John Sorenson, in “Jeopardy Order Overturned” Canadian Tax Highlights 24:2 (February 2016), discusses Canada (National Revenue) v Grenon, 2015 FC 1050. In this case, the taxpayer applied to the court to overturn a jeopardy collection order made under section 225.2 of the Income Tax Act (Canada). Sorenson notes three key points discussed in the case:
- The Minister need only show reasonable grounds to believe that a stay would jeopardize the collection of some or all of the debt. This is a lesser onus than is typically applicable in civil proceedings (the balance of probabilities).
- The initial application for the order is made ex parte. Accordingly, the Crown “must apply to the FC in good faith and make full and frank disclosure that is reasonable in the circumstances.” The Crown must present all relevant facts to the court, provide all relevant case law and set out foreseeable weaknesses in the Crown’s case.
- A taxpayer may apply to the Federal Court to have a jeopardy order overturned. The case law is unsettled regarding the onus on the Crown in such an application. In Grenon, the court concluded that “the relevant provisions do not support a higher onus on the minister on review and that a higher onus should be established by statute rather than by judicial innovation.”
