Graham J found (citing Raposo) that the taxpayer's guilty plea under s. 239 for failing to report commission income from his real estate business was prima facie proof that he had also been grossly negligent for purposes of s. 163(2) (para. 25). It was not necessary to dispose of the taxpayer's argument that in the other action he had thought he was only pleading guilty to having been negligent, as in this action the Crown had established that the taxpayer had falsified statements of his commission income before providing them to his tax preparer. The taxpayer's appeal was denied in respect of the penalties.
Graham J proceeded to consider various disputed business expenses, and stated (at para. 47):
While it is not always necessary for a taxpayer to have receipts to support his or her expenses, a taxpayer like Mr Harvey who has otherwise been found to lack credibility and whose expenses involve things such as automobiles, cell phones, home offices and meal and entertainment that could also be personal in nature, is going to have difficulty overcoming the Minister's assumptions without such receipts.