Citation: 2010 TCC 516
Date: 20101013
Docket: 2009-1899(EI)
BETWEEN:
ROSE LAURENCELLE,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
[OFFICIAL ENGLISH
TRANSLATION]
REASOSN FOR JUDGMENT
Tardif J.
[1]
This is an appeal
respecting the work performed by the appellant, Rose Laurencelle, on
behalf and to the benefit of 2165‑3506 Québec Inc. during the periods
from June 4, 2007, to November 2, 2007, and from June 9, 2008, to
September 12, 2008.
[2]
After having been sworn,
the appellant admitted the following facts: (Reply to the Notice of Appeal – admitted
facts)
[Translation]
(a) the payor was incorporated on February 1,1984; (admitted)
(b) Marie-Christine Perron is the Payor’s only shareholder; (admitted)
(c) the appellant is registered as a director in the CIDREQ system of
the Registre des entreprises; (admitted)
(d) the appellant is the mother of Marie-Christine Perron; (admitted)
(e) on May 27, 1999, Marie-Christine Perron registered a business as a
sole proprietorship as Club Kergus Inc.; (admitted)
(f)
Club Kergus provides outfitting services for
hunting and fishing; (admitted)
(g) Marie-Christine Perron was 23 years old when she purchased the
business worth $260,000. She obtained the necessary funding as follows:
|
$75,000
|
grant for young Aboriginal entrepreneurs
|
|
$100,000
|
amount from the Caisse Populaire Sault au Mouton
|
|
$70,000
|
mortgage taken out by the appellant on her residence and that of
her husband, Donald Perron
|
|
$15,000
|
Loan from Entreprise forestière Donald Perron, her father;
|
(admitted)
(h) on February 9, 2000, a notarized power of attorney between Marie‑Christine
Perron and the appellant granted full power to manage and deal with all
property of Marie-Christine Perron, including her business operated as Club
Kergus Inc. (admitted)
(i) on January 30, 2002, the payor continued to
operate Club Kergus as Pourvoirie Club Kergus; (admitted)
(j) in fall 2004, Marie-Christine Perron obtained a grant from Canada
Economic
Development to build a lodge on the outfitting site; she
completes the funding
with a loan from Fonds d’investissement pour
l’entrepreneurship au féminin;
(admitted)
(k) the construction of the lodge was completed in
summer 2006 and the first
clients arrived for the 2007 season; (admitted)
(l) the payor offers hunting and fishing services (American
plan, European plan,
and family plan) on land that includes 21 lakes of which 16 are used
for brook trout fishing purposes. Services include, upon request, American,
European or family plan; (admitted)
(m) the payor must maintain 10 kilometres of forest
service roads; (admitted)
(n) the payor’s property includes a lodging site with 14
rooms, 9 cottages,
2 garages, a number of hunting blinds, a pick-up truck, a
Timberjack for the maintenance of forest service roads, 4 all-terrain vehicles,
a ten-wheel truck, 40 chaloupes, a few kayaks and pedal boats; (admitted)
(o) the payor’s main activities take place from May to
October; (admitted)
(p) the appellant stated that her duties included
welcoming customers, cooking,
cleaning the cottages and the lodge, bookkeeping, reservations confirmations,
billing, signing cheques, making bank deposits, collecting payable fees, weighing
the fish and overseeing fuel activities; (admitted)
(q) the appellant participates with her husband and Marie-Christine
Perron,
when she is available, in 4 hunting and fishing shows between
December and April; (admitted)
(r) all expenses related to the shows are overseen by
the payor; (admitted)
(s) the payor’s advertising and Internet site refer to the appellant
as the contact
person throughout the year by providing her personal address as well
as her telephone number; (admitted)
(t) the appellant remained at the outfitter’s lodge during
the periods in issue 6 days a week and on the 7th day she would go to Longue
Rive for errands, deposits and fuel; (admitted)
(u) according to the payroll journal, the appellant
was paid as follows:
2007: $416 per week for 50 hours
2008: $468 per week but the hours are not entered; (admitted)
(v) the payor’s business hours are from 6:30 a.m. to
10 a.m., that is, 15.5 hours
per day or 108.5 per week, from Monday to Sunday during the main
operating season; (admitted)
(w) there were no entries for the appellant in the
payroll journal when she would
go to the various shows in which the payor participated;
(admitted)
(y) the notarized power of attorney signed on February 9, 2000, is
still in force;
(admitted)
(z) the power of attorney gives the appellant total management and
administrative control over all of the payor’s operations,
including the power
to sell, acquire, trade, approve and use share funds and
any other
security the appellant deems appropriate; (admitted)
(aa) paragraph 2.2 of said power of attorney gives the
appellant the power to
attend and vote at all meetings as a shareholder or in any other
capacity; (admitted)
(bb) the power of attorney confirms that Marie-Christine Perron assigned
all of
her property rights, including the outfitter, as well as all of her
rights as a shareholder without any obligation or restriction on the principal,
Marie-Christine Perron; (admitted)
(cc) all powers given to the appellant by the power of
attorney of
February 9, 2000, actually represent all property rights involving
specifically Pourvoirie Club Kergus as well as property rights involving share
funds or any other security held by Marie‑Christine Perron. (admitted)
The only facts denied are as follows:
(x) the hours paid do not correspond with the hours actually worked
by the
appellant; (denied)
(dd) the appellant was the directing mind of the
payor’s corporation. (denied)
[3]
The basis on which
rests the determination under appeal is a notarized power of attorney, a copy
of which was filed as Exhibit I‑1.
[4]
The content of the notarized
power of attorney clearly demonstrates the breadth of the powers held by the appellant.
In fact, the power of attorney conferred on the appellant all the rights and
powers conferred by the shares issued by the company and held by her on behalf
of the appellant’s daughter.
[5]
There is no doubt that
the appellant had both de jure and de facto control over all the
rights arising out of all of the shares held on behalf of her daughter, Marie‑Christine
Perron.
[6]
The documentary evidence
therefore established that the basis on which rests the determination, that is,
that the appellant held control over more than 40% of the shares, is valid.
Accordingly, the appeal must be dismissed, even though the appellant stated
that her daughter was involved and actively participated in managing the
company.
[7]
She explained that her
daughter had a professional career that often caused her to be physically absent.
She also mentioned that the power of attorney had been signed prior to a trip
to Europe.
[8]
The evidence established
that the content of the power of attorney had never been amended.
[9]
The appellant would
like the Court to accept explanations that are essentially verbal to contradict
a valid written document that was duly drafted by a notary and signed in his
presence and is, moreover, still in force. However, not only did the appellant contradict
the content of the power of attorney, the person who assigned to the appellant her
rights to manage the company was conspicuously absent
from the hearing.
[10]
Such evidence is simply
not acceptable or satisfactory and does not make it possible to set aside the content
of a document that is not only formal, but also very clear.
[11]
It is crucial in such
matters to attach prime importance to the content of a formal document signed in
the presence of a disinterested notary rather than to accept verbal explanations
provided by an interested party, particularly if such explanations contradict
the written document.
[12]
The power of attorney
clearly stipulates that the appellant had the inherent right and power to hold
100% of the shares with holding rights. In other words, the appellant held all
powers related to the shares, with an individual share ownership above 40%,
that is, 100 %. Furthermore, all the assumed facts which prove or confirm
the appellant’s powers were recognized by the appellant.
[13]
I note the content of
the allegations admitted–paragraphs h, s and z, all of which confirm the appellant’s
powers.
[14]
For these reasons, the
appeal must be dismissed.
Signed at Ottawa, Canada, this 13th day of October 2010.
“Alain Tardif”
Translation certified true
on this 6th day
of December 2010.
Daniela Possamai,
Translator
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