Artistic Ideas Inc. v. Canada Customs and Revenue Agency, (2005) 330 N.R. 378 (FCA)

JudgeRothstein, Sexton and Evans, JJ.A.
CourtFederal Court of Appeal (Canada)
Case DateFebruary 14, 2005
JurisdictionCanada (Federal)
Citations(2005), 330 N.R. 378 (FCA);2005 FCA 68

Artistic Ideas Inc. v. CCRA (2005), 330 N.R. 378 (FCA)

MLB headnote and full text

Temp. Cite: [2005] N.R. TBEd. MR.008

Canada Customs and Revenue Agency (appellant) v. Artistic Ideas Inc. (respondent)

(A-266-04; 2005 FCA 68)

Indexed As: Artistic Ideas Inc. v. Canada Customs and Revenue Agency

Federal Court of Appeal

Rothstein, Sexton and Evans, JJ.A.

February 25, 2005.

Summary:

The applicant arranged the sale of art work to individual taxpayers who donated the art works to registered charities. The donors obtained a tax benefit from such donations based on the appraised value of the art works, which exceeded what the donors paid for them. The transactions were sometimes referred to as "art flips". The Minister began an audit of the appli­cant. A requirement to provide informa­tion and documents was served on the appli­cant pursuant to s. 231.2(1) of the Income Tax Act. The appli­cant applied for an order striking the portion of the requirement that required the applicant to provide the names of the donors and charities.

The Federal Court, in a decision reported at 251 F.T.R. 223, set aside that part of the requirement which purported to require the ap­plicant to provide the names of the donors without prior judicial authorization. The re­quirement as it related to disclosure of the names of the charities was valid and no judi­cial authorization was necessary. The appli­cant appealed.

The Federal Court of Appeal dismissed the appeal.

Income Tax - Topic 9258

Enforcement - Production of information - Demand of information - Respecting un­named persons - The applicant arranged the sale of art work to individual taxpayers who donated the art works to registered charities - The donors obtained a tax bene­fit from such donations based on the ap­praised value of the art works, which ex­ceeded what the donors paid for them - The trans­actions were sometimes referred to as "art flips" - The Min­ister began an audit of the applicant - A requirement to provide infor­mation and documents was served on the applicant pursuant to s. 231.2(1) of the Income Tax Act, request­ing the names of the donors and the char­ities - The Federal Court held that since the Minister intended to investi­gate and reassess the donors, the Minister was only entitled to demand disclosure of the names of the donors by obtaining prior judicial authorization pursu­ant to ss. 231.2(2) and (3) of the Act - Since there was no evi­dence that the Min­ister wanted to audit the charities, disclo­sure of the names of the charities was a valid part of the require­ment without prior judicial authorization - The Federal Court of Appeal dismissed an appeal.

Income Tax - Topic 9258

Enforcement - Production of information - Demand of information - Respecting un­named persons - The Federal Court of Ap­peal stated that under the scheme of s. 231.2 of the Income Tax Act, the Minister could require a third party to provide in­formation and documents pertaining to the third party's compliance with the Act - How­ever, the Minister could not impose a requirement on the third party to provide in­­formation or documents relating to un­named persons who he wished to inves­ti­gate, unless he first obtained judicial au­thorization (ss. 231.2(2) and (3)) - A judge could authorize the Minister to require such information only if the unnamed per­sons were ascertainable and only if satis­fied that information or docu­ments relating to them was required to verify compliance by them with the Act - Where unnamed per­sons were not them­selves under inves­tigation, ss. 231.2(2) and (3) did not apply and judicial authorization was not neces­sary - See paragraphs 8 to 11.

Cases Noticed:

Richardson (James) & Sons Ltd. v. Minis­ter of National Revenue, [1984] 1 S.C.R. 614; 54 N.R. 241, refd to. [para. 9].

Canadian Bank of Commerce v. Canada (At­torney General), [1962] S.C.R. 729; 35 D.L.R.(2d) 49, refd to. [para. 9].

R. v. Van Egmond (A.) (2002), 166 B.C.A.C. 264; 271 W.A.C. 264; 215 D.L.R.(4th) 697; 2002 BCCA 226, refd to. [para. 14].

Statutes Noticed:

Income Tax Act, R.S.C. 1985 (5th Supp.), c. 1, sect. 231.2(1), sect. 231.2(2), sect. 231.2(3) [para. 7].

Counsel:

Peter A. Vita, Q.C., and P. Tamara Sugun­asiri, for the appellant;

Martin Teplitsky, Q.C., for the respondent.

Solicitors of Record:

John H. Sims, Q.C., Deputy Attorney Gen­er­al of Canada, Ottawa, Ontario, for the appellant;

Teplitsky, Colson, Toronto, Ontario, for the respondent.

This appeal was heard on February 14, 2005, at Toronto, Ontario, before Rothstein, Sexton and Evans, JJ.A., of the Federal Court of Appeal. The following judgment of the Court of Appeal was delivered by Roth­stein, J.A., on February 25, 2005.

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20 practice notes
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    • Canada
    • Irwin Books International Tax Evasion in the Global Information Age
    • 23 d3 Junho d3 2021
    ...Mines d’Or Ltée v Canada (AG), 2010 FC 1070 .................311–12 Artistic Ideas Inc v Canada Revenue Agency, 2004 FC 573, af’d 2005 FCA 68 ......................................................................................................100 Barquero v United States, 18 F 3d 1311 (5th......
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    • 21 d5 Julho d5 2023
    ...“consistent at a conceptual level with much authority”, including Canada (Customs and Revenue Agency) v Artistic Ideas Inc, 2005 FCA 68 [Artistic Ideas FCA] and eBay Canada Ltd v MNR, 2008 FCA 348 [eBay]. The Minister states Zeifmans is attempting to revive an interpretation......
  • International Tax Enforcement in Canada
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    • Irwin Books International Tax Evasion in the Global Information Age
    • 23 d3 Junho d3 2021
    ...CA, above note 12; MNR v Sand Exploration Ltd (1995), 95 DTC 5469 (FCTD); Artistic Ideas Inc v Canada Revenue Agency , 2004 FC 573, af’d 2005 FCA 68. 34 See Michael Ziesmann, “Gone Fishing: An Analysis of CRA Powers and Policies relating to the Use of Fishing Expeditions in Information Gath......
  • Ghermezian v. Canada (Attorney General), 2020 FC 1137
    • Canada
    • Federal Court (Canada)
    • 9 d3 Dezembro d3 2020
    ...the leading authorities are the decisions of the Federal Court of Appeal in Canada (Customs and Revenue Agency) v Artistic Ideas Inc., 2005 FCA 68 [Artistic Ideas] and the subsequent decision of the Supreme Court of Canada in Redeemer Foundation v Minister of National Revenue, 2008 SCC 46 ......
  • Request a trial to view additional results
18 cases
  • Canada (National Revenue) v. Zeifmans LLP,
    • Canada
    • Federal Court (Canada)
    • 21 d5 Julho d5 2023
    ...“consistent at a conceptual level with much authority”, including Canada (Customs and Revenue Agency) v Artistic Ideas Inc, 2005 FCA 68 [Artistic Ideas FCA] and eBay Canada Ltd v MNR, 2008 FCA 348 [eBay]. The Minister states Zeifmans is attempting to revive an interpretation......
  • Ghermezian v. Canada (Attorney General), 2020 FC 1137
    • Canada
    • Federal Court (Canada)
    • 9 d3 Dezembro d3 2020
    ...the leading authorities are the decisions of the Federal Court of Appeal in Canada (Customs and Revenue Agency) v Artistic Ideas Inc., 2005 FCA 68 [Artistic Ideas] and the subsequent decision of the Supreme Court of Canada in Redeemer Foundation v Minister of National Revenue, 2008 SCC 46 ......
  • Zeifmans LLP v. Canada, 2022 FCA 160
    • Canada
    • Court of Appeal (Canada)
    • 27 d2 Setembro d2 2022
    ...level with much authority: multiple binding decisions of this Court (Canada (Customs and Revenue Agency) v. Artistic Ideas Inc., 2005 FCA 68, 330 N.R. 378 and eBay Canada Ltd. v. Canada (National Revenue), 2008 FCA 348, [2010] 1 F.C.R. 145 at para. 23); an obiter of the Supreme Court of Can......
  • Minister of National Revenue v. Greater Montréal Real Estate Board, (2006) 303 F.T.R. 29 (FC)
    • Canada
    • Canada (Federal) Federal Court (Canada)
    • 27 d4 Julho d4 2006
    ...Exploration Ltd. et al. (1995), 96 F.T.R. 113 (T.D.), refd to. [para. 17]. Artistic Ideas Inc. v. Canada Customs and Revenue Agency (2005), 330 N.R. 378; 2005 FCA 68, refd to. [para. Redeemer Foundation v. Minister of National Revenue (2005), 281 F.T.R. 143; 2005 FC 1361, refd to. [para. 17......
  • Request a trial to view additional results
2 books & journal articles
  • Table of Cases
    • Canada
    • Irwin Books International Tax Evasion in the Global Information Age
    • 23 d3 Junho d3 2021
    ...Mines d’Or Ltée v Canada (AG), 2010 FC 1070 .................311–12 Artistic Ideas Inc v Canada Revenue Agency, 2004 FC 573, af’d 2005 FCA 68 ......................................................................................................100 Barquero v United States, 18 F 3d 1311 (5th......
  • International Tax Enforcement in Canada
    • Canada
    • Irwin Books International Tax Evasion in the Global Information Age
    • 23 d3 Junho d3 2021
    ...CA, above note 12; MNR v Sand Exploration Ltd (1995), 95 DTC 5469 (FCTD); Artistic Ideas Inc v Canada Revenue Agency , 2004 FC 573, af’d 2005 FCA 68. 34 See Michael Ziesmann, “Gone Fishing: An Analysis of CRA Powers and Policies relating to the Use of Fishing Expeditions in Information Gath......

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