Lai v. The Queen, docket 2000-1418-GST-I (Informal Procedure)

Date: 20000213

Docket: 2000-1418-GST-I

BETWEEN:

TRINH LAI,

Appellant,

and

HER MAJESTY THE QUEEN,

Respondent.

Reasons for Judgment

Beaubier, J.T.C.C.

[1]            This appeal pursuant to the Informal Procedure was heard at Toronto, Ontario on February 7 and 8, 2001. The Appellant testified. The Respondent called Michael Mahoney, Litigation Officer in the file and Andrew Suga, Technical Advisor, Investigations Division, respecting Ty Lai's assessments.

[2]            Paragraphs 5 to 7 inclusive of the Reply to the Notice of Appeal read:

5.              In so assessing the Appellant, the Minister relied on, inter alia, the following assumptions:

(a)            the facts admitted in paragraph 2 above;

(b)            the transferor wrote a certified cheque in the amount of $82,450.04 from his bank account at the Bank of Nova Scotia to Paul F. Lepine in trust for the purchase of a home which was registered in the name of the transferor daughter, the Appellant;

(c)            the transferor and the Appellant were not operating at arm's length;

(d)            at all material times, the transferor was operating a sole proprietorship as a worm distributor; and

(e)            at the time of the transfer, the transferor was indebted for unremitted in GST in the amount of $81,229.88, including late remittance penalties and interest, for the periods from January 1, 1992 to December 31, 1994, as detailed in "APPENDIX A" as attached to the Assessment and attached thereto.

B.             ISSUES TO BE DECIDED

6.              The issues are:

(a)            whether the Appellant is liable to pay the amount of $81,229.88, including late remittance penalties and interest, pursuant to section 325 of the Act in respect of the transfer of property to the Appellant; and

(b)            whether section 325 of the Act infringes any rights of the Appellant guaranteed by the Canadian Charter of Rights and Freedoms (the "Charter").

C.             STATUTORY PROVISIONS, GROUNDS RELIED ON              AND RELIEF SOUGHT

7.              He relies on, inter alia, sections 123, 126 and 325 of the Act and on sections 1 and 15 of the Charter.

[3]            The Appellant led evidence to the effect that the transferor Ty Lai, the Appellant's father, pled guilty to tax evasion respecting much lower amounts of GST than are in question respecting this assessment for the same periods of Ty Lai's business as are in question here. However, that fact does not refute the assessments of Ty Lai that are related to this transfer or any subsequent assessment of the Appellant. A charge of tax evasion requires the Crown to prove its case beyond a reasonable doubt. Whereas the assessment of GST against Ty Lai requires Mr. Lai to refute the assumptions respecting that assessment.

[4]            Appellant's counsel further argued issue estoppel respecting the guilty plea. In the Court's view that does not apply for these reasons:

1.              Ms Lai is a different person than Ty Lai.

2.              Issue estoppel would apply to grant judgment without trial upon assessments of Ty Lai to the extent of the amounts to which he plead guilty. However, the Minister could proceed thereafter to try assessments of Mr. Lai on the amounts in excess of the guilty pleas and the usual rules of procedure in this Court would apply.

[5]            The Appellant did testify that over the years various gifts and loans had been made to her grandfather, as head of the family, and to her father, to hold amounts of money for her. These were alleged to be by aunts, at least one uncle, her grandfather's brother and an aunt in the U.S.A. Some of the aunts and uncles were available in Canada but none testified because they were working. Her grandfather and one aunt are now dead.

[6]            There was no writing about the alleged gifts. None of the living relatives verified the Appellant's testimony, despite the fact that some appear to be in London, Ontario; one is in Ottawa and some may be in the Toronto area. This failure to call such witnesses results in the Court making an adverse inference respecting these alleged donations. This adverse inference is also made because the Appellant's counsel, in cross-examining Mr. Suga, established that two firms in the Toronto area paid Mr. Lai moneys by making cheques out to several of his relatives; they in turn cashed the cheques and paid cash to Ty Lai. At least some of these same relatives were aunts and uncles of the Appellant. Neither the Appellant nor Mr. Suga identified these people by name. However, it appears in these circumstances that some or all of these alleged gifts or loans by these aunts and uncles, if they occurred, were in fact the money of Ty Lai.

[7]            Moreover, if the Appellant had, as she alleged, borrowed money from some of these relatives, she would know the exact amounts borrowed, when they were to be repaid and one would normally expect some written evidence of this. The Appellant specifically said that there is no writing. Nor were any bank deposit amounts placed in documentary evidence. Some of her numbers were approximate. None of her testimony indicated clearly that even the "lending" or "donating" relative had told her of the amounts. Rather they were rounded amounts that her grandfather or father had allegedly received. Her father, Ty Lai, did not testify and no reason was given for this failure.

[8]            These facts negate the Appellant's testimony about the alleged gifts or loans without satisfactory corroboration. There was no corroboration. In these circumstances, the testimony of the Appellant is not believed. She has failed to meet the onus upon her.

[9]            The Appellant has failed to refute any of the assumptions and the appeal is dismissed.

Signed at Ottawa, Canada this 13th day of February, 2001.

"D.W. Beaubier"

J.T.C.C.