Date: 20010501
Docket: A-801-99
Neutral citation: 2001 FCA 135
CORAM: STONE J.A.
BETWEEN:
LINO MASTROMONACO
Applicant
- and -
HER MAJESTY THE QUEEN
Respondent
Heard at Ottawa, Ontario, Tuesday, May 1, 2001
Judgment rendered from the Bench at Ottawa, on Tuesday, May 1, 2001
REASONS FOR JUDGMENT BY: STONE J.A.
Date: 20010501
Docket: A-801-99
Neutral citation: 2001 FCA 135
CORAM: STONE J.A.
NOËL J.A.
SEXTON J.A.
BETWEEN:
LINO MASTROMONACO
Applicant
- and -
HER MAJESTY THE QUEEN
Respondent
(Delivered from the Bench at Ottawa, Ontario, Tuesday, May 1, 2001)
[1] This is an appeal from a judgment of His Honour Judge Beaubier of the Tax Court of Canada dated November 18, 1999, dismissing the appellant's appeal with respect to assessments raised against him pursuant to subsection 227.1(1) of the Income Tax Act and subsection 323(1) of the Excise Tax Act. By these assessments the respondent seeks to recover from the appellant amounts of unremitted income tax, Canada Pension Plan installments and Goods and Services tax that a corporation known as 969045 Ontario Ltd., of which he was a director, failed to remit to the Receiver General of Canada.
[2] It is noted that the appellant is misdescribed in the style of cause in his Notice of Appeal as the "Applicant".
[3] In the Tax Court and before this Court, the appellant took the position that he was not a director of the corporation during the relevant periods and, indeed, that he had taken steps in mid-March 1993 to remove himself as a director and to appoint three other directors in his stead. He testified at trial that thereafter until September 1994, he underwent surgery and experienced a lengthy period of convalescence.
[4] The learned Tax Court Judge found that the appellant did become a director of the corporation from August 1, 1992 and remained so during the assessment periods. In making that finding, he was obviously impressed by the lack of any documentary evidence to support the appellant's claim that he had ceased to be a director in March 1993. In our view, that conclusion was open to the Tax Court Judge on the evidence before him. Moreover, it appears to have turned in large measure of his appreciation of the appellant's credibility as a witness.
[5] In view of his findings, the Tax Court Judge concluded that the appellant had failed to bring himself within the exceptions contained in subsections 227.1(3) of the Income Tax Act and subsection 323(3) of the Excise Tax Act, i.e. that he had "exercised the degree of care, diligence and skill to prevent the failure that a reasonably prudent person would have exercised in comparable circumstances". As we have already indicated, no basis has been shown for interfering with these findings of fact or with the legal conclusions based on those findings.
[6] Finally, the appellant argues that the notices of assessment were issued "more than two years after" he "ceased to be a director" of the corporation and, accordingly, that he is entitled to the protection afforded in this regard by subsection 227.1(4) of the Income Tax Act and subsection 323(5) of the Excise Tax Act. While he concedes that these provisions were not relied upon in his pleadings before the Tax Court of Canada, he asserts that he did allude to the two year time bar at the hearing before that Court both before the trial commenced and at the trial itself. After carefully examining the trial transcript, it is not entirely clear to us when the appellant ceased to be a director after he closed the business in November 1994 or, indeed, when the corporate charter was surrendered. Indeed, the evidence does not clearly establish whether he ceased to be a director and, if he did, when he did so, or whether the corporation was wound up and, if it was, when that occurred.
[7] The appeal will be dismissed with costs.
"A.J. Stone"
J.A.