Minister of National Revenue v. Lee, (2015) 481 F.T.R. 71 (FC)

JudgeMandamin, J.
CourtFederal Court (Canada)
Case DateAugust 26, 2014
JurisdictionCanada (Federal)
Citations(2015), 481 F.T.R. 71 (FC);2015 FC 634

MNR v. Lee (2015), 481 F.T.R. 71 (FC)

MLB headnote and full text

Temp. Cite: [2015] F.T.R. TBEd. JL.011

Minister of National Revenue (applicant) v. John T. Lee (respondent)

(T-1616-14; 2015 FC 634)

Indexed As: Minister of National Revenue v. Lee

Federal Court

Mandamin, J.

May 13, 2015.

Summary:

The Minister of National Revenue applied for a compliance order under s. 231.7(1) of the Income Tax Act pursuant to a June 1, 2012 request for information (Requirement) to Mr. John T. Lee under s. 231.2(1) of the Act. The Requirement was issued to Lee to: (a) take collection action against Lee respecting his outstanding personal income tax debt; (b) determine whether Lee had sufficient personal assets to justify raising derivative assessments against him, as director, under s. 227.1 of the Act and s. 323 of the Excise Tax Act (ETA) respecting the corporations' outstanding debts under s. 153 of the Act and s. 228 of the ETA, respectively; and (c) determine whether it might be appropriate to reassess Lee under s. 160 of the Act or s. 325 of the ETA respecting the transfer of property to him by a person with whom he did not deal at arm's length for consideration that was less than the property's fair market value at a time when the transferor was indebted to the Minister under either the Act or the ETA; and (d) further the audits of Lee's 2005 to 2011 taxation years, inclusive, and, if as a result of those audits, Lee was reassessed, use the information and documents to be obtained to determine his ability to pay the tax assessed, as well as to take possible collection actions.

The Federal Court dismissed the application. It was not clear whether the Requirement was directed to Lee personally or to the various corporations from which the Minister also sought information.

Income Tax - Topic 9255

Enforcement - Production of information - Demand of information - General - The Federal Court concluded that "while the Minister [of National Revenue] has broad power to issue a requirement for information under subsection 231.2(1) of the [Income Tax] Act it is of crucial importance that the person served with the requirement is clearly identified both in name and role as relating to the nature of the demand." - See paragraph 30.

Income Tax - Topic 9256

Enforcement - Production of information - Demand of information - Compliance - The Minister of National Revenue applied for a compliance order under s. 231.7(1) of the Income Tax Act pursuant to a June 1, 2012 request for information (Requirement) to Mr. John T. Lee under s. 231.2(1) of the Act - The Requirement was issued to Lee to: (a) take collection action against Lee respecting his outstanding personal income tax debt; (b) determine whether Lee had sufficient personal assets to justify raising derivative assessments against him, as director, under s. 227.1 of the Act and s. 323 of the Excise Tax Act (ETA) respecting the corporations' outstanding debts under s. 153 of the Act and s. 228 of the ETA, respectively; and (c) determine whether it might be appropriate to reassess Lee under s. 160 of the Act or s. 325 of the ETA respecting the transfer of property to him by a person with whom he did not deal at arm's length for consideration that was less than the property's fair market value at a time when the transferor was indebted to the Minister under either the Act or the ETA; and (d) further the audits of Lee's 2005 to 2011 taxation years, inclusive, and, if as a result of those audits, Lee was reassessed, use the information and documents to be obtained to determine his ability to pay the tax assessed, as well as to take possible collection actions - The Federal Court dismissed the application - It was not clear whether the Requirement was directed to Lee personally or to the various corporations from which the Minister also sought information.

Cases Noticed:

R. v. McKinlay Transport Ltd. and C.T. Transport Inc., [1990] 1 S.C.R. 627; 106 N.R. 385; 39 O.A.C. 385, refd to. [para. 22].

Stanfield v. The Minister of National Revenue, [2008] F.T.R. Uned. 433; 2008 FC 605, refd to. [para. 23].

Minister of National Revenue v. SML Operations (Canada) Ltd., [2003] F.T.R. Uned. 459; 2003 FC 868, refd to. [para. 24].

Minister of National Revenue v. Chamandy (2014), 452 F.T.R. 26; 2014 FC 354, refd to. [para. 27].

Minister of National Revenue v. Marshall, [2006] F.T.R. Uned. 164; 2006 FC 279, refd to. [para. 29].

Statutes Noticed:

Income Tax Act, R.S.C. 1985 (5th Supp.), c. 1, sect. 231.7(1) [para. 21].

Counsel:

Margaret Nott, for the applicant;

John T. Lee, for the respondent (on his own behalf).

Solicitors of Record:

William F. Pentney, Deputy Attorney General of Canada, Toronto, Ontario, for the applicant.

This application was heard at Toronto, Ontario, on August 26, 2014, by Mandamin, J., of the Federal Court, who delivered the following decision at Ottawa, Ontario, on May 13, 2015.

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7 practice notes
  • Iggillis Holdings Inc. c. Canada (Revenu national),
    • Canada
    • Federal Court (Canada)
    • December 7, 2016
    ...81; North River Insurance Co v. Philadelphia Reinsurance Corp., 797 F. Supp. 363 (D. New Jersey 1992); Canada (National Revenue) v. Lee, 2015 FC 634, [2016] 1 C.T.C. 10; Canada (National Revenue) v. Thornton, 2012 FC 1313, [2013] 1 C.T.C. 165; R. v. Campbell, [1999] 1 S.C.R. 565, (1999), 17......
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    • Canada
    • Irwin Books International Tax Evasion in the Global Information Age
    • June 23, 2021
    ...99 Canada (National Revenue) v Chamandy, 2014 FC 354 ................................................ 99 Canada (National Revenue) v Lee, 2015 FC 634 ............................................................105 Canada (National Revenue) v Marshall, 2006 FC 279 .................................
  • International Tax Enforcement in Canada
    • Canada
    • Irwin Books International Tax Evasion in the Global Information Age
    • June 23, 2021
    ..., 2015 FC 524; Canada (National Revenue) v SML Operations (Canada) Ltd , 2003 FC 868 [ SML Operations ]; Canada (National Revenue) v Lee , 2015 FC 634. In SML Operations , ibid at para 14, Tremblay- Lamer J set out the three requirements that must all be satisied before a judge will exercis......
  • Canada (National Revenue) v. Ghermezian, 2022 FC 236
    • Canada
    • Federal Court (Canada)
    • February 23, 2022
    ...for the production of particular sets of information and documentation (see, e.g., Lee, rev’g Canada (National Revenue) v Lee, 2015 FC 634; Canada (National Revenue) v 2276230 Ontario Inc, 2021 FC 242; R v Tait, [1992] BCJ No 2693). [159] I find little value in the Respondents’......
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5 cases
  • Iggillis Holdings Inc. c. Canada (Revenu national),
    • Canada
    • Federal Court (Canada)
    • December 7, 2016
    ...81; North River Insurance Co v. Philadelphia Reinsurance Corp., 797 F. Supp. 363 (D. New Jersey 1992); Canada (National Revenue) v. Lee, 2015 FC 634, [2016] 1 C.T.C. 10; Canada (National Revenue) v. Thornton, 2012 FC 1313, [2013] 1 C.T.C. 165; R. v. Campbell, [1999] 1 S.C.R. 565, (1999), 17......
  • Canada (National Revenue) v. Ghermezian, 2022 FC 236
    • Canada
    • Federal Court (Canada)
    • February 23, 2022
    ...for the production of particular sets of information and documentation (see, e.g., Lee, rev’g Canada (National Revenue) v Lee, 2015 FC 634; Canada (National Revenue) v 2276230 Ontario Inc, 2021 FC 242; R v Tait, [1992] BCJ No 2693). [159] I find little value in the Respondents’......
  • Minister of National Revenue v. Lee, 2016 FCA 53
    • Canada
    • Canada (Federal) Federal Court of Appeal (Canada)
    • February 16, 2016
    ...his ability to pay the tax assessed, as well as to take possible collection actions. The Federal Court, in a decision reported at (2015), 481 F.T.R. 71, dismissed the application. The Minister The Federal Court of Appeal allowed the appeal. Income Tax - Topic 9253 Enforcement - Production o......
  • Minister of National Revenue v. Amdocs Canadian Managed Services Inc., 2015 FC 1234
    • Canada
    • Federal Court (Canada)
    • October 30, 2015
    ...(Minister of National Revenue) v Chamandy , 2014 FC 354 at paras 35 and 41 [ Chamandy ]; Canada ( Minister of National Revenue) v Lee , 2015 FC 634 at para 25 [ Lee ]. [29] ACMS says that the documents provided to the CRA are sufficiently detailed and fully compliant with the arm's length s......
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2 books & journal articles
  • Table of Cases
    • Canada
    • Irwin Books International Tax Evasion in the Global Information Age
    • June 23, 2021
    ...99 Canada (National Revenue) v Chamandy, 2014 FC 354 ................................................ 99 Canada (National Revenue) v Lee, 2015 FC 634 ............................................................105 Canada (National Revenue) v Marshall, 2006 FC 279 .................................
  • International Tax Enforcement in Canada
    • Canada
    • Irwin Books International Tax Evasion in the Global Information Age
    • June 23, 2021
    ..., 2015 FC 524; Canada (National Revenue) v SML Operations (Canada) Ltd , 2003 FC 868 [ SML Operations ]; Canada (National Revenue) v Lee , 2015 FC 634. In SML Operations , ibid at para 14, Tremblay- Lamer J set out the three requirements that must all be satisied before a judge will exercis......

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