Date: 20101020
Docket: A-153-09
Citation: 2010 FCA 278
CORAM: NOËL J.A.
SHARLOW J.A.
LAYDEN-STEVENSON J.A.
BETWEEN:
THOMAS
RALPH JARROLD
Appellant
and
HER
MAJESTY THE QUEEN
Respondent
Heard at Vancouver,
British Columbia, on October 20,
2010.
Judgment delivered from the Bench at Vancouver, British Columbia, on October 20, 2010.
REASONS FOR JUDGMENT OF THE COURT BY: SHARLOW
J.A.
Date:
20101020
Docket:
A-153-09
Citation:
2010 FCA 278
CORAM: NOËL
J.A.
SHARLOW
J.A.
LAYDEN-STEVENSON
J.A.
BETWEEN:
THOMAS RALPH
JARROLD
Appellant
and
HER MAJESTY
THE QUEEN
Respondent
REASONS FOR JUDGMENT OF THE
COURT
(Delivered
from the Bench at Vancouver, British Columbia, on October
20, 2010)
SHARLOW J.A.
[1]
Mr.
Jarrold is appealing a judgment of the Tax Court of Canada (2009 TCC 164) dismissing
his appeal from an assessment made in 2006 under section 323 of the Excise
Tax Act, R.S.C. 1985, c. E-15, for goods and services tax (GST) collected
between 1991 and 1993 by T. Jarrold & Associates Ltd. but not remitted. We
have concluded, for the reasons that follow, that this appeal must be dismissed.
[2]
Mr.
Jarrold argues that the Tax Court judge erred in law in his application of the
due diligence defence in subsection 323(3) of the Excise Tax Act when he
dismissed as irrelevant Mr. Jarrold’s attempts to pay the company’s liability
for GST it had collected. He points to two decisions of the Tax Court in which
the due diligence defence was met by actions taken by the corporate director to
pay the liability after initial failure to remit: Franck v. Canada, 2005
TCC 392, and Parfeniuk v. Canada, [1996] G.S.T.C. 22, 4 G.T.C. 3086.
[3]
During
the years in which the liability arose, 1991 to 1993, Mr. Jarrold was dealing
with extremely difficult personal and business circumstances, including a very
high corporate debt load. He says that once he learned that his employees had
failed to file GST returns, he took steps to try to arrange a payment plan for
the unremitted GST, but without success. He argues that, given the
circumstances he faced, he did everything that could possibly have been done.
We note that, while the record discloses that Mr. Jarrold attempted to
negotiate with the Minister to work out a payment schedule for the debt, it
also discloses that he failed to provide the Minister with the information
required to complete those arrangements.
[4]
We
do not read the reasons of the Tax Court judge as concluding that Mr. Jarrold’s
efforts to put a payment plan in place after the initial default by the company
were legally irrelevant. It seems to us that he took those steps into account
but found them to be insufficient given the evidence establishing Mr. Jarrold’s
legal and factual control of the company, which put him in the best possible
position to know of the company’s financial difficulties and therefore its risk
of defaulting in its remittance obligations, his failure to take any steps at
all to prevent the company’s failure to remit, and ultimately his failure to
follow through on finalizing a payment plan. Having carefully reviewed the
submissions of Mr. Jarrold and the record on appeal, we conclude that it was
reasonably open to the Tax Court judge to conclude that the due diligence test
was not met on the facts of this case.
[5]
Mr.
Jarrold also says that he should not be liable for the unremitted GST of the
company because the Minister took too long to assess – over ten years – which
put him at an insurmountable disadvantage. He submits that he cannot reasonably
be expected to contest the assessments after that length of time. There is a statutory
time limit imposed on the Minister for assessing a person under section 323. It
is found in subsection 323(5), and requires the assessment to be made within
two years after the person last ceased to be a director of the corporate tax
debtor. That time limitation never began to run because Mr. Jarrold remained a
director. Mr. Jarrold is essentially asking this Court to devise a further time
limitation based on reasonableness. We cannot accede to that request in the
face of the decision of the Supreme Court of Canada in Canada v. Addison v.
Leyen Ltd., 2007 SCC 33, [2007] 2 S.C.R. 793.
[6]
The
appeal will be dismissed with costs.
“Karen
Sharlow”
FEDERAL COURT OF APPEAL
NAMES OF COUNSEL AND
SOLICITORS OF RECORD
DOCKET: A-153-09
STYLE OF CAUSE: THOMAS
RALPH JARROLD v. HER
MAJESTY THE QUEEN
PLACE OF HEARING: Vancouver, British Columbia
DATE OF HEARING: October 20, 2010
REASONS FOR JUDGMENT NOËL J.A.
OF THE COURT BY: SHARLOW J.A.
LAYDEN-STEVENSON J.A.
DELIVERED FROM THE BENCH BY: SHARLOW J.A.
APPEARANCES:
|
Thomas Ralph Jarrold
|
FOR
THE APPELLANT
(self-represented)
|
|
Shannon Currie
Bruce
Senkpiel
|
FOR
THE RESPONDENT
|
SOLICITORS
OF RECORD:
|
N/A
|
FOR THE APPELLANT
(self-represented)
|
|
Myles J. Kirvan
Deputy
Attorney General of Canada
|
FOR THE RESPONDENT
|
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