The Supreme Court of Canada has set a six-year limitation period on the Canada Customs and Revenue Agency for collecting back-taxes.

The decision, released Thursday, is a source of significant happiness for the taxpayer involved, B.C. resident, Joe Markevich, who has gotten out of paying $770,583 in unpaid taxes.

The court’s decision may be just based on existing law, but due to the intuitively unjust result, the government is bound to change the law so similar results will not occur in the future.

Markevich received a notice of assessment in 1986 for federal and provincial taxes owing to the tune of $234,136. Originally a successful stock promoter, Markevich neglected to pay his taxes between 1980 and 1985. He made no effort to dispute the assessment. Neither did he make any payments.

For the next two years the CCRA did nothing and wrote off the debt. But then in 1998, the CCRA sent another statement, indicating a balance owing of $770,583. Markevich applied to the Federal Court, for a judicial review of the CCRA revived claim, seeking a declaration that it was prohibited from taking any steps to collect his tax debts for 1990 and prior years. The judge dismissed the application.

Markevitch appealed and the Federal Court of Appeal set aside that decision. Instead, it held that based on the Crown Liability and Proceedings Act and B.C. Limitation Act, the CCRA was statute-barred from collecting the Markevich’s federal and provincial tax debt.

The quirk that arose in this case derives from the fact that the Income Tax Act does not have limitation periods within its collection provisions. The SCC ruled that the CLPA limitation provisions should apply equally to both the court and non-court proceedings — such as tax collection proceedings.