Radonjic v. Canada Revenue Agency, (2013) 438 F.T.R. 294 (FC)

• Judge: Russell, J.
• Court: Federal Court (Canada)
• Case Date: July 08, 2013
• Jurisdiction: Canada (Federal)
• Citations: (2013), 438 F.T.R. 294 (FC);2013 FC 916

Radonjic v. CRA (2013), 438 F.T.R. 294 (FC)

MLB headnote and full text

[French language version follows English language version]

[La version française vient à la suite de la version anglaise]

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Temp. Cite: [2013] F.T.R. TBEd. SE.014

Peter Radonjic (applicant) v. Canada Revenue Agency (respondent)

(T-987-12; 2013 FC 916; 2013 CF 916)

Indexed As: Radonjic v. Canada Revenue Agency

Federal Court

Russell, J.

August 29, 2013.

Summary:

A taxpayer declared poker winnings for the 2004-2007 taxation years. He filed T1 Adjustment Requests, seeking to have the income tax he paid for those years returned to him. The Minister of National Revenue (MNR) refused to exercise its discretion under s. 152(4.2) of the Income Tax Act to reassess after the normal reassessment period, holding that the taxpayer's poker winnings were taxable income. The taxpayer applied for judicial review.

The Federal Court allowed the application, quashed the MNR's decision and returned the matter for reconsideration in accordance with the court's reasons.

Income Tax - Topic 1051.1

Income from a business or property - Income from business - What constitutes - [See both Income Tax - Topic 1058 ].

Income Tax - Topic 1058

Income from a business or property - Income from business - Gambling (incl. on-line poker) - The Federal Court stated that "Gambling cases can be difficult to assess, but the jurisprudence is clear that whether an individual is involved in a business depends upon the specific facts of each case and there is no authority or principle which says that the fruits of gambling cannot be taxable. It all depends in each case upon whether the gambling is conducted in a sufficiently commercial manner, and that assessment requires an examination of a wide range of factors ... " - See paragraph 44.

Income Tax - Topic 1058

Income from a business or property - Income from business - Gambling (incl. on-line poker) - A taxpayer, an online poker player, declared poker winnings for the 2004-2007 taxation years - He later sought reassessments, seeking return on the tax paid - The Minister of National Revenue (MNR) refused to exercise its discretion to reassess after the normal reassessment period (Income Tax Act, s. 152(4.2)), holding that the taxpayer's poker winnings were taxable income - The taxpayer applied for judicial review - The Federal Court allowed the application - The MNR's exercise of discretion under s. 152(4.2) lacked intelligibility and justification and, fell outside the range of possible, acceptable outcomes which were defensible in respect of the facts and law - There was nothing in the taxpayer's situation to set him apart from the usual enthusiastic and ever-hopeful poker player engaged in a personal endeavour - The factors relied upon by the MNR to conclude otherwise rendered the decision unreasonable within the meaning of Dunsmuir - See paragraphs 1 to 54.

Income Tax - Topic 1061

Income from a business or property - Income from business - Carrying on a business - What constitutes - [See both Income Tax - Topic 1058 ].

Income Tax - Topic 7845

Returns, assessments, payment and appeals - Assessments and reassessments - Time for - Section 152(4.2) of Income Tax Act allowed the Minister of National Revenue to conduct a reassessment outside of the normal 3-year period, but within ten years of the taxation years in question - The Federal Court stated that the Minister was granted a broad discretion under that provision and the standard of review applicable to the decision was reasonableness - See paragraph 18.

Income Tax - Topic 7845

Returns, assessments, payment and appeals - Assessments and reassessments - Time for - [See second Income Tax - Topic 1058 ].

Income Tax - Topic 7851

Returns, assessments, payment and appeals - Assessments and reassessments - Reassessments - [See second Income Tax - Topic 1058 ].

Income Tax - Topic 8083

Returns, assessments, payment and appeals - Judicial review - Standard of review - [See first Income Tax - Topic 7845 ].

Cases Noticed:

New Brunswick (Board of Management) v. Dunsmuir, [2008] 1 S.C.R. 190; 372 N.R. 1; 329 N.B.R.(2d) 1; 844 A.P.R. 1; 2008 SCC 9, refd to. [para. 17].

Caine v. Canada Revenue Agency (2011), 382 F.T.R. 111; 2011 FC 11, refd to. [para. 18].

Hoffman v. Canada (Attorney General), [2010] N.R. Uned. 191; 2010 FCA 310, refd to. [para. 18].

Khosa v. Canada (Minister of Citizenship and Immigration) (2009), 385 N.R. 206; 2009 SCC 12, refd to. [para. 19].

Leblanc v. Canada, 2006 TCC 680, refd to. [para. 24].

Cohen v. Canada, 2011 TCC 262, refd to. [para. 25].

Bélec v. Minister of National Revenue (1994), 95 D.T.C. 121, refd to. [para. 27].

Markowitz v. Minister of National Revenue, 64 D.T.C. 397, refd to. [para. 28].

Luprypa v. Canada, [1997] T.C.J. No. 469, refd to. [para. 33].

Stewart v. Minister of National Revenue, [2002] 2 S.C.R. 645; 288 N.R. 297; 2002 SCC 46, refd to. [para. 35].

Belawski v. Minister of Natural Revenue, 1954 CarswellNat 152; 11 Tax Appeal Board Cases 299, refd to. [para. 44].

Abraham et al. v. Canada (Attorney General) (2012), 440 N.R. 201; 2012 FCA 266, refd to. [para. 45].

Statutes Noticed:

Income Tax Act, R.S.C. 1985 (5th Supp.), c. 1, sect. 9(1), sect. 152(4.2) [para. 18].

Income Tax Act, Interpretation Bulletin IT-334R2, Miscellaneous Receipts, sect. 10 [para. 4].

Interpretation Bulletin - see Income Tax Act, Interpretation Bulletins.

Authors and Works Noticed:

Alarie, Ben, The Taxation of Winnings from Poker and Other Gambling Activities in Canada (2011), Canadian Tax Journal 59:4, p. 747 [para. 28].

Canada Revenue Agency, Income Tax Technical News, No. 41 (December 2009), generally [para. 30].

Counsel:

Peter Radonjic, on his own behalf, for the applicant;

Zachary Froese and Pavanjit Mahil Pandher, for the respondent.

Solicitors of Record:

William F. Pentney, Deputy Attorney General of Canada, Vancouver, British Columbia, for the respondent.

This application was heard in Vancouver, British Columbia, on July 8, 2013, before Russell, J., of the Federal Court, who delivered the following decision on August 29, 2013.