Date: 20001031
Docket:1999-226-GST-I
BETWEEN:
KARL SCHUSTER,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Motion for the determination of a question of
law
Motion for particulars heard in part
on October 16, 2000 in Windsor, Ontario, by
the Honourable Alban Garon
Chief Judge
Appearances
Counsel for the
Appellant:
John Mill
Counsel for the
Respondent:
Carole Benoit
ORDER
Upon Motion made by the Appellant, Notice of which was dated
October 6, 2000, for:
1.
A determination of a question of law namely:
a) Whether or not the registration of the Federal Court
judgment against the corporation operates as a discharge of the
joint obligee director.
b) Is the assessment of the director a nullity for prejudice
arising from lack of particularity.
c) Or in the alternative ought the Minister to deliver further
particulars in accordance with the demand for particulars
attached hereto as Schedule A.
2.
Such further and other relief as may be requested and this
Honourable Court may allow.
In his Notice of Motion, the Appellant in stating the grounds for
the motion referred to section 52 and paragraphs 58(1)(a) and (b)
of the Tax Court of Canada Rules (General Procedure).[1]
In the course of hearing this motion on October 16, 2000, the
following was agreed by the parties:
a)
Counsel for the Appellant was to submit a list of questions
relating to the assessment made against the Appellant dated
December 2, 1996 to Counsel for the Respondent by Friday, October
20, 2000;
b)
Counsel for the Respondent was to provide particulars in respect
of each question by November 24, 2000.
In a letter dated October 20, 2000 to the Court and to Counsel
for the Respondent, Counsel for the Appellant complied with his
part of the agreement and provided a list of the particulars
required contained in the following excerpts from the
aforementioned letter:
"It is for those reasons that my client requires the
following particulars:
Properties
In previous correspondence counsel for the Minister provided a
list of ten properties that were involved in the audit. However,
upon production the Minister provided information with respect to
14 properties. Despite previous written requests the Minister has
never clarified which properties we are dealing with. Therefore,
please provide the exact list of the addresses we are dealing
with so that we will then know what addresses we do not have to
deal with.
Failure to Remit
The Minister takes the position that not all of the
transactions involved the sale of 'real property'. There
is a distinction: 'building contracts with a lot' and
'building contracts without a lot'. Further, there were a
number of projects that were abandoned and the Minister indicates
that for some properties there were forfeited deposits; and on
other properties there was litigation giving rise to an account
receivable. Therefore, for each property please provide the
factual basis and the statutory basis that give rise to the
liability to remit, together with the dates on which it is said
that the obligation to remit arises.
Net Tax
The net tax area has been a source of great confusion for the
appellant. Loukar lost substantial amounts of money, being paid
to GST registrants, (notionally this ought to result in a return
to Loukar). In addition Mr. Schuster also paid out approximately
$250,000.00 of his own money to pay debts of Loukar for which he
was personally liable. Mr. Schuster is astounded that the
Minister can take a position that there is GST owing. Mr.
Schuster was careful to follow the directions given by Mr. Feurth
in terms of documenting the ITC's, obtaining his rebates,
both for GST and FST.
Therefore, with respect to each of the properties in issue
please identify and provide the particulars of the following:
a)
The total amount of GST it is said that ought to have
been collected for each property and the
statutory
basis for such obligation.
b)
The ITC's which were allowed and why.
c)
The ITC's that were not allowed and why.
d)
The rebates for both GST and FST which were
allowed and why.
e)
The rebates for both GST and FST which were not
allowed and why.
f)
Any other amounts in issue.
Also, with the letter of Counsel for the Appellant dated October
20, 2000 referred to above, a Supplementary Notice of Motion was
filed with the Court also dated October 20, 2000. The Appellant
in the Supplementary Notice of Motion "requests that the
Court consider the relief set out below as supplementary to the
relief requested in the motion heard on October 16th,
2000, adjourned sine die, to allow the Minister time to file
further and better particulars."
In the Appellant's view, the filing of the Supplementary
Notice of Motion was done "in order to clear any potential
confusion" as "the relief requested by the appellant in
the motion for particulars did not identify the proper rule
numbers (52 and 53) and was a little confusing as to whether it
was a motion for particulars or a motion for the determination of
a question of law."
The Supplementary Notice of Motion dated October 20, 2000 reads
in part as follows:
THE SUPPLEMENTARY MOTION IS FOR:
1. An order that the Minister provide complete particulars in
accordance with the requests for particulars dated August
22nd, and October 20th, 2000.
2. Failing which the Appellant requests that the assessment be
struck.
3. Failing which the Appellant requests that the Minister have
the burden of proving the failure to remit net tax;
4. Such further and other relief as may be requested and this
Honourable Court may allow.
It is ordered that the hearing of the Appellant's motion for
the determination of questions of law set out in subparagraphs a)
and b) of paragraph numbered 1 of the Notice of Motion dated
October 6, 2000, be adjourned sine die.
The hearing of the Appellant's motion for further and better
particulars has been heard in part and is adjourned pending the
filing and serving of particulars by the Respondent.
It is further ordered that the Respondent supply the particulars
required by November 24, 2000.
The hearing of the appeal from the assessment dated December 2,
1996 will be set at a later date once it has been disposed of the
motion for particulars and the motion for the determination of
questions of law referred to above.
Signed at Ottawa, Canada, this 31st day of October 2000.
"Alban Garon"
C.J.T.C.C.
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