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Citation: 2004TCC371
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Date: 20040514
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Docket: 2003-1383(IT)I
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BETWEEN:
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JACQUES BEAUCHAMP,
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Appellant,
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and
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HER MAJESTY THE QUEEN,
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Respondent.
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[OFFICIAL ENGLISH
TRANSLATION]
REASONS FOR JUDGMENT
Tardif J.
[1] This is an appeal related to the
1998 taxation year. The Appellant presented his appeal as follows:
[TRANSLATION]
In a letter dated
March 15, 1999, André Pruneault C.A. informed us that the
investment of $20,000 in 2759063 Canada Inc. could be claimed as
small business investment loss at 75% of the amount lost.
Château Cornwall:
A verbal agreement was
reached on July 16, 1999, for the 1993‑94 95 and
1998 files for the amount of $8,000. The amount was paid, but
Revenue Canada did not keep its end of the agreement.
[2] In her response, the Respondent asserted that
the assessment had been based on an assumption of the following facts:
[TRANSLATION]
CHÂTEAU CORNWALL
(a) Château Cornwall Limited Partnership
is a limited partnership (hereinafter referred to as the "limited
partnership");
(b) The
limited partnership was created under an agreement dated
April 15, 1988, and modified on December 1, 1988;
(c) Château Cornwall General Partner Ltd.
is the general partner (hereinafter referred to as the "general
partner") of the limited partnership and directs the limited partnership;
(d) The
general partner is held fully by Château Cornwall Inc.;
(e) The general
partner and Château Cornwall Inc. are related and therefore do not
deal with one another at arm's length;
(f) The
project of the limited partnership was the acquisition, development and
operation of a seniors' centre (hereinafter referred to as the "real
estate project");
(g) According
to the application forms signed in December 1988:
(i) each
investor was required to subscribe to a minimum of three units of the project
at a purchase price of $150,000;
(ii) each
investor had to pay $40,476 in cash;
(iii) with the
limited partnership, each investor had to sign a mortgage assumption warranty,
prorated to their participation [$109,524 ($36,508 per unit x
3 units)];
(h) The
Appellant bought 3 of the 252 units of the limited partnership;
(i) There
are two mortgage assumption warranty agreements:
(i) a first
agreement dated December 30, 1988:
(A) this
agreement indicated that each of the eighty members was required to sign
the mortgage assumption, prorated to their participation, or $109,524;
(B) this
agreement was between the subscribers and the limited partnership and granted
the general partner the authority to carry out the contents of the agreement at
a later date;
(C) according
to the mortgage assumption warranties, the subscribers (investors) agreed
absolutely and unconditionally to pay, on demand, to the limited partnership or
to anyone authorized by it, the entirety of their interest in the first and
second mortgages [maximum $36,508 per unit ($36,508 x 3 = $109,524)] with
interest and other costs incurred;
(D) the
mortgage assumption warranty should not be executed except upon request by the
limited partnership, in case the latter defaulted on payment;
(ii) a second
agreement dated August 1, 1989:
(A) this
agreement was signed between the subscribers, the Toronto‑Dominion Bank,
the general partner and the limited partnership;
(B) this
agreement relates to a loan not to exceed $9,200,000 ($109,524 x 84 members);
(C) this
loan would be guaranteed, inter alia, by a first mortgage on the property
held by the Toronto‑Dominion Bank;
(D) according
to clause 1 of the agreement, the subscribers (investors) agreed
absolutely and unconditionally to pay the Bank, as a primary debtor and not as
surety, the principal assumed and the interest and other costs incurred; this
obligation was limited to an amount of $36,508 per unit;
(E) according
to paragraphs 7, 8, 9, 10 of this agreement, the Bank retained the right
to sue the limited partnership as primary creditor according to the loan
agreement;
(F) the
total cost of the project would therefore be financed as follows:
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Cash contribution
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$ 3,400,000
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1st
mortgage with Toronto‑Dominion Bank
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$ 4,000,000
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Loans from the
proponent
($1.7M+$3.5M)
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$ 5,200,000
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TOTAL
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$12,600,000
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(j) On or
about July 1996, the Toronto‑Dominion Bank contacted the
investors to make the payments provided for in the loan contracts;
(k) After this
request, the subscribers (investors) did not make any payments to the Toronto‑Dominion Bank;
(l) In
accordance with the terms of the application form of December 1988, the
Appellant committed to purchasing an amount of $109,524 in the limited
partnership through a mortgage assumption in the amount of $109,524;
(m) However, the
Appellant's mortgage assumption with the Bank was limited to $52,857;
(n) The
Appellant owed an amount of $56,667 to the limited partnership;
(o) The
Appellant mentioned to the Minister's representative that he had invested an
additional $10,000 through his credit line with the Caisse populaire;
(p) At no time
was the Appellant able to prove that he invested this additional amount in the
limited partnership;
(q) The
Minister granted the Appellant the following amounts as net losses from the
limited partnership for 1988 to 1995, related to the Château Cornwall Limited Partnership:
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Year
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(Net losses from
the limited partnership in $)
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1988
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( 3,384)
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1989
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( 5,088)
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1990
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(16,869)
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1991
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(33,189)
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1992
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(26,727)
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1993
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(11,499)
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1994
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( 9,012)
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1995
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( 2,052)
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(r) As a
function of the foregoing, the Minister decreased the balance of the at‑risk
amount of the Appellant's interest in the limited partnership by the assumed
but unpaid mortgage balance in the amount of $56,667 for the 1996 taxation year
(see Appendix II attached to this Reply);
(s) The
balance of the at‑risk amount of the Appellant's interest in the limited
partnership was therefore reduced to zero for 1996;
(t) Since the
at‑risk amount of the Appellant's interest in the limited partnership was
reduced to zero, the Appellant cannot claim losses related to his investment in
the limited partnership for the 1996 taxation year;
(u) At the
objections phase, the Appellant presented documentation proving investments of
$1,500 for the 1996 taxation year and $2,000 for the 1997 taxation
year;
(v) The
Minister therefore granted additional amounts of $1,500 in 1996 and $2,000 in
1997 as net losses from the limited partnership;
(w) At no time
was the Appellant able to prove that he invested additional amounts in the
limited partnership, other than those already considered by the Minister for
the 1988 to 1997 taxation years;
(x) In light of
the foregoing, the Minister refused to deduct the amount of
$13,308 claimed by the Appellant as a net loss from the limited
partnership for the 1996 taxation year;
(y) The Appellant
is not challenging the amount of $12,668 he claimed, that was refused by the
Minister, for his 1997 taxation year as a net loss from the limited
partnership;
(z) Furthermore,
a decision was made on May 7, 2003, by the Honourable Justice
François Angers, in JACQUES BEAUCHAMP – CASE: 2001‑4537(IT)I for
taxation years 1996 and 1997 refusing the amount of $13,308 as a net loss
from the limited partnership for the 1996 taxation year for the following
reasons:
[TRANSLATION]
The Appellant only succeeded in
establishing that his payment of $10,000, made in 1996, went to reimburse the
debt of the limited partnership for which he had a guarantee with the
Caisse populaire de Notre‑Dame‑du‑Chemin in
1994. According to the evidence presented, it is therefore more likely that he
received a credit for this amount in 1994. Justice Angers cites: I cannot
therefore conclude that the Appellant invested an additional amount of $10,000
in 1996 in the limited partnership. The Minister therefore correctly calculate
the at‑risk portion of the Appellant's interest in the said company for
the 1996 taxation year and thus was right to refuse the amount of $13,308
claimed by the Appellant as a net loss for the same taxation year. The appeal
is therefore dismissed and the decision of the Minister is confirmed.
[3] All these facts were subject to a general
admission by Counsel for the Appellant.
[4] The facts assumed by the Respondent and not
admitted by the Appellant are as follows:
[TRANSLATION]
(aa) At no time was the Appellant able to prove that he invested
additional amounts in the limited partnership for the 1998 taxation year;
(bb) As a function of
the foregoing, the Minister decreased the balance of the at‑risk amount
of the Appellant's interest in the limited partnership by the assumed but
unpaid mortgage balance in the amount of $56,667 for the 1998 taxation
year (see Appendix II attached to this Reply);
(cc) The
balance of the at-risk amount of the Appellant's interest in the limited
partnership was therefore reduced to zero for 1998;
(dd) Since
the at-risk amount of the Appellant's interest in the limited partnership was
reduced to zero, the Appellant cannot claim losses related to his investment in
the limited partnership for the 1998 taxation year;
BUSINESS INVESTMENT LOSS
(ee) In his income tax return for the 1998 taxation year, the
Appellant claimed a deductible business investment loss of $15,000
($20,000 x 75%);
(ff) This loss is allegedly the result of:
(i) the assumed disposal, at $0, of the shares in 2759063 Canada Inc.,
these shares having an adjusted cost base (hereinafter referred to as the ACB)
of $100;
(ii) and a debt obligation of 2759063 Canada Inc., for
which the ACB is $19,900;
after this company ceased operation;
(gg) 2759063 Canada Inc. was not a company operating a small
business because the assets of this company were used to earn investment
income; the company's only assets were the shares in and loans of money to
Château Cornwall Inc.;
(hh) Château Cornwall Inc. was not a company operating a
small business since all or substantially all of the fair market value of its
assets were not used to earn business income;
(ii) The assets of Château Cornwall Inc. were also used to
earn investment income since its assets were used to lend funds to Château Cornwall Limited Partnership
and this limited partnership was not a company operating a small business. It
was in fact a group of individuals who invested funds in order to achieve a
common goal;
(jj) The Appellant cannot claim the $15,000 ($20,000 x 75%) as a
deductible business investment loss for his 1998 taxation year;
(kk) Therefore the Minister granted this amount of $15,000
($20,000 x 75%) as a net capital loss for the 1998 taxation year.
[5] In support of his appeal, the Appellant
essentially advanced two arguments. He first claimed that the Respondent,
through Yolaine Couturier, and her representative, a Quebec tax
expert by the name of André Côté, concluded a transaction within the
meaning of article 2631 of the Civil Code of Québec
(C.C.Q.).
[6] The Appellant affirmed that he had spoken with
Ms. Couturier and had himself concluded that an agreement had been
reached. According to the Appellant, the agreement involved the payment of
$8,000, in eight cheques of $1,000 each, as full and final settlement of
the tax debt.
[7] To support these claims, he submitted
Exhibits A‑1 and A‑2, the texts of which are reproduced here:
[TRANSLATION]
Exhibit A‑1
Forestville,
July 16, 1999
Revenue Canada
2251 boul. de la
Centrale
Jonquière, Quebec
G7S 5J1
To Whom It May Concern:
Following the telephone
conversation between my accountant, Mr. André Côté, and
Ms. Yolaine Couturier of the Québec office, I am sending you
eight (8) cheques of one thousand (1,000) dollars as a result of the
agreement reached on July 16, 1999.
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Balance due:
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$13,649.38
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Amendment for 1998:
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$6,000.00
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Balance:
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$7,649.38
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I trust this is
satisfactory.
Sincerely,
Jacques Beauchamp
9-8th Avenue.
P.O. Box 116
Forestville, Quebec
G0T 1E0
[TRANSLATION]
Exhibit A‑2
Forestville,
December 27, 2001
Canada Customs and
Revenue Agency
Jonquière Tax Centre
2251 boul.
René Lévesque
Jonquière, Quebec
G7S 5J1
To Whom It May Concern:
Enclosed are the T5013s
from 1998 that were not included with my 1998 return. Please make the
necessary corrections. Thank you.
Jacques Beauchamp
9-8th Avenue
Forestville, Quebec
G0T 1E0
[8] He also made a second argument that he had lost
$20,000 after investing in 2759063 Canada Inc., and thus declared a
business investment loss.
[9] These are the Appellant's only arguments. He
did not have the testimony of the tax expert whose services he had retained and
who had spoken with Ms. Couturier.
[10] During the cross examination of
Ms. Couturier, the Appellant primarily tried to elicit her admission that
an agreement had been reached for the settlement of the assessment.
[11] Ms. Couturier explained her duties at the
time and remembered having had at least one telephone call with the Appellant
and one with his Agent. At the time, in July 1999, she was an information
officer. In that capacity, she answered the telephone and gave information to
taxpayers regarding their files.
[12] She was also authorized to make payment
agreements. At the beginning, this was for small amounts. At the time of the
telephone conversations with the Appellant and his Agent, she had the power to
make payment agreements in the cases of files for which the tax debt was
between $3,000 and $50,000. In such cases, the payment period could not exceed
eight months.
[13] In this case, since this was a file in which the
amount at issue was within allowable limits, she made the payment agreement.
[14] Along with the payment agreement, there was also
the issue of whether an amended return would be filed, so that it could be
analyzed anew, and possibly result in an outcome to the Appellant's advantage;
thus it would have been possible that the payment agreement, depending upon the
results of this analysis, would coincide with full settlement of the tax debt.
[15] Despite many attempts to have Ms. Couturier
recognize that she did indeed reach an agreement with the Appellant or
Agent Côté, or that she could have given the impression that this was a
settlement, she did not admit anything to the effect that an agreement had been
reached or even to the effect that she might have given the impression that
this was the case.
[16] The replies given by Ms. Couturier were
clear and specific and did not leave room for any doubt; she understood the
details and, above all, the limits of her responsibilities with respect to the
files in which she intervened.
[17] Although well within the scope and limits of her
work, she also explained that she did had neither the authorization nor the
skill to analyse and assess the correctness of an assessment nor to make a
decision in this respect. Never having received any documents, she did not
conduct an analysis of any file; furthermore she did not have the authority to
do so.
[18] With respect to the content of the telephone
conversations, both with the Appellant or his Agent, she admitted to having
perhaps said that the possible result of analyzing an amended return may have
an effect on the tax debt, and nothing more. However she did add that she had
nothing to do with the processing of the amended return.
[19] The Appellant relied on article 2163 of the
C.C.Q. for his claim that Ms. Couturier, as a result of her attitude and
behaviour, made the Respondent liable such that the tax debt was extinguished.
Article 2163 of the C.C.Q. reads as follows:
2163. A person who has
allowed it to be believed that a person was his mandatary is liable, as if he
were his mandatary, to the third person who has contracted in good faith with
the latter, unless, in circumstances in which the error was foreseeable, he has
taken appropriate measures to prevent it.
[20] To dispose of the Appellant's argument, it seems
useful to me to recall some portions of relevant decisions.
[21] The Appellant wanted to benefit from the
doctrine of estoppel in pais of certain persons in authority; this
doctrine has been thoroughly handled by the courts. In other words, can the
doctrine of estoppel be applied in this case?
I do not propose to
consider this aspect of the case any further, because, in any event, I am in
agreement with the concurrent findings of the Courts below that no estoppel was
proved. The appellants adopted, in argument, the legal principles stated
in Greenwood v. Martins Bank [[1933] A.C. 51.], at p. 57:
The
essential factors giving rise to an estoppel are I think:
(1) A representation
or conduct amounting to a representation intended to induce a course of
conduct on the part of the person to whom the representation is made.
(2) An act or
omission resulting from the representation, whether actual or by conduct, by
the person to whom the representation is made.
(3) Detriment to
such person as a consequence of the act or omission.
(Emphasis added)
[23] In light of this decision, it appears that
intention is an extremely important dimension in the application of the
doctrine of estoppel in pais. In other words, intention to induce a
course of conduct is a basis of the doctrine of estoppel by representation.
[24] In this case, there was neither direct nor any
secondary evidence of intent. Furthermore, this dimension is completely absent
from the evidence.
[25] The courts have also ruled on several occasions that an
error in law cannot bind the Crown. In Guerriero v. Canada IN THE MATTER OF The Unemployment Insurance Act,
1971 [1987] T.C.J. No. 821, the Honourable Justice Miller of this Court dismissed the taxpayer's appeal because
the taxpayer did not discharge the burden of proof and because an error in law
cannot bind the Crown. Miller J. referred to the following passage from Blackmore:
In Blackmore
versus M.N.R., NR 519, the learned judge in dealing with this same
issue stated:
"Legally I am
bound to say that notwithstanding any mistake or error or wrong advice on the
part of the personnel of the Commission, the Commission is not prevented from
seeking to carry out the provisions of the Unemployment Insurance Act,
1971. This has been held repeatedly by umpires in the past. There is the
well-established principle that an estoppel will not arise when the conditions
of the statute are not met. Put tritely, estoppel does not lie against the
Crown and further estoppels of all kinds are subject to the general rule that
they cannot override the law of the land."
[26] The Honourable
Justice Cattanach, in Stickel v. M.N.R.,
[1972] F.C. 672 (Q.L.), provides a correct summary of the law on the
issue:
70. In short, estoppel is subject to the one
general rule that it cannot
override the law of the land.
[27] In Goldstein v. Canada, [1995] T.C.J. No. 170 (Q.L.), the Honourable Justice Bowman examined the correctness in law of
an interpretation of paragraph 146(1)(c) of the Act and also
responded to the issue of estoppel. This decision by Bowman J. is one
of the major decisions addressing the issue of estoppel with respect to tax
matters. Bowman J. said the following:
Estoppel is no
longer merely a rule of evidence. It is a rule of substantive law.
Lord Denning calls it "a principle of justice and of equity."
It is sometimes said
that estoppel does not lie against the Crown. The statement is not accurate
and seems to stem from a misapplication of the term estoppel. The principle of
estoppel binds the Crown, as do other principles of law. Estoppel in pais,
as it applies to the Crown, involves representations of fact made by officials
of the Crown and relied and acted on by the subject to his or her detriment.
The doctrine has no application where a particular interpretation of a statute
has been communicated to a subject by an official of the government, relied
upon by that subject to his or her detriment and then withdrawn or changed by
the government. In such a case a taxpayer sometimes seeks to invoke the
doctrine of estoppel. It is inappropriate to do so not because such
representations give rise to an estoppel that does not bind the Crown, but
rather, because no estoppel can arise where such representations are not in accordance
with the law. Although estoppel is now a principle of substantive law it had
its origins in the law of evidence and as such relates to representations of
fact. It has no role to play where questions of interpretation of the law
are involved, because estoppels cannot override the law.
The question of the
interpretation of paragraph 146(1)(c) is a matter of law and I must
decide it in accordance with the law as I understand it. I cannot avoid that
obligation because the Department of National Revenue may previously have
adopted an interpretation different from that which it now propounds. The
question is not whether the Crown is bound by an earlier interpretation upon
which a taxpayer has relied. It is more to the point to say that the courts, who
have an obligation to decide cases in accordance with the law, are not bound by
representations, opinions or admissions on the law expressed or made by the
parties.
[28] In Hawkes v. Canada, [1995] T.C.J. No. 1507
(Q.L.), Margeson J. cites a passage from Phipson On Evidence which
reads as follows: "Estoppels of all kinds, however, are subject to one
general rule: they cannot override the law of the land. Thus, where a
particular formality is required by statute, no estoppel will cure the
defect."
[29] In Holitzki v. Canada, [1998] T.C.J. No. 1146, at
paragraph 7 (Q.L.), Rowe J. explained that "[t]he law is clear
that stoppel will not lie to override a statutory provision; in this case the Income
Tax Act."
[30] Associate Chief Justice Bowman, in Moulton v. Canada,
[2002] T.C.J. No. 80, at paragraph 11 (Q.L.) recently
stated:
The appellant argues
with great conviction that he should be entitled to rely on advice given by the
CCRA and relied upon by him in good faith. I agree that the result may seem a
little shocking to taxpayers who seek guidance from government officials whom
they expect to be able to give correct advice. Unfortunately such officials are
not infallible and the court cannot be bound by erroneous departmental
interpretations. Any other conclusion would lead to inconsistency and
confusion.
[31] Since this case was
heard in Quebec, it is important to mention Alameda Holdings Inc. v. Canada, [1999] T.C.J. No. 839
(Q.L.) and Houde v. Canada,
[2001] T.C.J. No. 130 (Q.L.). These decisions reveal that the
doctrine of estoppel in pais cannot be applied in cases heard before
courts in the province of Quebec. Moreover, in Quebec, fin de non‑recevoir
has essentially the same effect as does estoppel in pais, but relies
on article 1457 of the C.C.Q. At paragraph 70 of Alameda Holdings Inc.,
supra, the Honourable Justice Dussault said the following with
respect to this issue:
Counsel for the
appellant pleaded the doctrine of estoppel and that of fins de non‑recevoir.
According to counsel, the characteristics and conditions of application of
these two institutions are similar, and so should be their effects.
This is an over‑simplification in my view. I believe that the
doctrine of estoppel cannot be pleaded in the instant case and that it is the
Civil Code of Quebec that applies. In Soucisse, supra, Beetz J. of
the Supreme Court of Canada distinguishes between the two concepts, while
recognizing that there has often been confusion between the two and that both
terms are used. He refers in particular to Mignault J.'s opinion in Grace
and Company, supra, that the concept of estoppel, as applied in the English
system, is unknown to the civil law. However, he expressly acknowledges the
existence of fins de non-recevoir in civil law and recognizes that one possible
legal basis for a fin de non-recevoir might be the wrongful conduct of a party
under articles 1053 et seq. of the Civil Code of Lower Canada
(articles 1457 et seq. of the Civil Code of Quebec).
[32] Since the doctrine of estoppel cannot be applied
to cases from Quebec, this file must be reviewed in light of article 1457
of the C.C.Q., which reads as follows:
1457. Every
person has a duty to abide by the rules of conduct which lie upon him,
according to the circumstances, usage or law, so as not to cause injury to
another.
Where he is endowed
with reason and fails in this duty, he is responsible for any injury he causes
to another person by such fault and is liable to reparation for the injury,
whether it be bodily, moral or material in nature.
He
is also liable, in certain cases, to reparation for injury caused to another by
the act or fault of another person or by the act of things in his custody.
[33] The testimony and
cross-examination of Ms. Couturier does not permit the conclusion that
there was any wrongful or even negligent conduct on her part; on the contrary,
the evidence has clearly established that she was fully aware of the parameters
of her responsibility and that she in no way exceeded her powers or in fact
gave such an impression.
[34] With respect to the second argument, the
Appellant neither explained nor justified his claims to the effect that he had
the right to a deductible business investment loss of $20,000.
[35] On this issue, the Respondent had auditor
Claude Goulet testify. He explained that the loss declared by the
Appellant was not eligible since the amount had not been invested in a company
operating a small business, since the assets of the company that benefited from
the Appellant's $20,000 investment was used essentially to earn investment
income. Furthermore, the evidence demonstrated that the assets of
2759063 Canada Inc. were shares in and loans to
Château Cornwall Inc.
[36] The only projected income was property income,
or, more specifically, the interest on the loan or loans.
Analysis
[37] An income tax assessment is assumed to be
correct. When there is an appeal, the taxpayer challenging the correctness
assumes the burden of proof required to invalidate or modify it.
The transaction argument
[38] Article 2631 of the Civil Code of Québec
reads as follows:
2631. Transaction is a
contract by which the parties prevent a future contestation, put an end to a
lawsuit or settle difficulties arising in the execution of a judgment, by way
of mutual concessions or reservations.
[39] Showing there has been a transaction is more
than an issue of perception; there must be reliable evidence that makes it
possible to draw reasonable conclusions. Otherwise, it would suffice simply to
claim that there has been a transaction to relieve oneself of the evidentiary
obligation.
[40] Certain factors are required for a transaction
to have taken place. First, the parties in a transaction must have the
requisite authority and competency. There must be a clearly defined and
specified purpose, failing which it is not a transaction, but a negotiation.
[41] The settlement amount, the payment method and
the payment guarantee are also equally essential factors. In this case, the
Appellant wanted the Court to disregard the written document he himself had
prepared and which, by its very words, contradicts his claims; in fact, the
amount is unclear, and on the other hand the written document anticipates an
outcome (the result of an analysis of an amended return) which is also
uncertain.
[42] Ms. Couturier, an intelligent and
articulate individual, is fully aware of the scope and limits of her work; it
would have been very surprising if she had given instructions of the nature
alleged by the Appellant.
[43] Although the difference between a payment agreement
and a settlement in the sense of a transaction may seem slight,
Ms. Couturier well understood the difference between the two scenarios;
furthermore, she submitted a relevant example that leaves no doubt with respect
to her ability to make the distinction. Her clear and precise testimony is
consistent on every point with the written document signed by the Appellant
(Exhibit A‑1) and reproduced above.
[44] Did it not mention the balance due of
$13,649.38? Did it not mention the amendment for 1998 and, finally, a balance
due of $7,649.38?
[45] This written document signed by the Appellant
confirms every point made by Ms. Couturier to the effect that the results
of the amended return could possibly mean that the tax debt would be
practically extinguished.
[46] It follows from the review and analysis of the
modified return that the Canada Customs and Revenue Agency
did not accept the Appellant's interpretation. As a result, the anticipated
credit of $6,000 was never granted and the tax debt remained the same, namely
$13,649.38 in July 1999.
[47] The $8,000 paid by eight cheques of $1,000 each
was therefore, and with reason, handled as a deposit on the amount of taxes
due, which is consistent with the explanations given by Ms. Couturier and
the written document signed by the Appellant himself.
[48] With respect to the business investment loss of
$20,000 declared by the Appellant, he did not submit any evidence to justify
it. The Respondent explained why the loss had been refused as a business
investment loss and accepted as a net capital loss for the 1998 taxation year.
[49] In this respect, the testimony of
Claude Goulet was determinative; he indicated that he analyzed the file
and noted, without any difficulty, that the company that received the $20,000
investment from the Appellant did not meet the requirements in order to be
considered a company operating a small business.
[50] The auditor, in fact, noted that the company
involved used its assets not to earn business income but essentially to receive
income generated by property.
[51] These are the only two elements of evidence
brought forward by the Appellant who was required to show that the assessment,
which benefits from the presumption of validity, was not correct in law. After
analysis of the evidence submitted, I conclude that the Appellant did not show
the correctness of his claims with respect to the contested assessment.
[52] Therefore the appeal is dismissed, the whole
without costs.
Signed at
Ottawa, Canada, this 14th day of May 2004.
Tardif J.
Translation certified true
on this 28th day
of September 2004.
Shulamit Day, Translator
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