Date: 20060307
Dockets: A-246-05
A-247-05
Citation: 2006 FCA 96
CORAM: EVANS J.A.
SHARLOW J.A.
MALONE J.A.
Docket: A-246-05
BETWEEN:
WILLEM VANKERK
Appellant
and
HER MAJESTY THE QUEEN
Respondent
Docket: A-247-05
AND BETWEEN:
ELSBETH VANKERK
Appellant
and
HER MAJESTY THE QUEEN
Respondent
Heard at Toronto, Ontario, on March 7, 2006.
Judgment delivered from the Bench at Toronto, Ontario, on March 7, 2006.
REASONS FOR JUDGMENT OF THE COURT BY: SHARLOW J.A.
Date: 20060307
Dockets: A-246-05
A-247-05
Citation: 2006 FCA 96
CORAM: EVANS J.A.
SHARLOW J.A.
MALONE J.A.
Docket: A-246-05
BETWEEN:
WILLEM VANKERK
Appellant
and
HER MAJESTY THE QUEEN
Respondent
Docket: A-247-05
AND BETWEEN:
ELSBETH VANKERK
Appellant
and
HER MAJESTY THE QUEEN
Respondent
REASONS FOR JUDGMENT OF THE COURT
(Delivered from the Bench at Toronto, Ontario, on March 7, 2006)
SHARLOW J.A.
[1] These are appeals from judgments of the Tax Court of Canada (2005 TCC 292) confirming reassessments of the appellants for the years 1986 through 1995. The reassessments disallowed the deduction of the losses of three partnerships, referred to as Records International 88-6D, Mainstream Productions 89-33 and Mainstream Productions 90-50. Related interest expenses were also disallowed.
[2] It is common ground that the appellants were defrauded, and that none of the putative partnerships carried on any business. There are only trails of fictitious documents created by Mark Allan Eizenga and James Sylvester to make it appear that the partnerships existed and made business expenditures, when in fact they did not. It is argued for the appellants that they honestly believed that they had invested in partnerships that were carrying on business, that they were presented with business plans that appeared to be reasonable, and that they relied reasonably on reputable lawyers, accountants, investment advisers and bankers. It is also argued that the appellants are innocent victims of a scheme that was intended to defraud them as well as the Government of Canada, and that it is not fair that they should bear all the loss.
[3] All of these arguments miss the point. This is not a case in which the deductibility of a loss can be saved by evidence that the appellants acted with due diligence. This is not a case of a business that suffered losses because it was ill conceived or poorly managed, and the tax authorities are second guessing the business acumen of a taxpayer. This is a case where, in fact, there was no business. There were no business expenses. There is no factual foundation for any of the deductions claimed by the appellants. These appeals will be dismissed with costs.
"K. Sharlow"
FEDERAL COURT OF APPEAL
NAME OF COUNSEL AND SOLICITORS OF RECORD
DOCKETS: A-246-05
A-247-05
DOCKET: A-246-05
STYLE OF CAUSE: WILLEM VANKERK
Appellant
and
HER MAJESTY THE QUEEN
Respondent
DOCKET: A-247-05
STYLE OF CAUSE: ELSBETH VANKERK
Appellant
and
HER MAJESTY THE QUEEN
Respondent
DATE OF HEARING: MARCH 7, 2006
PLACE OF HEARING: TORONTO, ONTARIO
REASONS FOR JUDGMENT OF
THE COURT BY: (EVANS, SHARLOW, MALONE JJ.A.)
DELIVERED FROM THE
BENCH BY: SHARLOW J.A.
APPEARANCES:
John W. McDonald FOR APPELLANTS
Harry Erlichman FOR RESPONDENT
Mr. John Pro
SOLICITORS OF RECORD:
McDonald, Ross
Cambridge, Ontario FOR APPELLANTS
John H. Sims, Q.C.
Deputy Attorney General of Canada FOR RESPONDENT
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