
applicant
corporation,
Satellite,
is
entitled
under
subsection
225.2(8)
of
the
Income
Tax
Act
as
amended,
to
have
set
aside
the
earlier
order
of
this
Court
made
November
28,
1988.
Determination
of
this
issue
simultaneously
resolves
the
Crown's
motion
to
dismiss
the
application
of
the
corporation.
The
applicant's
original
motion
of
December
22,
1988
also
sought
additional
relief,
namely,
an
order
releasing
seized
aircraft
N14008;
an
order
to
put
the
aircraft
back
in
airworthy
condition;
an
order
restraining
Revenue
Canada
from
acting
against
the
company
or
its
owner,
and
restitution
for
damages.
It
did
seem
implicit
from
argument
on
behalf
of
the
parties
that
if
the
order
of
November
28
were
set
aside
the
aircraft
held
under
that
authority
would
be
released,
but
neither
this
nor
other
additional
relief
originally
sought
were
argued
and
they
are
not
dealt
with
in
these
reasons.
Relevant
portions
of
the
Income
Tax
Act
Under
the
Income
Tax
Act
as
amended
sections
222
to
228
set
out
a
variety
of
procedures
for
collection
of
moneys
owed
to
Her
Majesty
for
taxes,
interest,
penalties
or
other
charges
under
the
Act.
Among
those
procedures,
section
223,
here
followed
by
the
Crown
in
May
1988,
provides
for
a
certificate
of
an
amount
owing
to
be
registered
with
the
Court
which
registration
effectively
becomes
a
judgment
of
the
Court.
Regular
court
processes,
including
in
this
case
a
writ
of
fieri
facias,
are
then
available
to
recover
the
debt
due
Her
Majesty.
In
1985
the
Act
was
amended
by
a
new
section
225.1
(enacted
S.C.
1985,
c.
45,
s.116(1))
to
introduce
restrictions
on
collection
processes
so
that
in
the
ordinary
course
these
would
be
postponed
during
the
time
limited
by
the
Act
for
filing
a
notice
of
objection
or
for
appealing
in
relation
to
an
assessment
of
tax
made
by
or
on
behalf
of
the
Minister.
Thus,
for
example,
paragraph
225.1(1),
as
now
amended,
provides:
225.1(1)
Collection
restrictions.
—
Where
a
taxpayer
is
liable
for
the
payment
of
an
amount
assessed
under
this
Act
(in
this
subsection
referred
to
as
the
“unpaid
amount"),
other
than
an
amount
payable
under
subsection
227(9),
the
Minister
shall
not,
for
the
purpose
of
collecting
the
unpaid
amount,
(a)
commence
legal
proceedings
in
a
court,
(b)
certify
the
unpaid
amount
under
section
223(1),
(c)
require
a
person
to
make
a
payment
under
subsection
224(1),
(d)
require
an
institution
or
person
to
make
a
payment
under
subsection
224(1.1),
(e)
require
the
retention
of
the
unpaid
amount
by
way
of
deduction
or
set-off
under
section
224.1,
(f)
require
a
person
to
turn
over
moneys
under
subsection
224.3(1),
or
(g)
give
a
notice,
issue
a
certificate
or
make
a
direction
under
subsection
225(1)
before
the
day
that
is
90
days
after
the
day
of
mailing
of
the
notice
of
assessment.
Other
paragraphs
of
section
225.1
deal
with
restrictions
of
collection
processes
during
the
course
of
an
appeal.
In
commenting
upon
section
225.1
Mr.
Justice
Joyal
observed
in
Lafram-
boise
v.
The
Queen,
[1986]
2
C.T.C.
274
at
275,
86
D.T.C.
6396
at
6396,
These
rules
represent
a
considerable
departure
from
a
long-standing
provision
in
the
Income
Tax
Act
and
are
meant
to
dampen
considerably
the
right
of
the
Minister
to
collect
a
tax
until
various
avenues
of
appeal
have
been
exhausted.
At
the
same
time
as
restrictions
were
introduced
on
collection
procedures,
in
1985,
provision
was
made
under
a
new
section
225.2
for
exceptional
action
initiated
by
the
Minister
subject
to
review
by
a
court,
where
it
may
reasonably
be
considered
that
collection
of
an
amount
assessed
would
be
jeopardized
by
delay”.
Section
225.2
as
enacted
by
S.C.
1985,
c.
45,
s.
116(1),
provided,
in
part:
225.2(1)
Notwithstanding
section
225.1,
where
it
may
reasonably
be
considered
that
collection
of
an
amount
assessed
in
respect
of
a
taxpayer
would
be
jeopardized
by
a
delay
in
the
collection
thereof,
and
the
Minister
has,
by
notice
served
personally
or
by
registered
letter
addressed
to
the
taxpayer
at
his
latest
known
address,
so
advised
the
taxpayer
and
directed
the
taxpayer
to
pay
forthwith
the
amount
assessed
or
any
part
thereof,
the
Minister
may
forthwith
take
any
of
the
actions
described
in
paragraphs
225.1(1)(a)
to
(g)
with
respect
to
that
amount
or
that
part
thereof.
(2)
Where
the
Minister
has
under
subsection
(1)
directed
a
taxpayer
to
pay
an
amount
forthwith,
the
taxpayer
may
(a)
upon
3
days
notice
of
motion
to
the
Deputy
Attorney
General
of
Canada,
apply
to
a
judge
of
a
superior
court
having
jurisdiction
in
the
province
in
which
the
taxpayer
resides
or
to
a
judge
of
the
Federal
Court
of
Canada
for
an
order
fixing
a
day
(not
earlier
than
14
days
nor
later
than
28
days
after
the
date
of
the
order)
and
place
for
the
determination
of
the
question
whether
the
direction
was
justified
in
the
circumstances;
(b)
serve
a
copy
of
the
order
on
the
Deputy
Attorney
General
of
Canada
within
6
days
after
the
day
on
which
it
was
made;
and
(c)
if
he
has
proceeded
as
authorized
by
paragraph
(b),
apply
at
the
appointed
time
and
place
for
an
order
determining
the
question.
(5)
On
the
hearing
of
an
application
under
paragraph
(2)(c)
the
burden
of
justifying
the
direction
is
on
the
Minister.
(6)
On
an
application
under
paragraph
(2)(c),
the
judge
shall
determine
the
question
summarily
and
may
confirm,
vacate
or
vary
the
direction
and
make
such
other
order
as
he
considers
appropriate.
(8)
Costs
shall
not
be
awarded
upon
the
disposition
of
an
application
under
subsection
(2).
In
the
circumstances
of
this
case,
it
is
not
clear
whether
the
action
of
the
Minister
in
May
1988,
in
filing
a
certificate
of
the
amount
owing
by
Satellite
and
obtaining
a
writ
of
fieri
facias
under
which
an
aircraft
was
seized,
was
by
virtue
of
this
version
of
section
225.2
which
was
then
in
force.
That
section
would
have
authorized
this
if
authorization
were
deemed
necessary
some
five
months
after
the
company’s
tax
liability
had
been
reassessed,
without
objection
filed.
Subsequently,
by
amendment
effective
upon
Royal
Assent,
September
13,
1988,
S.C.
1988,
c.
55,
s.
170
changed
the
exceptional
process
of
section
225.2
to
require
prior
authorization
by
a
court
of
action
taken
in
circumstances
where
"there
are
reasonable
grounds
to
believe
that
the
collection
of
all
or
any
part
of
an
amount
assessed
in
respect
of
a
taxpayer
would
be
jeopardized
by
a
delay
in
the
collection
thereof".
The
amended
section
225.2,
in
force
at
the
time
of
the
order
made
November
28,
1988,
provides
in
part:
225.2(2)
Notwithstanding
section
225.1,
where,
on
ex
parte
application
by
the
Minister,
a
judge
is
satisfied
that
there
are
reasonable
grounds
to
believe
that
the
collection
of
all
or
any
part
of
an
amount
assessed
in
respect
of
a
taxpayer
would
be
jeopardized
by
a
delay
in
the
collection
thereof,
he
shall,
on
such
terms
as
he
considers
reasonable
in
the
circumstances,
authorize
the
Minister
to
take
forthwith
any
of
the
actions
described
in
paragraphs
225.1
(1)(a)
to
(g)
with
respect
to
the
amount.
(3)
An
authorization
under
subsection
(2)
in
respect
of
an
amount
assessed
in
respect
of
a
taxpayer
may
be
granted
by
a
judge
notwithstanding
that
a
notice
of
assessment
in
respect
of
that
amount
has
not
been
sent
to
the
taxpayer
at
or
before
the
time
the
application
is
made
where
the
judge
is
satisfied
that
the
receipt
of
the
notice
of
assessment
by
the
taxpayer
would
likely
further
jeopardize
the
collection
of
the
amount,
and
for
the
purposes
of
sections
222,
223,
224,
224.1,
224.3
and
225,
the
amount
in
respect
of
which
an
authorization
is
so
granted
shall
be
deemed
to
be
an
amount
payable
under
this
Act.
(4)
Statements
contained
in
an
affidavit
filed
in
the
context
of
an
application
under
this
section
may
be
based
on
belief
with
the
grounds
therefor.
(5)
An
authorization
granted
under
this
section
in
respect
of
a
taxpayer
shall
be
served
by
the
Minister
on
the
taxpayer
within
72
hours
after
it
is
granted,
except
where
the
judge
orders
the
authorization
to
be
served
at
some
other
time
specified
in
the
authorization,
and,
where
a
notice
of
assessment
has
not
been
sent
to
the
taxpayer
at
or
before
the
time
of
the
application,
the
notice
of
assessment
shall
be
served
together
with
the
authorization.
(8)
Where
a
judge
of
a
court
has
granted
an
authorization
under
this
section
in
respect
of
a
taxpayer,
the
taxpayer
may,
upon
6
clear
days
notice
to
the
Deputy
Attorney
General
of
Canada,
apply
to
a
judge
of
the
Court
to
review
the
authorization.
(11)
On
an
application
under
subsection
(8),
the
judge
shall
determine
the
question
summarily
and
may
confirm,
set
aside
or
vary
the
authorization
and
make
such
other
order
as
he
considers
appropriate.
(13)
No
appeal
lies
from
an
order
of
a
judge
made
pursuant
to
subsection
(11).
In
the
case
at
bar
the
order
of
this
Court
made
under
subsection
225.2(2)
on
November
28,
1988,
which
the
application
of
Satellite
seeks
to
have
set
aside,
provided
as
follows:
UPON
MOTION
dated
the
28th
day
of
November,
1988,
on
behalf
of
Her
Majesty
the
Queen
in
Right
of
Canada;
upon
hearing
counsel
on
behalf
of
Her
Majesty
the
Queen
in
Right
of
Canada
as
represented
by
the
Minister
of
National
Revenue,
and
upon
reading
the
affidavits
of
Sherman
Lee,
Nancy
Olexiuk,
George
Rennick,
and
Joe
Giallanardo,
all
sworn
the
25th
day
of
November,
1988;
1.
THIS
COURT
ORDERS
THAT
the
Minister
is
authorized
to
take
forthwith
any
of
the
actions
described
in
paragraphs
225.1(1)(a)
to
(g)
of
the
Income
Tax
Act,
S.C.
with
respect
to
the
Respondent
including
authorizing
the
Sheriff
of
the
County
of
Wellington
to
continue
to
hold
under
seizure
a
1984
Lake
Renegade
airplane
belonging
to
the
Respondent
bearing
registration
#N14008,
serial
#9.
The
tests
to
be
met
On
behalf
of
the
applicant,
Satellite,
counsel
submits
that
cases
decided
in
relation
to
section
225.2
as
it
was
prior
to
amendment
in
1988
are
relevant
at
least
in
so
far
as
the
former
and
the
current
sections
225.2
are
similar.
I
accept
that
submission
but
where
there
are
differences
in
the
legislative
provisions,
the
later
ones
naturally
prevail
and
comments
that
deal
with
matters
inconsistent
with
the
current
legislation
are
not
useful.
Thus,
for
example,
comments
relating
to
the
need
for
the
Minister
to
justify
the
order
if
the
Court
is
called
upon
to
review
the
matter,
made
with
reference
to
the
former
section
225.2
are
not
directly
relevant
to
review
proceedings
under
subsection
225.2(8)
as
enacted
in
1988
for
there
is
no
provision
now
comparable
to
the
previous
subsection
(5)
which
specifically
provided
that
in
a
review
hearing
the
burden
of
justifying
the
direction
was
on
the
Minister.
Moreover,
under
the
current
legislation
any
review
proceedings
initiated
by
the
taxpayer
relate
to
a
previous
order
of
the
Court
authorizing
exceptional
action
by
the
Minister,
and
not
to
a
direction
or
order
by
the
Minister
himself.
Counsel
for
the
Crown
submitted
that
Ontario
cases
concerning
an
analogous
process,
a
motion
to
rescind
or
vary
an
order
granted
on
an
ex
parte
application,
provide
a
helpful
precedent
for
dealing
with
applications
under
subsection
225.2(8).
Cases
cited
included
Waites
et
al.
v.
Alltemp
Products
Co.
et
al.
(1987),
19
C.P.C.
(2d)
185
(Ont.
D.C.),
where
Clarke,
D.C.J.,
stated
(at
page
190):
A
motion
to
rescind
is
not
an
appeal
but
a
substantive
motion.
The
question
is
not
alone
whether
the
order
should
have
been
made
initially
but,
whether
having
been
made,
it
should
be
set
aside.
.
.
.
Comments
to
similar
effect
are
made
in
Re
Avery,
[1952]
O.R.
192;
[1952]
2
D.L.R.
413
(Ont.
C.A.),
and
Cairns
v.
Airth
et
al.
(1893),
XVI
Ont.
P.R.
100
(Q.B.
Div.
Ct.).
I
do
not
accept
the
implication
counsel
suggested
from
these
cases,
that
upon
review
the
Court
must
be
satisfied
that
the
order
originally
made
was
improper
and,
in
addition,
that
the
order
ought
now
to
be
set
aside.
The
cases
cited
do
not
support
that
proposition
and
such
a
process
would
be
unduly
complicated,
in
my
view
involving
aspects
of
an
appeal
and
a
hearing
de
novo.
In
an
application
to
review
a
"jeopardy
order"
originally
granted
under
subsection
225.2(2)
the
issue
will
be
whether
that
order
will
now
be
set
aside
or
varied.
In
this,
an
applicant
under
subsection
225.2(8)
has
the
initial
burden
to
muster
evidence,
whether
by
affidavits,
by
cross-examination
of
affiants
on
behalf
of
the
Crown,
or
both,
that
there
are
reasonable
grounds
to
doubt
that
the
test
required
by
subsection
225.2(2)
has
been
met.
Thus
the
ultimate
burden
on
the
Crown
established
by
subsection
225.2(2)
continues
when
an
order
granted
by
the
Court
is
reviewed
under
subsection
225.2(8).
Occasionally
there
may
be
concern
about
whether
the
order
should
have
been
made
initially,
but
I
expect
that
this
will
not
often
be
the
principal
focus,
unless
there
appears
to
have
been
a
serious
procedural
flaw
in
the
original
application.
This
was
one
ground
for
decision
in
D./M.N.R.
v.
Vanwert
and
Wilma
Atchison,
[1989]
1
C.T.C.
342;
89
D.T.C.
5088
(B.C.S.C.).
That
case
was
also
based
in
part
on
another
ground,
that
the
Minister
did
not
offer
sufficient
evidence
to
satisfy
the
test
warranting
an
order
under
subsection
225.2(2)
of
the
Act.
When
the
evidence
submitted
by
the
taxpayer
applicant
raises
reasonable
doubt
about
the
sufficiency
of
evidence
originally
provided
by
the
Crown
in
an
ex
parte
application,
it
is
implicit
in
the
process
established
by
subsection
225.2(8)
that
the
Court
considering
review
of
the
authorization
once
made
may
consider
evidence
originally
presented
on
behalf
of
the
Minister
in
support
of
the
jeopardy
order
and
any
additional
evidence
by
affidavit
or
from
cross-examination
of
affiants,
presented
by
either
party
in
relation
to
the
motion
for
review.
The
evidence
must
be
considered
in
relation
to
the
test
established
by
subsection
225.2(2)
itself
and
by
relevant
cases,
that
is,
whether
on
a
balance
of
probability
the
evidence
leads
to
the
conclusion
that
it
is
more
likely
than
not
that
collection
would
be
jeopardized
by
delay.
Relevant
cases
Before
turning
to
the
evidence
presented
in
connection
with
this
application,
it
will
be
useful
to
review
cases
dealing
with
section
225.2
or
its
predecessor
that
are
relevant.
I
was
referred
to
only
one
reported
case
dealing
with
section
225.2
as
it
now
is,
D./M.N.R.
v.
Atchison,
supra.
There,
Mr.
Justice
Sheppard
allowed
applications
to
set
aside
ex
parte
orders
previously
made
under
subsection
225.2(2),
in
part
because
on
review
he
concluded
the
Crown
was
not
justified
in
making
the
original
ex
parte
application
as
he
found
it
had
not
made
full
disclosure
with
respect
to
allegations
made
in
support
of
the
application
(i.e.
a
flaw
in
the
original
application),
and
in
part
because
he
was
not
satisfied
that
the
Crown
had
met
the
test
established
by
the
statute
in
subsection
225.2(2).
I
agree
with
Sheppard,
J.
that
this
test
is
the
same
as
that
enunciated
by
Mr.
Justice
McNair
in
Danielson
v.
M.N.R.,
[1986]
2
C.T.C.
380
at
381,
86
D.T.C.
6518
at
6519;
(F.C.T.D.),
with
reference
to
the
earlier
subsection
225.2(1):
.
.
.the
issue
is
not
whether
the
collection
perse
is
in
jeopardy
but
rather
whether
the
actual
jeopardy
arises
from
the
likely
delay
in
the
collection
thereof.
In
introducing
that
test
in
Danielson,
McNair,
J.
also
commented:
In
my
judgment,
the
issue
goes
to
the
matter
of
collection
jeopardy
by
reason
of
the
delay
normally
attributable
to
the
appeal
process.
The
wording
of
subsection
225.1(1)
would
seem
to
indicate
that
it
is
necessary
to
show
that
because
of
the
passage
of
time
involved
in
an
appeal
the
taxpayer
would
become
less
able
to
pay
the
amount
assessed.
In
my
opinion,
the
fact
that
the
taxpayer
was
unable
to
pay
the
amount
assessed
at
the
time
of
the
direction
would
not,
by
itself,
be
conclusive
or
determinative.
Moreover,
the
mere
suspicion
or
concern
that
delay
may
jeopardize
collection
would
not
be
sufficient
per
se.
The
test
of
"whether
it
may
reasonably
be
considered"
is
susceptible
of
being
reasonably
translated
into
the
test
of
whether
the
evidence
on
balance
of
probability
is
sufficient
to
lead
to
the
conclusion
that
it
is
more
likely
than
not
that
collection
would
be
jeopardized
by
delay.
Cogent
evidence
on
the
part
of
the
Minister
as
to
the
dissipation
of
the
taxpayer's
assets
or
the
movement
of
assets
out
of
the
jurisdiction
beyond
the
reach
of
the
Department
of
National
Revenue
and
other
potential
creditors
could
be
very
persuasive
and
compelling.
A
more
difficult
borderline
case
might
be
the
situation
where
the
taxpayer's
assets
are
of
a
wasting
nature,
or
likely
to
decline
in
value
with
the
mere
passage
of
time.
What
of
the
case
where
the
taxpayer
has
little,
if
anything,
in
the
way
of
assets?
Is
the
inability
to
pay
the
amount
assessed
sufficient
justification,
without
more,
to
enable
the
Minister
to
successfully
invoke
subsection
225.2(1)?
I
think
not.
The
decision
in
Danielson
was
followed
by
Rouleau,
J.
in
1853-9049
Québec
Inc.
v.
The
Queen,
[1987]
1
C.T.C.
137;
87
D.T.C.
5093
(F.C.T.D.).
There
the
Court,
reviewing
the
Minister's
directive
under
subsection
225.2(1)
as
it
then
was,
was
not
satisfied
that
there
were
reasonable
grounds
for
believing
the
taxpayer
would
waste,
liquidate
or
otherwise
transfer
its
assets,
or
evade
its
fiscal
obligations,
or
that
on
a
balance
of
probabilities
collection
would
be
jeopardized
by
delay.
Mere
suspicion
of
collection
being
jeopardized
by
delay
was
not
enough.
In
that
case
assets
seized
under
the
Minister's
order
exceeded
the
amount
assessed
for
tax
and,
moreover,
other
substantial
assets
available
to
the
taxpayer
were
not
taken
into
account
by
department
assessors
at
the
time
of
the
order.
In
the
course
of
his
judgment
Rouleau,
J.
said
at
page
145
(D.T.C.
5099):
Finally,
it
was
established
that
the
seizures
in
the
case
at
bar
have
had
the
effect
of
paralyzing
the
applicant's
activities
and,
indirectly,
those
of
some
of
its
subsidiaries.
In
short,
the
question
is
whether
the
respondent's
debt
is
likely
to
be
more
jeopardized
by
the
applicant's
paralysis
than
by
the
passage
of
time
allowed
the
taxpayer
under
subsection
225.1(1).
.
.
.
In
Laframboise
v.
The
Queen,
supra,
the
first
reported
case
to
deal
with
section
225.2
as
it
was
enacted
in
1985,
Joyal,
J.
said,
obiter,
I
would
think
that
is
incumbent
on
the
Minister
in
exercising
his
executory
powers
under
subsection
225.1(1)
to
limit
the
freeze
to
those
assets
which
roughly
equal
the
amount
at
risk.
Again,
the
record
is
silent
on
this
point.
In
such
circumstances,
I
should
very
much
hesitate
at
this
stage
to
vary
the
Minister’s
direction,
leaving
it
to
the
parties
to
make
such
adjustments
as
may
be
necessary
so
that
the
essential
purposes
of
the
jeopardy
provisions
are
maintained
and
that
the
taxpayer,
qua
taxpayer,
be
otherwise
capable
of
managing
his
affairs,
whatever
those
affairs
may
be.
In
Laframboise,
supra
and
in
Berendt
v.
The
Queen,
an
unreported
decision
of
Eberle,
J.
in
the
Supreme
Court
of
Ontario,
both
dealing
with
the
predecessor
of
the
current
section
225.2,
the
Court,
upon
review,
found
that
the
evidence
on
a
balance
of
probabilities
supported
the
likelihood
that
collection
would
be
in
jeopardy
by
reason
of
delay,
and
thus
that
the
jeopardy
order
of
the
Minister
would
not
be
varied.
In
each
of
these
cases
there
appears
to
have
been
some
evidence
of
the
taxpayer's
involvement
in
nefarious
activities
and
also
of
the
likelihood
of
dissipation
of
assets
or
their
likely
movement
from
the
jurisdiction
of
the
Court.
Where
these
factors
were
not
present,
in
Danielson,
supra,
and
in
1853-9049
Quebec
Inc.,
supra,
both
cases
dealing
with
the
predecessor
of
the
current
section
225.2,
and
in
Atchison,
supra,
dealing
with
section
225.2
as
it
now
is,
the
Court
was
satisfied
on
a
balance
of
probabilities
that
the
"jeopardy
order",
made
by
the
Minister
in
the
first
two
cases,
and
issued
by
the
Court
in
Atchison,
should
be
set
aside.
The
Evidence
When
the
order
of
November
28,
1988
was
granted,
as
noted
in
the
order
itself,
affidavits
were
on
file,
all
dated
November
25,
of
Sherman
Lee,
Director
—
Taxation
of
the
Hamilton
District
Office
of
the
Department
of
National
Revenue
—
Taxation,
and
from
the
same
office,
of
Nancy
Olexiuk,
Collections
Officer,
of
George
Rennick,
Collections
Officer
and
of
Joseph
Gial-
lanardo,
Business
Auditor.
Later,
affidavits
sworn
by
Joan
Kathleen
Heal,
Ted
Landowski,
Veroslav
Sjurdjuri,
Mona
Leonard,
Thomas
Wright,
Reg
Phillips
and
Ronald
T.
Grodecki
were
filed
in
December,
1988,
all
supportive
of
some
part
of
the
information
provided
on
the
basis
of
advice
and
belief
in
the
affidavit
of
Nancy
Olexiuk
dated
November
25,
1988.
In
addition
to
these
documents
filed
by
the
Crown
there
was
one
further
affidavit
filed
on
the
day
of
hearing
of
this
matter,
sworn
by
Yin
S.
Jang.
In
connection
with
the
application
for
review
on
behalf
of
the
corporation
Satellite,
reliance
was
placed
on
affidavits
of
David
Brough,
dated
December
23,
1988
and
May
26,
1989,
of
Joni
Manchee
dated
December
23,
1988,
of
Alex
Reinfels
dated
December
21,
1988
and
of
Lynn
Callighen
dated
December
23,
1988.
Reference
was
also
made
to
the
affidavit
of
Thomas
Wright,
dated
December
15,
originally
filed
by
the
Crown.
Other
affidavits
of
David
Brough,
undated
but
sworn
March
17,
and
dated
March
29,
April
11
and
18,
June
7
and
13,
all
in
the
year
1989,
were
filed
and
reviewed,
though
in
regard
to
the
main
issue
in
this
application
they
have
little
relevance.
The
final
aspect
of
evidence
relied
on
by
counsel
for
the
Crown
at
the
hearing
of
this
matter
was
the
transcripts
of
cross-examination,
relating
to
matters
raised
on
behalf
of
the
applicant
Satellite,
by
the
affiants
Brough,
Manchee
and
Callighen.
A
review
of
the
affidavits
filed
in
support
of
the
applicant
Satellite
and
of
the
transcripts
of
cross-examination
of
affiants
Brough
and
Manchee,
the
two
principals
responsible
for
operations
of
Satellite,
leads
me
to
two
general
conclusions.
Satellite
was
a
small,
fledgling
enterprise
dependant
significantly
upon
Brough
and
to
a
lesser
extent
Manchee,
and
at
least
in
1986
it
was
not
operated
on
a
very
business-like
basis
in
terms
of
records
and
the
meeting
of
formal
requirements.
In
these
respects
it
may
not
be
unique
among
small
struggling
enterprises.
The
second
general
conclusion
is
that,
despite
the
less
than
tidy
operations
of
the
company,
a
number
of
the
concerns
raised
by
the
taxation
officers
as
the
basis
for
the
conclusion
by
Lee,
the
officer
responsible,
that
delay
would
jeopardize
collection
are
answered
in
a
reasonable
way
by
evidence
offered
in
relation
to
the
company's
application
for
review.
That
conclusion
led
in
May
1988
to
action
by
the
Minister
in
accord
with
section
223
of
the
Income
Tax
Act,
to
the
filing
of
the
certificate
and
then
to
the
issue
of
the
writ
of
fieri
facias.
It
was
also
the
basis
of
the
application
on
behalf
of
the
Crown,
made
ex
parte
on
November
28,
1988
for
authorization
by
order
of
this
Court
in
accord
with
section
225.2,
as
amended
with
effect
from
September
1988.
The
second
general
conclusion
from
the
applicant's
evidence,
that
is,
that
a
number
of
the
concerns
of
the
Department's
officers
can
be
reasonably
answered,
leads
to
a
reasonable
doubt
about
the
likelihood
of
jeopardy,
as
a
result
of
delay,
in
the
collection
process.
This
requires
an
assessment
of
whether
all
the
evidence
available
at
the
date
of
hearing,
June
26,
1989,
on
balance
of
probability
leads
to
a
conclusion
that
it
is
more
likely
than
not
that
collection
of
part
or
all
of
the
debt
due
Her
Majesty
would
be
jeopardized
by
delay.
That
is
the
standard
required
by
subsection
225.2(2)
to
support
an
order
from
the
Court
authorizing
collection
action
by
the
Minister,
and
that
is
the
standard
to
be
met
upon
review
if
the
authorization
once
granted
is
to
be
sustained.
The
applicant,
Satellite,
is
a
corporation
organized
under
the
laws
of
Ontario
in
1981.
Apparently
it
was
principally
engaged
in
the
manufacture,
sale
and
servicing
of
Satellite
dishes
or
instruments
for
reception
of
television
or
electronic
signals,
but
its
objects
were
not
limited
to
these
activities.
By
1986
the
corporation
had
encountered
financial
difficulties.
Its
place
of
business
had
been
moved
a
number
of
times,
the
scale
of
its
activities
had
been
reduced,
the
relationship
between
the
two
principal
players
in
the
company
was
undergoing
change,
and
some
consideration
was
being
given
to
alternative
activities
within
the
company's
objects.
Any
shares
of
the
corporation
were
held
by
David
Brough
and
Joni
Manchee,
though
they
appear
not
to
have
invested,
or
at
least
not
to
have
kept
track
of
any
investment,
financially
in
the
company.
They
managed
its
operations
on
the
basis
of
sales
and
by
withdrawing
little
in
wages
or
dividends.
Initially
both
were
officers
of
the
company;
for
a
time
following
a
personal
bankruptcy
in
1985
Brough
resigned
as
an
officer.
After
resolution
of
relations
between
the
two
of
them
and
of
Manchee's
withdrawal
from
the
company,
from
late
1986
or
early
1987
Brough
was
the
sole
officer
and
president
of
the
company.
By
agreement
between
the
two
principals
in
October
1986
Brough
was
considered
to
have
purchased
the
assets
of
the
company,
though
apparently
no
corporate
documents
were
executed
as
evidence
of
the
intended
transaction.
By
further
agreements
in
1987
certain
continuing
responsibilities
were
outlined
between
the
corporation
and
Manchee,
and
between
the
corporation
and
Brough.
By
an
agreement
made
in
January
1988,
Brough
agreed
to
purchase
the
shares
in
the
company
which
they
deemed
were
held
by
Manchee
who
until
then
had
been
perceived
as
the
major
shareholder
in
the
company.
In
March
1988,
a
vehicle
originally
registered
in
the
name
of
the
company
and
apparently
purchased
by
it
was
transferred
to
Manchee.
All
of
the
agreements
referred
to
were
between
Brough
and
Manchee,
without
execution
of
any
documents
on
behalf
of
the
corporation.
In
the
summer
of
1986
the
Department
of
National
Revenue,
Taxation,
initiated
an
audit
of
the
company's
operations
and
its
tax
liability.
This
led
to
correspondence,
initiated
by
the
department
in
November
1986,
concerning
operating
expenses
and
research
expenditures
claimed
on
behalf
of
the
company
in
the
years
1984
and
1985.
Brough
replied
to
these
letters
on
behalf
of
the
corporation
in
December
1986,
and
the
accountant
retained
by
the
company
in
previous
years
wrote
to
the
department
in
February
1987.
These
replies
were
apparently
not
satisfactory
explanations
for
the
department
which
wrote
again
to
the
company
for
the
attention
of
Brough
in
mid-April
1987.
Brough
replied
two
weeks
later
disputing
some
of
the
positions
of
the
department
auditor,
indicating
he
would
be
writing
to
the
Minister
to
complain
of
the
department's
methods
and
offering
to
meet
department
representatives
to
resolve
concerns
about
research
expenditures.
Apparently
there
were
discussions
between
tax
auditors
and
the
company’s
accountant
early
in
1987.
In
the
spring
of
1987
the
company
left
premises
in
Milton,
Ontario
where
it
had
previously
based
its
satellite
dish
operations,
and
withdrew
to
an
address
in
Hillsburgh,
Ontario
where
Manchee
and
Brough
had
lived
and
where
they
considered
some
of
their
business
activities
had
been
based.
Later,
there
were
to
be
different
perceptions
between
the
department's
officers
and
Brough
about
the
circumstances
of
the
company’s
occupations
of
these
properties.
While
normal
advice
for
change
of
address
to
postal
authorities
for
purposes
of
forwarding
mail
for
four
months,
and
to
creditors
and
debtors
of
the
company,
is
claimed
to
have
been
provided,
no
special
advice
was
provided
to
the
department
and
there
was,
after
the
spring
of
1987
obvious
uncertainty
on
the
part
of
the
department
about
the
business
address
of
the
company.
Brough
who
had
apparently
written
to
the
Minister
in
the
spring
of
1987
from
the
Milton
address
of
the
company
did
not
receive
a
reply
although
one
was
apparently
sent
in
August.
The
Department
of
National
Revenue,
Customs
and
Excise
branch,
wrote
to
the
company
at
the
Hillsburgh
address
in
July
1987,
so
that
at
least
another
branch
of
the
same
department
was
cognizant
of
the
company’s
address
then.
The
company
address
had
been
provided
to
the
telephone
company.
Taxation
officers
had
telephoned
Brough
about
company
tax
matters,
at
least
once
in
April
1988,
at
the
Hillsburgh
address.
There
is
evidence
the
department's
taxation
officers
were
not
completely
ignorant
of
the
Hillsburgh
address
since
part
of
the
company’s
expenses
in
dispute
for
1986
related
to
operations
at
that
address.
Whether
or
not
uncertainty
about
the
company's
address
was
warranted,
the
department
did
issue,
in
December
1987,
addressed
to
the
former
address
of
the
company,
in
Milton,
notice
of
reassessment
of
tax
liability
of
the
company
for
the
years
1984,
1985
and
1986,
claiming
at
that
time
a
total
in
tax
and
interest
arrears
of
more
than
$104,000.
This
notice
and
two
subsequent
collection
letters
in
January
and
February
1988
demanding
payment,
all
apparently
addressed
to
the
company’s
former
Milton
address,
were
not
received
by
the
company
or
by
Brough,
though
the
letters
were
not
returned
to
the
department
through
the
postal
service.
In
April
1988
one
of
the
department's
officers
telephoned
the
company
at
its
Hillsburgh
address.
There
is
conflicting
evidence
about
the
conversation
but
agreement
that
on
that
occasion
Brough
did
say
that
the
company
had
done
virtually
no
business
for
a
year
or
more,
and
that
its
assets
had
been
dispersed,
without
reference
to
where
the
assets
had
gone,
i.e.
largely
to
him.
There
is
dispute
as
to
whether
anything
was
then
said
about
taxes
owed
or
about
payment
of
taxes
by
the
company.
On
May
10,
as
noted
earlier,
the
department
initiated
legal
action
filing
a
certificate
under
section
223,
indicating
taxes
and
arrears
of
interest
in
excess
of
$108,000
then
owed,
and
obtaining
a
writ
of
fieri
facias.
What
factors
are
said
to
indicate
risk
that
delay
in
collection
processes
would
jeopardize
ultimate
collection
of
the
whole
or
part
of
the
debt
claimed?
As
outlined
in
the
affidavit
of
Sherman
Lee
and
as
amplified
by
submissions
of
counsel
at
the
review
hearing
these
can
be
summarized,
with
the
explanations
offered
on
behalf
of
the
applicant
Satellite,
under
four
main
headings.
First,
concern
was
expressed
about
the
instability
of
the
business
location
of
the
company.
It
had
operated
from
several
locations
since
its
incorporation
in
1981,
and
officers
of
the
department
believed
on
information
provided
by
third
parties
that
the
company
had
been
locked
out
of
its
leased
premises
in
Milton
with
rental
payments
in
arrears,
and
that
the
landlord
of
the
Hillsburgh
property
had
commenced
action
to
evict
Brough
and
thus
the
company,
because
of
lease
infractions.
The
evidence
of
Brough
and
Man-
chee
is
that
while
the
company
may
have
been
locked
out
by
the
landlord
of
the
Milton
property,
that
was
done
at
the
end
of
the
term
of
the
lease
which
the
landlord
had
earlier
tried
to
have
renewed.
The
evidence
of
Brough
and
Callighen
was
that
any
difficulties
with
the
landlord
of
the
Hillsburgh
property
arose
over
differences
about
landlord
and
tenant's
obligations
but
in
any
event
these
had
been
resolved.
Whatever
the
company's
difficulties
with
its
several
landlords
were,
and
implicitly
whatever
may
have
been
the
cause
of
departmental
uncertainty
about
the
company's
address,
these
factors
do
not
in
themselves
lead
to
any
basis
for
concluding
that
delay
would
jeopardize
collection.
Second,
reluctance
on
the
part
of
Brough
to
file
tax
returns
for
1987
and
to
provide
documentation
was
set
out
by
Sherman
Lee
as
a
basis
for
concluding
there
was
risk
warranting
special
action.
The
company's
tax
return
for
1987
was
due
not
later
than
November
of
that
year.
When
it
was
not
filed
Brough
had
been
requested
by
letters
twice
in
June
of
1988
to
file
the
return,
he
was
personally
served
in
August
with
a
notice
to
do
so
and
in
October
was
urged
again
to
do
so
since
the
department
was
in
a
position
to
prosecute
him
for
continuing
failure.
At
the
time
of
his
affidavit
of
November
25,
1988,
Lee
indicates
that
the
return
for
1987
was
still
outstanding,
Brough’s
affidavit
swears
that
it
was
filed
before
November
25,
1988.
On
the
other
aspect
of
reluctance
to
provide
information
requested,
Lee's
affidavit
points
to
the
requests
in
November
1986
and
April
1987
for
information
about
expenditures
for
research
and
development.
Yet
it
was
the
failure
to
provide
such
information
that
led
in
part
to
the
reassessment
of
tax
liability
of
the
company,
so
that
it
is
not
as
if
the
requests
for
information
created
any
special
barrier
to
departmental
actions.
In
my
view,
the
reluctance
referred
to
in
relation
to
information
about
research
expenditures
and
in
relation
to
the
1987
return,
have
no
significance
in
considering
the
risk
from
delay
in
collection
of
arrears
of
taxes
and
interest
claimed
for
the
years
1984
to
1986.
The
third
general
factor
relied
on
by
officers
of
the
department
was
the
change
in
assets
of
the
corporation.
In
financial
statements
filed
with
the
company's
1986
tax
return,
assets
of
the
company
included
an
Ultimate
100
aircraft,
a
Lake
Renegade
aircraft
and
a
1986
Nissan
van
all
purchased
from
company
funds.
Yet
subsequently
the
Ultimate
aircraft
was
registered
in
the
name
of
Brough,
the
Lake
Renegade
aircraft
was
said
to
have
been
purchased
by
Brough
and
registered
in
the
United
States
in
the
name
of
Brough's
mother
who
is
resident
in
the
United
States,
and
the
Nissan
van
was
transferred
to
Manchee's
name
in
March
1988,
apparently
as
part
of
the
settlement
arrangements
of
personal
relations
and
corporate
involvement
of
Manchee.
In
addition
the
department
pointed
to
a
company
bank
account
closed
out,
with
the
balance
in
the
account
apparently
distributed
in
the
spring
of
1987,
largely
between
Manchee
and
Brough.
The
evidence
of
the
two
principals
is
that
the
account
in
question
was
closed
when
the
company
ceased
operations
in
Milton
and
another
account,
nearer
Hillsburgh,
was
opened.
In
November
1988
the
officers
of
the
department
apparently
believed
that
the
only
asset
of
value
of
the
company
was
the
Lake
Renegade
aircraft
which
had
originally
been
ordered
seized
under
the
writ
of
fieri
facias
in
May.
As
noted
earlier,
another
action
contests
the
validity
of
the
department's
action,
in
part
on
the
ground
that
at
the
time
that
aircraft
was
not
owned
by
the
company.
The
fourth
general
factor,
implicitly
underlying
the
department's
action
and
developed
in
submissions
of
counsel
at
the
hearing
of
this
matter,
was
the
instability
of
the
company's
operations
from
1986
and
particularly
in
1988.
By
the
latter
year
the
company's
operations
had
virtually
ceased,
and
its
cash
receipts
in
the
previous
year
were
only
about
$15,000
as
estimated
by
Brough.
He
professes
that
consideration
was
being
given
to
other
activities
to
be
undertaken
within
the
company’s
objects,
in
particular
the
production
of
documentary
films
for
which
use
of
the
aircraft
now
held
by
the
sheriff
was
crucial,
and
he
points
as
well
to
grants
available
to
the
company
to
promote
sales
abroad,
grants
apparently
available
only
to
meet
travel
expenses
if
a
representative
of
the
company
could
travel
within
the
terms
of
these
grants.
Despite
continuing
difficulties
for
the
company,
the
department
was
able
by
the
affidavit
of
Jang,
to
point
to
those
difficulties
being
ignored
or
even
misrepresented
by
Brough
in
applications
for
these
grants.
Efforts
by
Brough
were
unsuccessful
in
obtaining
a
letter
of
guarantee
from
a
bank
to
meet
the
claims
of
the
department
if
those
were
upheld
following
his
appeal
on
behalf
of
the
company
because
the
company
had
been
virtually
out
of
business
for
two
years.
Finally,
as
part
of
the
instability
in
the
company's
operations
by
1988,
the
department
appears
to
have
been
concerned
about
changes
in
responsibilities
for
the
operations
of
the
company,
with
the
departure
of
Manchee,
with
whom
tax
officers
had
originally
dealt,
and
the
assumption
of
full
responsibilities
by
Brough.
Department
officers
only
learned
of
these
changes
commencing
in
April
of
1988.
At
the
same
time
they
learned
that
Brough
had
acquired
in
1986
a
so-called
"green
card”
to
permit
him
to
work
in
the
United
States,
and
that
he
claimed
some
involvement
in
corporate
activities
in
that
country.
In
response,
Brough's
evidence
is
that
the
"green
card"
issued
in
1986
merely
replaced
a
card
he
had
earlier
held
and
had
lost
and
that
he
had
for
some
years
done
some
work,
claiming
work
for
the
applicant
company,
in
the
United
States.
In
my
view,
whatever
may
have
been
the
change
in
responsibilities
for
the
company's
operations,
these
were
still
principally
influenced
by
Brough
as
they
had
been
since
the
company's
inception
and
there
was
no
evidence
that
Brough
intended
to
leave
Canada
to
avoid
company
liabilities
or
to
evade
collection
of
taxes
if
his
appeal
is
unsuccessful
about
the
tax
claims
of
the
department.
When
one
considers
all
these
factors
it
seems
to
me
that
only
two
in
combination
could
possibly
warrant
the
conclusion
that
collection
of
the
debt
claimed
by
Her
Majesty
would
be
jeopardized
by
delay
in
collection
processes.
Those
are
that
the
one
asset
deemed
by
the
department
to
be
owned
by
the
company
which
was
of
sufficient
value
to
meet
the
debt,
the
Lake
Renegade
aircraft,
might,
in
the
circumstances
of
continuing
instability
of
the
company's
operations,
be
wasted
or
transferred.
It
is
an
irony
that
Brough
contends
that
the
aircraft
is
deteriorating
because
of
improper
maintenance
since
it
has
been
held
by
the
sheriff's
office.
The
instability
of
the
company
was
not
a
new
development
in
1988,
and
in
itself
it
would
not
warrant
a
conclusion
of
risk
if
collection
be
delayed.
Nor
would
the
fact
that
the
company's
assets
are
changed
or
reduced,
in
itself
warrant
such
a
conclusion
unless
there
is
a
reasonable
basis
on
the
evidence
to
conclude
that
transfer
of
assets,
which
are
not
naturally
wasting,
has
been
or
will
be
effected
to
avoid
the
claims
of
creditors
including
Her
Majesty,
or
that
the
assets
are
likely
to
be
moved
out
of
the
jurisdiction
and
beyond
the
reach
of
the
department.
In
this
case
considerable
mistrust
appears
to
have
developed
between
department
officers
and
Brough.
Brough
may
well
have
appeared
less
than
open
and
truthful
in
his
dealings
with
representatives
of
the
department
and
he
may
well
have
perceived
the
officers
as
less
than
fair
and
cooperative.
From
the
perspective
of
each
their
mistrust
may
appear
warranted,
but
it
is
unfortunate.
It
appears
to
have
generated
suspicion
on
the
part
of
the
taxation
officers
that
Brough
was
simply
seeking
to
evade
payment
of
taxes
deemed
due
from
the
company.
That
suspicion
might
have
been
inferred
from
the
facts
that
those
responsible
for
the
company
were
aware
of
the
audit
and
subsequent
correspondence
about
liability
of
the
company
for
past
taxes
and
that
assets
of
the
company,
which
was
already
in
some
financial
difficulty,
were
distributed
between
the
principals
in
less
than
orthodox
fashion.
But
there
is
not
evidence,
in
my
view,
that
would
warrant
this
suspicion
as
a
reasonable
conclusion
and
suspicion
in
itself
is
not
a
reasonable
basis
for
authorization
to
avoid
delay
in
collection
which
section
225.1
of
the
Act
specifies
as
the
normal
case.
It
is
my
assessment
that
the
evidence
in
this
case
does
not
lead
to
a
conclusion
on
the
balance
of
probability,
that
it
is
more
likely
than
not
that
collection
of
all
or
part
of
the
debt
due
Her
Majesty
would
be
jeopardized
by
delay
in
the
collection
process.
In
the
circumstances
the
application
of
the
corporation
Satellite
is
allowed
and
the
order
made
November
28,
1988
is
set
aside
pursuant
to
subsection
225.2(8)
of
the
Income
Tax
Act.
At
the
same
time,
the
complementary
motion
of
the
Crown
that
the
application
of
the
corporation
be
dismissed
is
itself
dismissed.
Costs
are
awarded
to
the
applicant
Satellite.
Application
allowed.
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