Allison Lubeck

The Minister assessed the appellant corporation under subsection 224(4) of the Income Tax Act for failing to comply with a requirement to pay issued in respect of a tax debtor who was the corporation's sole shareholder and director.

The tax debtor had withdrawn cash from the corporation's bank account to pay his spouse's credit card bills while the requirement was in effect.

The Tax Court of Canada dismissed the appeal, finding that the corporation had a responsibility at law to make payments to the tax debtor from available funds, and the withdrawn sums should have been remitted to the Receiver General.

The appellants, who donated wine to registered charities and claimed tax credits, brought motions to strike out several assumptions of fact pleaded in the respondent's replies.

The appellants argued the assumptions lacked precision, were irrelevant, or improperly pertained to third parties.

The Tax Court of Canada struck out assumptions relating to the actions of other donors and prior transactions with leave to amend, finding them too broad or lacking a specified link to the appellants.

The remaining assumptions regarding market conditions and appraisal methodology were allowed to stand as they provided relevant context for the fair market value determinations.