Lauzon v. R. - FCA: Fiscal Arbitrators appeal rejected by Federal Court of Appeal

Lauzon v. R. - FCA:  Fiscal Arbitrators appeal rejected by Federal Court of Appeal

http://decisions.fca-caf.gc.ca/fca-caf/decisions/en/item/212533/index.do

Lauzon v. Canada (November 24, 2016 – 2016 FCA 298, Stratas, Webb, Woods (author) JJ. A.).

Précis:   This is an appeal from a Tax Court decision upholding a gross negligence penalty where the taxpayer had claimed $308,073 in false business losses in a Fiscal Arbitrators scheme.  It is perhaps surprising that the Federal Court of Appeal reserved for 1 day and took a full 16 paragraphs to dismiss the appeal.  Nevertheless Justice Woods is a very careful jurist.

Decision:   The last four paragraphs of Justice Woods’ reasons speak volumes:

[13]           In particular, the trial judge found that Mr. Lauzon was an intelligent, sophisticated and well-educated man who in the past had prepared his own tax returns. He was aware of the refund that was being claimed and at trial he was asked why he did not inquire about such a large amount. The trial judge considered his answer to be implausible (reasons, paragraph 7). Based on this and a myriad of other factual circumstances that were well described in the reasons, the trial judge found (at para 24) that Mr. Lauzon acquiesced in the making of false statements in his return in circumstances amounting to gross negligence. There are no grounds to interfere with this amply-supported conclusion.

[14]           Mr. Lauzon also submits that palpable and overriding errors were made in applying the legal test to the facts. I do not agree. None of the factual findings of the trial judge contain errors that are obvious or overriding.

[15]           Finally, I would comment in particular concerning a submission of counsel for Mr. Lauzon that “it is un-contradicted [sic] evidence that Lauzon did not have any suspicions when signing his return in that he did not know he was claiming business losses and did not know that someone differently [sic] that year was preparing his return” (Memorandum, paragraph 43(a)(i)). This statement neglects to mention that the trial judge did not believe Mr. Lauzon’s explanation for not making further inquiries about claiming such a large refund.

[16]           In my view, the trial judge made no reviewable error in concluding that Mr. Lauzon was grossly negligent. I would dismiss the appeal with costs.