





CITATION:
Adams v. Anderson, 2011
          ONCA 381



DATE: 20110517



DOCKET: C52065



COURT OF APPEAL FOR ONTARIO



Armstrong, Juriansz and Watt JJ.A.



BETWEEN



Glenn Adams



Plaintiff(Appellant)



and



James
        Anderson, Richard Baird, Michael Budden,
Allison Laing
and
Jim
Blencoe



Defendants(
Respondents)



Jeffrey
Radnoff
,
          for the appellant



Gordon Hills, for the respondent
          Jim Blencoe

Scott A. Rosen, for the respondent
          Allison Laing



Heard: March 23, 2011



On appeal from the judgment of Justice D.A. Wilson of the
          Superior Court of Justice dated April 7, 2010, with reasons reported at 2010
          ONSC 1999.



ENDORSEMENT



[1]

The appellant, Glenn Adams, is a former director of
    Wrays Fire Protection Ltd. who completely paid the companys outstanding GST
    and payroll remittances.  He appeals from
    the judgment of Wilson J., dated April 7, 2010, dismissing his claim for
    contribution from the respondents, Allison Laing and Jim
Blencoe
,
    who he alleges were also directors of the company at the time it failed to make
    the remittances.

[2]

The appellants claim was based on provisions of the
Excise Tax Act
, R.S.C. 1985, c. E-15
    (GST) and the
Income Tax Act
, R.S.C.
    1985, c. 1 (payroll remittances), which provide that a director who pays the
    GST or payroll remittances may claim contribution from the other directors who
    were liable for the claims.  In the
    alternative, the appellant claims that Laing and
Blencoe
were unjustly enriched by the payments that he made.

[3]

The trial judge made findings of fact that Blencoe had
    not been a director of the company, and that Laing had resigned as a director
    before the remittances were due.  She
    also found there was no basis for the claim of unjust enrichment.

[4]

The trial judges reasoning has been largely overtaken
    by this courts recent decision in
Danso-Coffey
    v. Ontario
, 2010 ONCA 171.  In
Danso
-Coffey
, this court found that the
    application judge erred by purporting to determine a persons liability as a
    director for retail sales tax remittances, but rather should have applied the
    Ministers determination under the comprehensive statutory tax regime.  Like the
Retail
    Sales Tax Act
, R.S.O. 1990, c. R.31, both the
Excise Tax Act
and the
Income
    Tax Act
have schemes that provide that assessments of tax, subject to being
    varied or vacated under the process within the tax regime, shall be deemed to
    be valid and binding despite any error, defect or omission.  In this case, the trial judge should not have
    embarked on an inquiry as to the actual tax liability of the respondents
Blencoe
and Laing.  Rather, she should have accepted their tax liability as determined under
    the
Excise Tax Act
and
Income Tax Act
regimes.
Blencoes
and Laings liability under the
Excise Tax Act
and the
Income Tax Act
was required to support
    the appellants claim for contribution against each of them. Section 323(8) of
    the
Excise Tax Act
and section
    227.1(7) of the
Income Tax Act
are
    almost identical in providing: A director who satisfies a claim under this
    section is entitled to contribution from the other directors
who were liable
    for the claim
 (emphasis added).

[5]

Ignoring the trial judges analysis and applying the
    approach required by
Danso-Coffey
, we
    would nevertheless dismiss the appeal.

[6]

While the respondent Blencoe did initially receive
    assessments under both tax statutes, the Canada Revenue Agency (CRA)
    subsequently reassessed him as having no liability. Since he had no liability
    for the tax, the appellant has no claim for contribution from him.

[7]

The respondent Laing also initially received
    assessments under both statutes.  She
    provided information to the CRA that she resigned as a director on May 20,
    1992.  The CRA wrote to her on October 1,
    2008, advising her that she had provided sufficient documentation to support
    her position that she was not an active director at the time the original debt
    arose.

[8]

After the hearing of the appeal, Laing brought an
    application to admit fresh evidence. The fresh evidence consists of a letter
    from the CRA dated March 31, 2011. The letter states that the April 9, 1997
    Assessments made against Laing had been issued in error, that the
    correspondence that Laing had sent to the CRA in April, 1997 proved that she
    had not been a director of the company at the time it failed to remit the
    required source deductions and GST, and that as a result the CRA had never
    pursued collection of the assessment issued against her.

[9]

We do not admit the fresh evidence for several reasons.
    First, it is not supported by an affidavit. Second, as Laings counsel advises,
    the letter was a result of representations made to the CRA
after the hearing
    of the appeal.
The hearing of an appeal should be the final step in the
    final determination of all issues. Parties should not expect the opportunity to
    buttress their positions based on how the court responded to the arguments
    advanced at the hearing of the appeal. Here, it was known that the appellant
    would rely on this courts decision in
Danso
-Coffey
;
    Laing had ample opportunity to obtain the letter prior to the hearing of the
    appeal. Third, and most importantly, the March 31, 2011 letter is not a
    reassessment and cannot be expected to affect the result. It adds little to the
    October 1, 2008 letter already in the record.

[10]

The appeal may be determined on the basis of the
    October 1, 2008 letter. Counsel for the appellant does not place any reliance
    on the fact that the letter does not use the word reassessment.  At the hearing of the appeal he accepted the
    letter as a determination of the comprehensive statutory scheme to determine
    tax liability. Consequently, it is unnecessary on this appeal to consider the
    import of the fact that the letter is not a formal reassessment. Counsel argues
    that what is significant is that the letter simply accepts that Laing was not
    an active director.  He submits that
    even a passive director remains liable for remittances not made by the company,
    though the standard for avoiding liability by the exercise of due diligence may
    be different. While the trial judge had to defer to the CRAs determination of
    Laings tax liability and could not determine that tax liability herself, she
    had to construe the CRAs letter to Laing.  She determined that Laing sent the CRA the documentation confirming her
    resignation as director and this was accepted by Revenue Canada and they
    withdrew from their initial position that she was liable for the debt.  On this finding, the appellants claim for
    contribution from Laing fails because it was not established that she was
    liable for the remittances under the tax statutes.

[11]

We see no merit in the appellants claim for unjust
    enrichment.  As neither
Blencoe
nor Laing had any liability for the remittances,
    the appellants payment was of no benefit to them.

[12]

The appeal is dismissed.  Costs in favour of each of the respondents
    are fixed in the amount of $2,500 inclusive of disbursements and applicable
    taxes. In respect of the fresh evidence application, costs in favour of the
    appellant against Laing are fixed in the amount of $750 inclusive of
    disbursements and applicable taxes.

R.P. Armstrong J.A.

R.G. Juriansz J.A.

David Watt J.A.


