The taxpayer was assessed under s. 215(6) for failure to withhold and remit Part XIII tax on rents paid by it in its 2011 to 2016 taxation years to its lessor, Ms. Trimarchi, who lived in Italy (and who had acquired the leased property before the years in issue from some apparently-resident siblings). St-Hilaire J quoted with approval (at para. 38) the statement in J.K. Read that:
Subsection 215(6) of the Act is a charging provision that makes the payer liable for the payee's tax if the payer fails to deduct or withhold at the time of payment tax that is payable by the payee. In contrast, subsection 227(8) of the Act is a penalty provision. A due diligence defence can be mounted against the latter but not the former.
St-Hilaire J further added (at para. 42):
[W]hen the legislator wants to limit a resident’s liability to circumstances where they have knowledge or belief, it expressly does so.
Although the taxpayer was able to point to some minor indicators suggestive of Canadian residence of Ms. Trimarchi (e.g., a Canadian bank account to receive the rent payments, a Canadian SIN, and a Montreal address shown on some documents), the preponderance of the evidence (presented by the Crown, even though the onus was not on it) suggested that Ms. Trimarchi was a non-resident.
The assessments under ss. 215(6) (and 227(8)) were confirmed.