Dynamic Industries Ltd. v. Canada, 2005 CAF 211 (2005)

Extract

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Dynamic Industries Ltd. v. Canada, 2005 CAF 211 (2005)

Date: 20050603

Docket: A-247-04

Citation: 2005 FCA 211

CORAM: RICHARD C.J.

SHARLOW J.A.

MALONE J.A.

BETWEEN:

DYNAMIC INDUSTRIES LTD.

Appellant

and

HER MAJESTY THE QUEEN

Respondent

Heard at Vancouver, B.C., on March 16, 2005.

Judgment delivered at Ottawa, Ontario, on June 3, 2005.

REASONS FOR JUDGMENT BY: SHARLOW J.A.

CONCURRED IN BY: RICHARD C.J.

MALONE J.A.

Date: 20050603

Docket: A-247-04

Citation: 2005 FCA 211

CORAM: RICHARD C.J.

SHARLOW J.A.

MALONE J.A.

BETWEEN:

DYNAMIC INDUSTRIES LTD.

Appellant

and

HER MAJESTY THE QUEEN

Respondent

REASONS FOR JUDGMENT

SHARLOW J.A.

[1] This is an appeal of a judgment of the Tax Court of Canada dated April 13, 2004, dismissing an income tax appeal for the 1997, 1998 and 1999 taxation years: Dynamic Industries Ltd. v. Canada , 2004 D.T.C. 2550. Dynamic Industries Ltd. (Dynamic) was reassessed for those years to disallow the deduction of certain expenses pursuant to paragraph 18(1)( p ) of the Income Tax Act , R.S.C. 1985, c. 1 (5th Supp.) on the basis that Dynamic carried on a personal services business.

[2] The central question in this case is whether paragraph 18(1)( p ) applies to Dynamic in the years under appeal. If the answer is yes, the appeal must fail. If the answer is no, the appeal must succeed.

FACTS

[3] Dynamic is a British Columbia corporation, incorporated on August 11, 1983. Its head office is in Cranbook, British Columbia. Since its incorporation, Dynamic has carried on the business of providing steel work services in Alberta and British Columbia. At all material times, the shares of Dynamic have been owned by Mr. Steven Martindale or his spouse, Ms. Shkwarok.

[4] Mr. Martindale and Ms. Shkwarok have been employees of Dynamic from the outset. Mr. Martindale provided the services of an iron worker and a construction manager, as needed. Ms. Shkwarok provided administrative services.

[5] Mr. Martindale is a certified ironworke...

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