It appears Mr Klundert, about whom I wrote previously here, is not having any further luck in his court battles. The CRA reassessed him for unpaid taxes in respect of income he failed to declare and for which he was convicted on evasion charges. His appeal of the related civil reassessments to the Tax Court (Klundert v R, 2013 TCC 208) was dismissed recently because, among other things, the Court found the appeal to be an abuse of process.
Mr Klundert was no more successful in the Federal Court earlier this year. The following excerpt from that case explains the background:
[1] In virtue of a “jeopardy order” obtained ex parte from Madam Justice Tremblay-Lamer in April 1999, the tax authorities collected the sum of $871,291.90 between June 1999 and May 2003, and applied it to amounts owing by Dr. Klundert in virtue of assessments for the 1993 through 1996 taxation years. Liability for taxes owing in those years has not been finally determined. In virtue of criminal charges against Dr. Klundert, his Notices of Objection were put on hold. He has now been convicted and ordered in 2010 by the Ontario Superior Court of Justice to pay a fine of $522,346.73 with respect to the taxation years 1993 through 1997 and in 2011 was ordered to pay a further $101,393.80 pursuant to a conviction for income tax evasion for the years 2000 to 2005. His case before the Tax Court has been reactivated.
[2] Dr. Klundert proposes that the monies collected under the jeopardy order be first applied to his fines arising from his criminal convictions.
[3] While he does not directly attack the jeopardy order, which had been subsequently upheld, he submits that the monies collected in virtue thereof were somehow held in trust and that he now has the right to allocate payment to the fines arising from his criminal convictions. As explained to me, the advantage to him is that if he becomes bankrupt, his civil liability for income tax goes into his estate, but his liability for payment of the fines does not.
The Federal Court was having none of it. It quickly dismissed the idea that Mr Klundert was entitled to dictate how funds seized from him should be allocated to his debts, and it paid scant respect to the notion that the supposed violation of Mr Klundert’s rights under the doctrines in R v Jarvis, 2002 SCC 73, were relevant somehow to the question before the Court.
