Chukwuebuka (Stanley) Ndibe

The appellant appealed assessments for unremitted source deductions of a craft brewery corporation of which he was a director.

He argued he had resigned outside the two-year limitation period and had exercised due diligence.

The Tax Court of Canada found that his resignation was only effective when provided in writing to the company's lawyer, which fell within the two-year limitation period.

The Court also held that the appellant failed to establish the due diligence defence, as his inquiries were not directed at preventing the failure to remit.

The appeals were dismissed.

The Minister reassessed the appellants using a net worth assessment, adding unreported income and unremitted GST/HST, and imposing gross negligence penalties.

The Tax Court found that the net worth assessment was justified due to inadequate record-keeping and co-mingling of personal and business expenses, which also constituted misrepresentation allowing reassessment beyond the normal period.

However, the Court cancelled the gross negligence penalties, finding the appellants' conduct amounted to poor record-keeping rather than wilful blindness or gross negligence.

The appeals were allowed in part to reduce the unreported income and vacate the penalties.