Date: 20040129
Docket: A-166-03
Citation: 2004 FCA 47
CORAM: ROTHSTEIN J.A.
SHARLOW J.A.
MALONE J.A.
BETWEEN:
MARIE-CLAUDE BOUCHER
Appellant
and
HER MAJESTY THE QUEEN
Respondent
Heard at Vancouver, British Columbia on January 27, 2004.
Judgment delivered at Vancouver, British Columbia on January 29, 2004.
REASONS FOR JUDGMENT BY: SHARLOW J.A.
CONCURRED IN BY: ROTHSTEIN, MALONE JJ.A.
Date: 20040129
Docket: A-166-03
Citation: 2004 FCA 47
CORAM: ROTHSTEIN J.A.
SHARLOW J.A.
MALONE J.A.
BETWEEN:
MARIE-CLAUDE BOUCHER
Appellant
and
HER MAJESTY THE QUEEN
Respondent
REASONS FOR JUDGMENT
SHARLOW J.A.
[1] This is an appeal of a Tax Court judgment which dismissed the appeal of Marie-Claude Boucher from an assessment of income tax for the 1990 taxation year. The Tax Court judgment is reported as Boucher v. Canada, [2003] 3 C.T.C. 2059, 2003 D.T.C. 314.
[2] I summarize the relevant facts as follows. In 1990, Ms. Boucher worked for a corporation called W.C.I. Wood Conversion Inc., which was owned by her brother-in-law. Evidence presented in the Tax Court established that Ms. Boucher had received payments totalling $213,072 from W.C.I. in 1990. Those payments were reported in a T4A slip. The T4A slip indicated that no amounts had been withheld on account of income tax.
[3] Ms. Boucher did not dispute that she received $213,072 from W.C.I. in 1990. However, in filing her income tax return she reported that amount as dividend income. At that time, it was her position that she was a shareholder of W.C.I. and that the payments she had received were in fact dividends, so that she was entitled to the dividend tax credit, which she claimed in her return.
[4] Ms. Boucher's claim to be a shareholder of W.C.I. was dismissed in 1998 by a judgment of the Ontario Court of Justice. There can no be no doubt that the $213,072 she received from W.C.I. was income from employment, and that she was not entitled to a dividend tax credit. She was assessed on the basis that the income was income from employment.
[5] In the Tax Court, Ms. Boucher testified that during 1990, she was the manager of W.C.I., and that payroll deductions were part of her responsibility. She testified that her actual income from W.C.I. was $414,617, and that she had not only caused the $213,072 to be paid to herself, but she had also caused $201,545 to be withheld on account of tax, so that the $213,072 represented her net, not gross, employment income.
[6] No documentary evidence was submitted to the Tax Court in support of Ms. Boucher's testimony. For reasons that I need not repeat, the Tax Court Judge found Ms. Boucher not to be a credible witness. His negative assessment of her credibility is justified on the record. As she was the only source of evidence that tax had been withheld, the Tax Court Judge found as a fact that no tax had been withheld. The record discloses no error in that finding of fact.
[7] However, it does not follow that this appeal should be dismissed. The difficulty with the judgment under appeal is that Parliament has not given the Tax Court the authority to determine the issue that Ms. Boucher sought to have determined, which was whether or not tax had been withheld at source so that it should be credited against her tax liability.
[8] In my view, Ms. Boucher made the same error as the applicant in Neuhaus v. Canada, [2003] 2 C.T.C. 177, 2003 D.T.C. 5469 (F.C.A.). The following appears in the reasons for judgment of Justice Marc Noël in that case, speaking for the Court (at paragraphs 4-6):
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[4] In this case, the applicant is not seeking to have the disputed assessments vacated or varied. Rather, she is claiming that the taxes as assessed by the Minister have already been paid by way of a deduction at source (see subsection 227(9.4), which inter alia makes the employer liable for the taxes owing by an employee up to and including the amounts deducted from the salary and not remitted). In these circumstances, the judge below rightly held that she did not have jurisdiction and it was therefore wrong for her to consider the dispute on its merits.
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[5] The problem raised by the applicant is a collection problem. In this regard, section 222 assigns jurisdiction to the Federal Court in these words:
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All taxes, interest, penalties, costs and other amounts payable under this Act are debts due to Her Majesty and recoverable as such in the Federal Court ...
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Tous les impôts, intérêts, pénalités, frais et autres montants payables en vertu de la présente loi sont des dettes envers Sa Majesté et recouvrables comme telles devant la Cour fédérale [...]
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[6] Insofar as the applicant claims to have already paid the taxes being claimed from her, she may assert her rights in the Federal Court when the Minister attempts to recover the sums he considers payable. We wish to emphasize that in Suermont v. The Queen, recently decided by this Court (2001 D.T.C. 5389), the issue of jurisdiction had not been raised.
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[9] Ms. Boucher cannot be faulted for proceeding as she did. There are contradictory decisions in the Tax Court on this very point. Ms. Boucher pointed out that in Suermondt v. Canada, 2001 D.T.C. 5389 (F.C.A.), this Court implicitly accepted that the Tax Court had jurisdiction in cases such as this. However, in the later Neuhaus case (quoted above), this Court indicated that the question of jurisdiction was not raised in Suermondt. The obvious implication is that if the question of jurisdiction had been raised in Suermondt, the result in that case would have been different.
[10] In oral argument, Ms. Boucher explained to this Court that she had at first attempted to raise this issue by commencing a proceeding in the Federal Court, but her documentation was rejected on the basis that the issue was one for the Tax Court. If that is what happened, it is unfortunate indeed. However, it does not alter the fact that Parliament has not empowered the Tax Court to determine a dispute as to whether or not tax has been withheld at source from particular payments.
[11] The only possible remedy is to allow this appeal, set aside the judgment of the Tax Court and replace it with a judgment quashing the Tax Court appeal. In the circumstances, Ms. Boucher should be entitled to her costs in this Court and in the Tax Court.
(Sgd.) "Karen R. Sharlow"
J.A.
"I agree"
(Sgd.) "Marshall E. Rothstein"
J.A.
"I agree"
(Sgd.) "B. Malone"
J.A.
FEDERAL COURT OF APPEAL
NAMES OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: A-166-03
Appeal of a Judgment of a Tax Court proceeding of the Honourable Judge Gordon Teskey dated February 27th, 2003 in Court file number 2000-4106(IT)G
STYLE OF CAUSE: Marie-Claude Boucher v. HMQ
PLACE OF HEARING: Vancouver, BC
DATE OF HEARING: January 27, 2004
REASONS FOR JUDGMENT: Sharlow, JA
CONCURRED IN BY: Rothstein, JA Malone, JA
DATED: January 29, 2004
APPEARANCES:
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Ms. Marie-Claude Boucher,
Self-Represented
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FOR THE APPELLANT
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Mr. Michael Taylor,
Department of Justice
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FOR THE RESPONDENT
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SOLICITORS OF RECORD:
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Ms. Marie-Claude Boucher (Self-Represented)
Cobble Hill, BC
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FOR THE APPELLANT
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Mr. Morris Rosenberg
Deputy Attorney General of Canada
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FOR THE RESPONDENT
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