Efforts made prior to issuance of compliance order could not be considered efforts made to comply

Compliance audit was conducted by Canada Revenue Agency of taxpayer’s 2009, 2010 and 2011 taxation years. Compliance order was issued ordering taxpayer to provide information and documents sought by Minister of National Revenue under s. 231.2(1) of Income Tax Act. Taxpayer was present at hearing of compliance order application and agreed to terms of order sought by Minister. Minister brought motion for order finding taxpayer in contempt of court for failing to comply with compliance order. Motion granted and taxpayer was to comply with compliance order within 30 days. Compliance order stated clearly and unequivocally what taxpayer need to do and it was clear that taxpayer had actual knowledge of compliance order at all relevant times. It was fact that taxpayer had not provided information and records specifically ordered by compliance order, except with respect to one bank account which were provided just before show-cause hearing, which was more than 6 months after expiry of compliance order’s 45-day compliance period. Two short emails to Minister’s counsel in intervening 9 months between issuance of compliance order and original show-cause hearing date fell well short of clear and unequivocal effort to comply with compliance order. Efforts made prior to issuance to compliance order could not be considered efforts made to comply as compliance order did not exist. Contempt was serious and taxpayer had failed to provide “reasonable excuse” for non-compliance. There were some mitigating factors as taxpayer did apologize, participate in contempt proceedings and provide some of information and documents sought under request for information. Circumstances of case required taxpayer to pay fine of $2,000 and to pay Minister’s costs in amount fixed at $3,500 within 30 days.

Canada (National Revenue) v. Chi (2018), 2018 CarswellNat 5323, 2018 CarswellNat 5324, 2018 FC 897, 2018 CF 897, René LeBlanc J. (F.C.).