MINISTER OF NATIONAL REVENUE Respondent - Applicant v. ANDREI OCTAV MOISE, 2021 FC 452

Date: 20210517 Docket: T-1170-18 Citation: 2021 FC 452 [ENGLISH TRANSLATION] Ottawa, Ontario, May 17, 2021 PRESENT: The Honourable Mr. Justice Bell BETWEEN: MINISTER OF NATIONAL REVENUE Respondent - Applicant -and- ANDREI OCTAV MOISE Moving Party - Respondent JUDGMENT AND REASONS I. Nature of motion [ 1 ] This is a motion to review an authorization ordered by the Honourable Mr. Justice Diner dated June 19, 2018. In response to an ex parte motion, Justice Diner authorized the Minister of National Revenue (the Minister) to proceed forthwith against the respondent– moving party, Andrei Octav Moise (Mr. Moise ), with any or all of the collection measures listed in paragraphs 225.1(1) (

a) to (

g) of the Income Tax Act , R.S.C. 1985, c. 1 (5th Supp .) (the ITA ). Mr. Moise exercised his right under subsection 225.2(8) of the ITA to file a motion seeking to have the ex parte order set aside. II. Relevant facts [ 2 ] On June 7, 2018, the Canada Revenue Agency (CRA) issued notices of reassessment against Mr. Moise for the following taxation years: 2006 to 2011 and 2013 to 2014. On the same day, the CRA also issued notices of reassessment against Paxum Inc. and OA Internet Services Ltd. ( OA ), companies of which Mr.

Moise was the sole shareholder and director. [ 3 ] The affidavits dated June 13, 2018, of Manon Lacas, the auditor who issued the notices, and that dated June 14, 2018, of Julie Papineau, collections officer, alleged the following facts: A . Mr. Moise has lived in Romania since 2014; B . The Superior Court of Quebec, in its decision No. 500-17-075030-125, dismissed Mr. Moise’s challenge of the collection measures undertaken by the Agence du revenu du Québec (ARQ), on the basis that the auditor’s reasons for suspecting that Mr. Moise might dissipate his assets were [ translation ] " “real and substantial” " ; C .

Mr. Moise, as director of the companies Paxum Inc. and OA, transferred approximately $9,000,000 out of Canada between 2006 and 2014. Mr. Moise made several misrepresentations to the auditor, Manon Lacas, during the audit, or simply failed to provide the information requested by her; and D . At the time the collection measures were undertaken, Mr. Moise owned, jointly with his wife, Ileana Herling, in a Royal Bank of Canada (RBC) account, an amount of $32,099.56.

To the CRA’s knowledge, this amount was never seized by the ARQ and could therefore be rapidly transferred out of Canada at any time. [ 4 ] On June 15, 2018, the Minister filed a motion for an authorization to proceed forthwith with the collection of the amounts set out in the notices of reassessment. On June 19, 2018, the Honourable Mr. Justice Diner authorized the Minister to proceed forthwith with collection measures. On June 21, 2018, Julie Papineau sent an administrative seizure to the above-mentioned RBC account. On July 19, 2018, Mr.

Moise filed a notice of motion with this Court challenging Justice Diner’s order. III. Relevant provisions [ 5 ] The relevant provisions are subsections 225.2(2) and 225.2(8) of the ITA . They read as follows: Income Tax Act , R.S.C. 1985, c. 1 (5th Supp .)) Loi de l’impôt sur le revenu , L.R.C. (1985), ch. 1 (5e suppl .)) Authorization to proceed forthwith Recouvrement compromis

225.2(2) Notwithstanding section225.1, where, on ex parte applicationby the Minister, a judge is satisfiedthat there are reasonable grounds tobelieve that the collection of all orany part of an amount assessed inrespect of a taxpayer would bejeopardized by a delay in thecollection of that amount, the judgeshall, on such terms as the judgeconsiders reasonable in thecircumstances, authorize theMinister to take forthwith any of theactions described in paragraphs225.1(1)(

a) to 225.1(1)(

g) withrespect to the amount. 225.2(2)

Malgré l’article 225.1, surrequête ex parte du ministre, le jugesaisi autorise le ministre à prendreimmédiatement des mesures viséesaux alinéas 225.1(1)

a) à

g) à l’égarddu montant d’une cotisation établierelativement à un contribuable, auxconditions qu’il estime raisonnablesdans les circonstances, s’il estconvaincu qu’il existe des motifsraisonnables de croire que l’octroi àce contribuable d’un délai pourpayer le montant compromettrait lerecouvrement de tout ou

partie de cemontant. Review of authorization Révision de l’autorisation 225.2(8) Where a judge of a courthas granted an authorization underthis

section in respect of a taxpayer,the taxpayer may, on 6 clear daysnotice to the Deputy AttorneyGeneral of Canada, apply to a judgeof the court to review theauthorization. 225.2(8) Dans le cas où le juge saisiaccorde l’autorisation visée auprésent

article à l’égard d’uncontribuable, celui-ci peut, aprèsavis de six jours francs au sous-procureur général du Canada,demander à un juge de la cour deréviser l’autorisation. IV. Issues [6] I am of the view that there is only one issue to be resolved by this Court: has Mr. Moise met his initial burden of establishingreasonable grounds to doubt that granting an extension would compromise the Minister’s ability to collect the amounts claimed? V. Positions of the parties A. Moving party–respondent [7] Mr.

Moise submits that the CRA attributed to the three taxpayers, namely, himself, OA and Paxum Inc., extensive income, allegedlyunreported, in connection with the activities of OA and Paxum Inc., resulting from the sale of natural supplements. Mr. Moise submitsthat he, OA and Paxum Inc. never sold these products and that the notices of reassessment are unfounded. Furthermore, the incomeattributed to these taxpayers in the notices of reassessment does not come from one of their sources of income and therefore cannot beconnected to a distribution of dividends or cash.

He also states that this property was already subject to an ARQ mortgage when theMinister obtained the order from Justice Diner and that his wife has an undivided half interest in the property. Mr. Moise also states thatthe building is a family residence that is part of the family patrimony. He submits that the collection measures undertaken with respect tohis family residence would cause serious and irreparable harm. B.

Respondent-applicant [8] The Minister submits with respect to the burden of proof for a person bringing a motion under subsection 225.2(8) of the ITA that thetaxpayer must initially establish that there are reasonable grounds to doubt that the test required by subsection 225.2(2) of the ITA hasnot been met (Canada (National Revenue) v. Reddy, 2008 FC 208 at para. 7). [9] The Minister claims that Mr. Moise, based on the grounds set out in his motion and the explanations provided during his cross-examination, has not met this burden.

The Minister submits that this Court "“lacks jurisdiction to deal with the assessment and is boundby the deeming provisions of subsection 152(8)”" of the ITA (Canada (Minister of National Revenue) v. Thériault-Sabourin, 2003 FCT124 at para. 10). [10] In response to Mr. Moise’s argument that his property was already subject to an ARQ mortgage and that his wife had an undividedhalf interest in this property when Justice Diner authorized the taking of action forthwith against his property, the Minister states that theamount of $32,099.58 that Mr.

Moise held jointly with his wife was not seized by the ARQ in the course of its collection measures. [11] In response to Mr. Moise’s claims that he did not intend to dissipate his assets and does not intend to violate his obligations underthe ITA, the Minister argues that this is not relevant to meeting its burden, because the Court must objectively take into account theeffect or result of the measures taken against the assets (Services M.L. Marengère Inc. (Re), (FC) at para. 72). [12] The Minister notes that Mr.

Moise made statements in his affidavit that conflict with the statements made in an affidavit datedSeptember 18, 2007, in a previous matter based in the United States. The Minister also notes that Mr. Moise is not challenging theessential allegations of the Minister’s motion that led to Justice Diner’s order. He also admitted the following points on cross-

examination: he currently resides in Romania and has resided there since 2014; OA has not had a post office box in Canada for at leastthe past two years; he confirms having signed an affidavit in the context of legal action undertaken in the United States in 2007 and thatthe signed affidavit contained a significant error with respect to the fact of OA’s sales of Vimax products; and he admits to havingtransferred significant amounts abroad from Paxum Inc. to Paxum Bélize. VI.

Analysis [13] When authorization is granted in accordance with subsection 225.2(2) of the ITA, the taxpayer may apply to a judge of the Court toreview the authorization under subsection 225.2(8) of the ITA. When the Court is faced with such an application, the Minister has theultimate burden of justifying the decision, but the taxpayer must first establish reasonable grounds to doubt that the test required bysubsection 225.2(2) has been met (Canada v.

Proulx, 2011 FC 1231 at para. 17 [Proulx]). [14] As explained in Proulx at paragraph 18, the review of the order issued under subsection 225.2(8) of the ITA involves, at least, theapplication of the following two-part test: 1. The applicant has the initial burden of mustering evidence that there are reasonable grounds to doubt that the test required bysubsection 225.2(2) of the ITA has been met; and 2.

The Minister has the ultimate burden of justifying the jeopardy collection order granted on an ex parte basis. [15] The first part of the test applicable to the review set out in subsection 225.2(8) of the ITA involves determining whether Mr. Moisehas succeeded, through affidavits and/or the cross-examination of the Minister’s witnesses, in reasonably demonstrating that the evidenceoriginally submitted to Judge Diner did not meet the test set out in subsection 225.2(2). [16] The evidence that Mr.

Moise filed before this Court includes the two exhibits appended to his affidavit dated November 11, 2019.The first exhibit establishes that he is the sole shareholder and director of Paxum Inc. and OA. The second exhibit contains contracts ofOA’s affiliates. Furthermore, as stated in the Minister’s written submissions, the authorization at issue is to proceed forthwith againstMr. Moise and not against the companies Paxum Inc. and OA. Therefore, that evidence is irrelevant to this dispute. Also, there is noevidence that Mr.

Moise cross-examined the Minister’s witnesses. [17] The Minister presented three affidavits with several appended exhibits, including the transcript of the examination on Mr. Moise’saffidavit that took place on August 5, 2020, including the exhibits consulted during the examination. Among other things, the evidencedemonstrates the following: Mr. Moise is married to Ileana Herling and together they have three minor children. They are undivided co-owners of the only twoimmovable assets remaining to the couple, namely, the residence situated at 72 Champlain Street in Roxboro and a vacant lot inBrossard. Mr.

Moise is the sole shareholder and director of the companies Paxum Inc. and OA. Mr. Moise, in his capacity as director ofPaxum Inc. and OA, transferred approximately $9,000,000 out of the country between 2006 and 2014. Mr. Moise currently lives in Romania. Mr. Moise made inaccurate statements to the auditor Manon Lacas during the audit or simply failed to provide the informationrequested by her. At the time of the collection measures, Mr. Moise and his wife, Ms. Herling, held an amount of $32,099.56 in an RBC bankaccount. [18] Moreover, the evidence shows that Mr.

Moise made statements in his affidavit of November 11, 2019, that contradict statementsmade in a previous affidavit, specifically, the affidavit relating to the matter based in the United States in 2007. [19] Given that there is no evidence before this Court to show that the Minister has failed to meet the test in subsection 225.2(2) of theITA, I am of the view that Mr. Moise has failed to meet his initial burden. In light of this conclusion, there is no need to proceed to thesecond part of the Proulx test. VII.

Conclusion [20] The motion to set aside the order dated June 19, 2018, is dismissed. [21] At the hearing, I asked the parties to try to reach an agreement on the amount of costs. On February 2, 2021, the Minister filed aletter informing the Court that the parties had agreed to costs in the amount of $4,350. Given that the motion to set aside the order datedJune 19, 2018, is dismissed, I award the costs to the respondent-applicant. JUDGMENT THIS COURT’S JUDGMENT is that the motion to set aside the order dated June 19, 2018, is dismissed, and that costs in the amount of$4,350.00 are payable by Mr.

Moise to the respondent-applicant.

“B. Richard Bell” Judge FEDERAL COURT SOLICITORS OF RECORD DOCKET: T-1170-18 STYLE OF CAUSE: MINISTER OF NATIONAL REVENUE v ANDREI OCTAV MOISE PLACE OF HEARING: Montréal, QuEbec DATE OF HEARING: january 28, 2021 reasons for judgment and judgment: BELL j. DATED: maY 17, 2021 APPEARANCES : Louis Sébastien FOR THE Respondent-applicant Bogdan Draghia FOR THE moving party-respondent SOLICITORS OF RECORD : Attorney General of Canada FOR THE respondent–applicant Draghia Avocats FOR THE Moving party-RESPONDENT