http://decision.tcc-cci.gc.ca/tcc-cci/decisions/en/item/109837/index.do 
Doncaster v. The Queen (May 21, 2015 – 2015 TCC 127, D’Auray J.).
Précis: This was the second Tax Court appeal by Mr. Doncaster relating to director’s liability for the unremitted GST of Doncaster Consulting Inc. (“DCI”). The first appeal had been dismissed by the Tax Court but the Federal Court of Appeal ordered a new trial largely because Mr. Doncaster had not been permitted an adjournment to call a representative of the Trustee in Bankruptcy of DCI in order to demonstrate that DCI had available Input Tax Credits (“ITCs”) that would have reduced or eliminated its GST liability (and therefore his own as a director). In this second appeal he had called a representative of the Trustee but the witness testified that he could not find any records relating to ITCs in DCI’s file. The Court adjourned and suggested Mr. Doncaster issue a subpoena
duces tecum to Bell Canada to produce records of DCI’s billings from Bell and the ITCs arising from those billings. Mr. Doncaster did not do so. As a result the Court against dismissed his appeal since he had not met the evidentiary onus of establishing any ITCs available to DCI.
Decision: The decision turned on a number of technical points:
1. Mr. Doncaster had been properly served the notice of assessment even though he had moved to a new address. He had not notified the Minister of his new address.
2. The Minister’s claim had been filed with the Trustee in a timely fashion.
3. Mr. Doncaster continued to be a director at the relevant times. While he purported to resign as sole director, the resignation was not effective without the appointment of a substitute director.
4. Mr. Doncaster did not exercise due diligence:
[91] What emerged from the evidence was that the appellant made a choice to delay the filing of the GST returns because he was convinced that DCI did not owe net tax or, if it did, that it was as a minimal amount. In addition, the appellant was of the view that he could not be found liable for the net tax owing since he had effectively resigned as a director of DCI.
[92] I am therefore of the view that the appellant has not demonstrated that he was duly diligent, that is, that he exercised the degree of care, diligence and skill to prevent the failure of DCI to remit GST owing that a reasonably prudent person would have exercised in comparable circumstances.
5. Mr. Doncaster did not adduce any evidence of unclaimed ITCs available to DCI:
[98] At trial, I advised the appellant on many occasions that he had to establish the ITCs for DCI in order to reduce its net tax, more particularly, with respect to the GST returns filed by the trustee, since no input tax credits had been taken into account. I gave the appellant many opportunities to do so.
[99] Unfortunately, the appellant did not serve a subpoena to compel Bell Canada to provide copies of the invoices or any documents that could have assisted the appellant in establishing DCI’s ITCs. I wish the appellant had made an effort to see what documents he could obtain from Bell to prove that company’s fee structure, so that I could have justified allowing some ITCs, but he did not. Therefore, I do not have any evidence to support ITC’s. I cannot allow a random number as ITC for those periods. The appellant is a non-filer. He refused to cooperate with the CRA when Mr. Bright contacted him in May 2003. He did not file any written submission; he must answer for his own turpitude.
6. The Court found that Mr. Doncaster’s conduct unduly delayed the appeal:
[102] At the continuation of the hearing on June 4th, 2013, I was expecting that a representative from Bell Canada would be called by the appellant as a witness to establish the amounts of GST that DCI paid to Bell Canada. The appellant advised the Court that he had not called a Bell Canada witness because he could not afford to advance the travelling costs with the subpoena. I then advised him that I was ready to proceed by way of conference call to avoid the travelling costs.
[103] Since I did not hear from the appellant, on September 23, 2013, I held a conference call. During the conference call the appellant stated that he would serve a subpoena duces tecum on a Bell Canada representative. In order to assist him, I signed an order giving the appellant until November 4, 2013, to serve a subpoena duces tecum on a Bell Canada representative.
[104] The appellant disregarded my order and advised the Court by way of letter dated December 12, 2013, that he had misplaced the subpoena and that he would ask this Court to issue another one.
[105] Although, the appellant kept stating that he would serve a subpoena on a Bell Canada representative, he never did.
[106] I declared the evidence closed on May 14, 2014, 11 months after I had advised the appellant that I was ready to hear the testimony of a Bell Canada representative by way of conference call.
[107] By not respecting the order and the directives of this Court, the appellant has unduly delayed the prompt and effective resolution of the appeal. Therefore, costs are granted to the respondent in accordance with the Tariff for appeals under the informal procedure (GST).
As a result the appeal was dismissed with costs.
TAGS: Excise Tax Act, GST Litigation, Input Tax Credits