REASONS FOR JUDGMENT
(Appeal
heard and decision rendered orally from the Bench
on March 17, 2015 at Vancouver, British Columbia.)
Boyle J.
[1]
The history of this appeal by Mr. Davis of his
2007 through 2010 taxation years arose out of an audit by the CRA of a
corporation wholly-owned by him. In doing that audit, the CRA auditor sought to
verify that the amounts taken out of the corporate account by cheques or
otherwise to Mr. Davis were reported by Mr. Davis as income. Mr. Davis had
reported some income as employment income, supported by a T-4 issued by that
company. I understand other amounts were reported by the corporation and Mr.
Davis as subcontract payments to him.
[2]
CRA treated the difference between what was
reported by Mr. Davis and what was paid to him by the company as income for
each of the years 2007 through 2010.
[3]
The amounts are not in dispute. The taxpayer and
his representative, Mr. Lukiv, have acknowledged that if their legal positions
relating to the Canadian Constitution, Charter and international
human rights treaties do not succeed, the amounts reassessed are not disputed
and are payable.
[4]
The taxpayer and his representative have also, I
believe, acknowledged that, in the circumstances, the penalties would be
properly payable as assessed. However, in any event, I am also satisfied from
the government’s evidence, both the testimony of the auditor and his consistent
supporting contemporaneous audit documents and from the assumptions made by the
Minister in assessing the penalties which were disclosed and reasonable and
unchallenged, and from the fact that the taxpayer’s positions were, if not
inconsistent, certainly fluctuating over the years as to the basis of why he
disputed his taxes, that, even had the taxpayer not agreed, the onus on the
Crown to discharge that the penalties are properly payable was satisfied.
[5]
There were arguments today and in the written
materials that went well beyond what was in the notice of appeal, relating to
persons, corporations, human beings, living souls, certificates of live birth
and punctuation appearing in people’s names. It was conceded by Mr. Davis and
his representative that they were not advancing the “natural persons” type
arguments usually associated with those references. This was wise, given that
the Federal Court of Appeal has most recently, in the Ian Brown case,
rejected and upheld this court in rejecting “natural persons” type arguments.
[6]
The written argument handed in today included
several pages on the Judges Act. There was some discussion and
submissions by Mr. Davis’ representative that, in the circumstances, it was
their opinion that neither this court nor the judges of this court, nor any
court nor any judges in Canada, could be considered to satisfy Canadians’
rights to have things heard by an independent person and an independent court. Mr.
Lukiv acknowledged that he had trouble framing any relief request, given that,
had I agreed with him, my opinion became worthless. So he left that dangling. I
could not do anything with it in any event. So, that was dealt with
satisfactorily to Mr. Lukiv.
[7]
There were also references to being presumed
innocent until proven guilty in the written arguments. On questioning, Mr.
Lukiv acknowledged that Mr. Davis had not been charged with an offence, and we
had previously discussed what the onus was in the Tax Court as compared with a
criminal court. It is not beyond a reasonable doubt; rather, it is the balance
of probabilities, 50 percent plus 1, that we talked about this morning.
[8]
So, the only substantive issue, while
multi-pronged, is what I will refer to as the
Constitutional/Charter/international treaties, all as they concern the human
rights arguments that Mr. Lukiv and Mr. Davis wanted to advance. I certainly
agree with them and do not deny that all such rights exist as phrased in our
Charter and in our Constitution. The problem that Mr. Davis and Mr. Lukiv face
is that the courts have been clear that those rights do not extend to not paying
tax, nor do they include expressly or otherwise a right to not pay tax. The
courts have been clear and consistent. I really need not spill any more ink on
this point.
[9]
For these reasons, I will be dismissing the
appeal. Under the Rules of the Court, in an informal case, I am able to
award costs payable against an unsuccessful taxpayer if the appellant has
unduly delayed the prompt and effective resolution of the appeal. In addition
to my view that continuing to pursue these arguments, many, many Canadians are
abusing the process of the Court, I am also satisfied that today Mr. Davis,
simply by bringing these arguments forward once again with no prospect for
success, unduly delayed the prompt and effective resolution of his appeal. Therefore,
I am awarding costs against him in the amount of $1,185, which is the aggregate
of the amounts in Rule 11 for preparing for the hearing, filing the
pleadings, and the conduct of a day’s hearings.
Signed at Ottawa, Canada, this 31st
day of March 2015.
“Patrick Boyle”
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