Canada (National Revenue) v. Zen

Canada (National Revenue) v. Zen

Section 227.1 expressly makes directors liable for amounts owed by the corporation and for any interest and penalties relating to those amounts; read together with s.227(10) this authorizes interest to accrue on a director's assessment under s.227.1, so the Minister had authority to collect accrued interest and the RFIs under s.231.2(1) were lawful, warranting a s.231.7 compliance order.

Citation
2009 FC 531
Parties
Applicant (t 1360 06); Respondent (t 1024 08): THE MINISTER OF NATIONAL REVENUE; Respondent (t 1360 06); Applicant (t 1024 08): GIOVANNI ZEN
Court
Federal Court
Jurisdiction
Canada
Judgment Date
26 May 2009
Procedural Posture
Summary Application for Compliance Order and Judicial Review / Judgment (reasons for Judgment and Orders)
Outcome
Mr. Zen's judicial review application dismissed; Minister's application for compliance allowed; compliance order under s.231.7 to issue; no costs awarded to either party.
Legal Topics
Director Liability for Source Deductions, Accrual and Collection of Interest on Assessments, Statutory Information Requests and Compliance Orders (ss.231.2, 231.7), Judicial Review of Administrative Action
Source Language
English
Tax Law Administrative Law Civil Procedure Director Liability for Source Deductions Accrual and Collection of Interest on Assessments Statutory Information Requests and Compliance Orders (ss.231.2, 231.7) Judicial Review of Administrative Action

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Parties

THE MINISTER OF NATIONAL REVENUE

Applicant (t 1360 06); Respondent (t 1024 08)

GIOVANNI ZEN

Respondent (t 1360 06); Applicant (t 1024 08)

Procedural Posture

Summary Application for Compliance Order and Judicial Review / Judgment (reasons for Judgment and Orders)

Legal Issues

  1. 1 Whether the Minister has authority under the Income Tax Act to collect interest on an assessment of a director under s.227.1
  2. 2 Whether RFIs issued under s.231.2(1) were valid and whether a s.231.7 compliance order should issue

Ratio Decidendi

Section 227.1 expressly makes directors liable for amounts owed by the corporation and for any interest and penalties relating to those amounts; read together with s.227(10) this authorizes interest to accrue on a director's assessment under s.227.1, so the Minister had authority to collect accrued interest and the RFIs under s.231.2(1) were lawful, warranting a s.231.7 compliance order.

Court Disposition

Mr. Zen's judicial review application dismissed; Minister's application for compliance allowed; compliance order under s.231.7 to issue; no costs awarded to either party.

Orders

  • Mr. Zen’s application is dismissed without costs.
  • The Minister’s application is allowed without costs.