Date:
20110510
Docket:
A-430-09
Citation:
2011 FCA 159
CORAM: SEXTON
J.A.
DAWSON J.A.
STRATAS
J.A.
BETWEEN:
THOMAS GERALD
LIDDLE
Appellant
and
HER MAJESTY
THE QUEEN
Respondent
REASONS FOR JUDGMENT OF THE
COURT
(Delivered
from the Bench at Toronto, Ontario, on May 10,
2011)
STRATAS J.A.
[1]
This
is an appeal from the judgment of Justice Diane Campbell of the Tax Court of
Canada: 2009 TCC 451.
[2]
The
Tax Court judge found that the appellant was liable, as a director of AquaNorth
Farms Inc., to pay certain tax amounts that AquaNorth Farms Inc. should have
paid but did not, along with penalties and interest. Specifically, AquaNorth
Farms Inc. failed to remit GST under the Excise Tax Act, R.S.C. 1985, c.
E-15. It also failed to make payroll source deductions under the Canada
Pension Plan, R.S.C. 1985, c. C-8 and the Employment Insurance Act,
S.C. 1996, c. 23.
A. The finding of
liability
[3]
Before
the Tax Court judge were two main questions, both of which she determined
against the appellant:
(1)
Was
the appellant a director of AquaNorth Farms Inc. at the time that that
corporation was required to remit GST and payroll source deductions?
The Tax Court
judge answered this in the affirmative, finding that the appellant was a
director at the relevant time. Therefore, the appellant was liable to pay the
amounts that AquaNorth Farms Inc. should have paid: see the Canada Pension
Plan, supra, subsection 21.1(1), the Employment Insurance Act,
supra, subsection 83(1) and the Excise Tax Act, supra, subsection
323(1).
(2) Did
the appellant exercise due diligence? Specifically, did he act with “the degree
of care, diligence and skill to prevent [AquaNorth Farms Inc.’s] failure [to
remit GST and payroll source deductions to the Minister] that a reasonably
prudent person would have exercised in comparable circumstances?” (See subsection
227.1(3) of the Income Tax Act, R.S.C. 1985, c. 1 (5th Supp.), made applicable
to the appellant by subsection 21.1(2) of the Canada Pension Plan, supra,
and subsection 83(2) of the Employment Insurance Act, supra; see
also subsection 323(3) of the Excise Tax Act, supra.)
The Tax Court
judge answered this in the negative, finding that the appellant had not
exercised due diligence.
[4]
In
answering these two main questions, the Tax Court judge made a number of
factual findings. One important factual finding was that AquaNorth Farms Inc. became
subject to the tax liabilities while the appellant still had effective control
of AquaNorth’s finances and daily operations. Another important factual finding
was that the appellant took no proactive steps to ensure that AquaNorth
remitted to the Minister amounts that it was deducting from employee paycheques
and GST amounts that it was collecting from its customers. In this Court, the
onus is on the appellant to demonstrate that the Tax
Court judge’s factual findings are vitiated by palpable and overriding error: Housen v. Nikolaisen, [2002] 2 S.C.R.
235, 2002 SCC 33. We are not satisfied that any such error is
present. Indeed, the factual findings of the Tax Court judge are well-supported
by the evidentiary record.
[5]
We
see no legal error in the Tax Court judge’s consideration of whether the
appellant was a director at the relevant time. On the question of due
diligence, the Tax Court judge carefully considered the legal test for due
diligence that should be applied to the evidence before us. She adopted the
tests set out by this Court in Soper v. The Queen, 97 D.T.C. 5407 at
page 5416 and Hartnell v. The Queen, 2008 D.T.C. 6173 at paragraph 12.
Here, likewise, we see no legal error on the part of the Tax Court judge.
B. The
involvement of another director
[6]
The
appellant submitted that another director of AquaNorth Farms Inc. was heavily
involved at the times in question. Even if that is the case, by itself that does
not give the appellant any defence. The express words of the provisions of
subsection 21.1(1) of the Canada Pension Plan, subsection 83(1) of the Employment
Insurance Act, and subsection 323(1) of the Excise Tax Act, make the
appellant “jointly and severally, or solidarily, liable” for the full amounts that
AquaNorth Farms Inc. failed to remit to the Minister.
C. The
Tax Court judge’s failure to grant an adjournment
[7]
In
the Tax Court, the appellant requested that the trial be adjourned under
section 137 of the Tax Court of Canada Rules (General Procedure),
SOR/90-688a for three reasons: he wanted to obtain legal counsel to represent
him, he was not aware that a particular individual would be called as a witness
against him, and he had not received some information he sought from the
Minister. The Tax Court judge refused the adjournment. Among other things, the
Tax Court judge found that some of the comments he made during his request for
an adjournment were misleading.
[8]
We
note that adjournments are discretionary matters related to trial management
and, as a result, this Court will interfere only where a trial judge is shown
to be clearly wrong: Superior Filter Recycling Inc. v. The Queen, 2006
DTC 6491 at paragraph 2; Wagg v. Canada, 2003 FCA 303 at paragraphs 21
and 26. In our view, no such error has been demonstrated in this case. It is
apparent to us that the Tax Court judge was mindful of the need for the
appellant to have a fair trial. Further, there were a number of reasons
supporting the Tax Court judge’s discretionary refusal to grant the appellant an
adjournment. These include the following:
(a) The
appellant had ample opportunity to retain counsel before the trial.
(b) Absent
a specific request during discoveries, there is no requirement in the Rules for
parties to exchange the names of their respective witnesses before trial. Before
trial, the appellant was notified by the Crown that it would be calling two
witnesses but the appellant did not ask the Crown who they were.
(c) The
appellant could have pursued his requests for further information by various
means in a timely way under the Rules and the Access to Information Act,
R.S.C. 1985, c. A-1, but did not do so.
(d) The
misleading nature of the comments the appellant made during his request for an
adjournment.
D. Disposition
[9]
For
the foregoing reasons, we shall dismiss the appeal, with costs.
"David
Stratas"
Email this Content