http://decisions.fct-cf.gc.ca/fc-cf/decisions/en/item/108115/index.do 
Jarrold v. Canada (National Revenue) (February 5, 2015 – 2015 FC 153, S. Noël).
Précis: The Appellant, who is a certified management accountant, was a director of two companies, Associates and Management. He was assessed in 2006 for Associates’ unpaid GST liability for 1991 to 1993. He was also assessed for Management’s unpaid GST for periods between April 1, 1995 and June 30, 1996. He unsuccessfully appealed the Associates assessment in both the Tax Court and the Federal Court of Appeal. He then applied to the Minister for remission of his outstanding liabilities on the basis of financial hardship.
[4] The Applicant requested a remission order in the amount of $14,746.25 GST, plus $72,936.22 related penalties and interest, in respect of two corporate accounts, Associates Ltd. and Management Systems Ltd., which he no longer operates. The Applicant also requested remission of $3,252.27 in costs awarded by the FCA that have been allocated to his T1 account.
The Minister refused his application and he applied for judicial review in the Federal Court. The Court reviewed the decision and concluded that the Minister had proceeded in accordance with published guidelines and had not acted unreasonably. The application was dismissed with costs.
Decision: The applicant’s main thrust was financial hardship. The Assistant Commissioner (acting for the Minister) did not accept his arguments:
[9] The Assistant Commissioner states that the Applicant’s request seems to mainly be based on the financial hardship he is experiencing in acquitting the GST liabilities at issue. The Assistant Commissioner is of the opinion that there are no circumstances beyond the Applicant’s control that have caused a tax debt to exist or prevented him from addressing that debt.
[10] The Assistant Commissioner also states that CRA adequately assessed the director’s liability under section 323 of the Excise Tax Act, as the TCC and FCA confirmed.
[11] The Statistics Canada low income cut-off [LICO] for Canadian localities analysis, used to determine whether extreme hardship exist, demonstrated that the Applicant’s T1 returns since 2006 shows a total income between $29,000 and $45,000, which places him above LICO for a one-person household in Surrey, British Columbia. The Assistant Commissioner also adds that the CRA records show that the Applicant has equity in two properties he co-owns with his son Stephen and Ms. Della Foster. Extreme hardship does not exist.
The Court did not find that decision unreasonable:
[23] The Applicant submits that he is a single parent with a disabled son who is dependent on him, that he is a single-person household, that he has failing health and that his disposable income is shrinking. The Assistant Commissioner’s evaluation and conclusion that the financial setback remission guideline criteria do not apply to the Applicant is reasonable. Indeed, in his affidavit of the judicial review, the Applicant did not adduce any evidence that identifies factors that the Assistant Commissioner failed to consider in his analysis. Indeed, there were no circumstances beyond the Applicant’s control that caused the tax debt to exist or that prevented him from addressing that debt. The Assistant Commissioner, in coming to this conclusion, properly considered the TCC and FCA decisions which concluded that the Applicant acted without due diligence in the management of his corporate affairs to ensure the remittance of trust funds. Moreover, the Assistant Commissioner properly determined that the remission guideline criteria of extreme financial hardship did not apply to the Applicant’s case, because based on the facts, the Applicant’s income places him above the LICO for both the one-person and two-person household. The Assistant Commissioner also considered the Applicant’s equity in the two properties he co-owns as well as rental income in coming to this determination. Moreover, the fact that Ms. Foster is the Applicant’s girlfriend and not his partner, as alleged by the Applicant, has no bearing on the reasonableness of the Assistant Commissioner’s Decision.
Nor did the delay in ruling on Mr. Jarrold’s request invalidate the decision:
[27] The Applicant also raised the issue that it took “a full twenty eight months after my request of November 10, 2011 without contact to the local CRA office or myself to determine if there were circumstances she (Ms. Stirling) might be aware of” (AM at para 1). This procedural argument cannot stand. The Financial Administration Act does not prescribe any procedures for handling requests for tax debt reduction. It is left to the discretion of the Minister. There was thus no need for the local CRA office to conduct an initial review and Ms. Stirling was not obliged to contact the Applicant. Moreover, the Applicant was given an opportunity to include the information he wished the Assistant Commissioner to consider in his remission request. The Assistant Commissioner thus had the opportunity to evaluate all the information provided by the Applicant in making his decision.
As a result the Court concluded that the decision did not merit its intervention:
[28] The Assistant Commissioner’s decision is thus reasonable. He properly assessed the remission guidelines and took into considerations other relevant factors such as the Applicant’s history of non-compliance with respect to the T2, T4 and GST filing and remittance requirements of Associates Ltd. and Management Systems Ltd. The Assistant Commissioner did not err in the exercise of his discretion. The intervention of this Court is not warranted.
Thus the application was dismissed with costs.
TAGS: Excise Tax Act, Judicial Review, Taxpayer Relief