Citation: 2007CCI300
Date: 20070716
Docket: 2004-3730(GST)G
BETWEEN:
GAGNÉ-LESSARD SPORTS INC.,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
[OFFICIAL ENGLISH TRANSLATION]
REASONS FOR JUDGMENT
Archambault J.
[1] Gagné‑Lessard
Sports Inc. ("GLS") is appealing from a Goods and Services Tax ("GST")
assessment made on October 28, 2002, under the Excise Tax Act
("the Act" or "the ETA") in respect of the period from July 1, 1998, to June 30, 2002
("the relevant period"). In its assessment, the Ministère du Revenu
du Québec ("the MRQ"), acting on behalf of the Minister of National
Revenue ("the Minister"), increased GLS's net tax by $129,553.20, and
the interest thereon is $12,599.39.
[2] At the beginning of
the hearing, counsel for the Respondent noted that he had informed the
Appellant, at a pre‑trial conference held on November 3, 2006, that he would consent
to a judgment concerning the supplies made by the Appellant prior to
October 2000. Counsel for the Respondent quantified these supplies at
$78,103.25, to which the sum of $1,867 was to be added, for a total of
$79,790.25. According to the calculations made by counsel for the Respondent,
and as shown in Exhibit I‑4, the amounts that are still in dispute
are as follows:
[translation]
. . .
|
− sales of parts
service access (TOTAL)
|
$551.56
|
|
− insurance tax (TOTAL)
|
- $26.93
|
|
− sales of tires and of new and
used vehicles to non-residents (TOTAL)
|
$49,238.32
|
|
|
$49,762.95
|
[3] Counsel for GLS
stated that the only amount that he is disputing is $49,238.32. He submits that
the vehicle sales in question were exported from Canada. In fact, the issue and the facts of
the case at bar are similar to those in Évasion Hors Piste Inc. v. Her Majesty
the Queen, 2006 TCC 477.
Facts
[4] Mr. Gagné, the
shareholder of GLS, and Brigitte Fontaine, CGA, an employee of GLS during the
relevant period, testified at the hearing. They discussed the
circumstances under which GLS sold off‑road vehicles to American
consumers. GLS operated a business that sold off‑road vehicles such as
motorcycles and all‑terrain vehicles in Coaticook, a town located roughly
15 km from the Canada-U.S. border. Mr. Gagné noted that there was a
time when the Canadian‑U.S. dollar exchange rate prompted many of GLS's
customers to buy off‑road vehicles in the United States. However, during the
relevant period, the situation was reversed, and many American customers came
to GLS.
[5] In order to ensure
that GLS was complying with all the provisions of the Act, Mr. Gagné
asked Ms. Fontaine to consult with the MRQ in order to find out about the
procedure for exporting his vehicles to the United States. Initially, a GLS
employee used a company truck to deliver the off‑road vehicles to the
border station parking lot. A photograph of the border station shows that the
parking lot in front of the station is on U.S. territory.
[6] GLS, being concerned
about observing the requirement to provide proof of delivery, decided to use a
common carrier, which was also to deliver off‑road vehicles intended for
American customers to the border station. Unfortunately, the U.S. customs officers
did not agree to systematically stamp the contracts of sale pertaining to the off‑road
vehicles. According to Mr. Gagné, this left GLS in a vulnerable position.
The Canadian customs officers had already notified GLS that they had
nothing to do with its exports of off‑road vehicles.
[7] Following a
conference held by the Coaticook chamber of commerce, which Ms. Fontaine
attended, a woman from the duty‑free shop raised doubts about GLS's
procedures. When Ms. Fontaine told Mr. Gagné about this, he told her
that a gentleman named Mr. Roy, a U.S. resident who worked for the
American customs brokerage company Norman G. Jensen Inc. ("Jensen"),
had offered him customs brokerage services for the purposes of U.S. legislation.
GLS accepted this offer.
[8] From that point
onward, the vehicles were exported in the following manner. The American
consumer personally came to GLS's place of business and signed a contract to
purchase the off‑road vehicle. The contract stated not only the name and
address of the American consumer, but also a description of the vehicle,
including the serial number and the agreed price. There was no reference to GST
or provincial tax, but the contract bore the statement "For U.S.A. export
only". The American consumer then took possession of the off‑road
vehicle and transported it himself with his own tow truck or that of a friend
who came along, since the vehicle was not registered and could not be operated
in Canada. In addition to
the contract of sale, the consumer signed a form entitled "Proforma
Invoice", which provided Jensen's business name and a description of the off‑road
vehicle, including its serial number. On the form, GLS was described as the
"Exporter, shipper, seller" and the American consumer was described
as the "Consignee" at one location and the owner at another location.
The form included the following "Carrier's Certificate", which was
signed by the American consumer:
To the district
director of customs, port of arrival
The undersigned
carrier to whom or upon whose order the articles described above must be
released hereby certifies that Norman G. Jensen, Inc. is
the owner or consignee of such articles within the purview of
section 484(H), Tariff Act of 1930. I certify that this manifest
is correct and true to the best of my knowledge.
[9] Although Mr. Roy
did not testify at the hearing, counsel for the Respondent admitted that if he
had done so, he would have confirmed that he was present at the U.S. border
station when each of the vehicles was transported by GLS's American consumers,
and that he filled out all the documentation necessary for the purposes of U.S.
laws on those occasions. The vehicles could not have been used in the United States before being cleared by
custoMs. In addition, Mr. Roy apparently told GLS that it did not
have to collect GST under these circumstances.
[10] Once the formalities
to be carried out at the U.S. border were completed, Jensen would send GLS a
statement of account setting out any American fees that the American consumer
had to pay, plus the brokerage fees and an "MPF user fee".
Upon selling an off‑road vehicle to an American consumer at its
place of business, GLS collected these American fees and remitted a receipt therefor
to the American consumers. The American fees were then paid to Jensen.
[11] According to Mr. Gagné,
it was more expensive to use Jensen's services than to deliver the off‑road
vehicles to the U.S.
border station himself. He resigned himself to the latter approach so that he
could obtain irrefutable proof. According to him, the documentation provided by
Jensen was the best evidence that the off‑road vehicles were exported to
the United
States.
Indeed, counsel for the Respondent admitted, at the beginning of the hearing,
that all the vehicles intended for American consumers and covered by the
assessment were indeed exported to the United States. Consequently, Mr. Gagné
did not understand why the Canadian tax authorities were asking him to remit
GST on sales to these American consumers.
[12] I should add that Ms. Fontaine
had contacted MRQ representatives prior to this in order to ensure that this
new procedure complied with the Act. According to her testimony, she told
the customer information officer that the American consumers came to her place
of business and personally delivered the vehicles to the U.S. border
station. Unfortunately, Ms. Fontaine did not take down the name of the
person who provided her with the information, and did not take notes concerning
the conversation. Moreover, she acknowledged that she did not go to the MRQ's
office with the relevant documentation.
[13] Mr. Gagné's
frustration with the MRQ's assessment was worsened by the fact that the MRQ's
auditor had been at GLS's place of business for several months, including during
part of the relevant period (specifically, from April to June 2002) and
that she never told him that what GLS was doing was inappropriate. The auditor
had undertaken the audit because GLS was claiming input tax credits (ITCs) that
were significant in relation to the GST collected. During her audit, she found only
one mistake in the way that the net tax was calculated, and the amount involved
was roughly $500. The auditor even told GLS that its accounting was
exemplary and of a high quality that was rarely encountered.
In August 2002, when GLS contacted the MRQ to find out how much GST it
would have to remit following the audit, the company was shocked to learn that
the unpaid GST amount had increased from $500 to approximately $150,000.
[14] This shock turned to
anger when the Minister took collection measures to recover these amounts.
Although an agreement providing for the payment of $5,000 per month was made
with the collection officers, and there were not supposed to be any seizures,
the Minister not only withheld tax refunds, but also seized amounts payable by
GLS customers for goods or services supplied by the company. Mr. Gagné stated
that the MRQ's actions lost him his co-shareholder and several employees. He stated
that he incurred roughly $78,000 in legal fees by reason of the MRQ's
assessment on behalf of the Minister. For the period from July 31, 2005,
to February
15, 2007, the legal fees and disbursements billed by the lawyer who represented
him at the hearing amount to $57,603 including taxes, or roughly $50,000 before
taxes. Thus, Mr. Gagné's business suffered enormously as a result of the
Minister's assessment and the collection measures taken for the Minister's
benefit.
[15] It should also be
added that Mr. Gagné offered to pay the MRQ the amount of uncollected GST
on sales to American consumers so that those consumers could claim a refund of
that tax. It was then explained to him that they would only be able to obtain
such a refund if the sale was made within the past year and that, consequently,
it was not in GLS's interest to initiate efforts in this regard, because this
would amount to an admission that the assessment in respect of the period prior
to the past year was well founded. He was apparently told: [translation] "Forget that idea!"
Consequently, GLS did not move forward on its offer. According to Mr. Gagné,
this arrangement would have enabled him to obtain a $25,000 GST refund for
the year in question.
[16] Ms. Fontaine revealed
that the MRQ cancelled the assessment made under the Act respecting the
Québec sales tax ("QST"), not only with respect to the vehicles
delivered prior to October 2000 by a GLS employee or by a common carrier,
but also with respect to vehicles personally transported by the American
consumers to the border station for customs clearance by Jensen. Unfortunately,
the Minister refused to agree to an administrative settlement similar to the
one made by the MRQ.
[17] After receiving its
assessment, GLS asked the MRQ to provide it with a signed description of the
correct approach to take, since it was not in compliance with the Act. The only
thing that the MRQ provided in response to this request was a copy of the
statutory provisions, which came ten days following the request.
GLS's position
[18] In his oral argument, counsel for GLS submitted that
the assessment should be vacated because the off‑road vehicles were
delivered to the United States. In his view, the handing of the vehicles to the American
consumers at his client's place of business was not delivery in the legal
sense. In support of his position, he cited several provisions of the Civil
Code of Québec ("C.C.Q.") and the following provisions in
particular:
1456. The allocation of fruits and revenues
and the assumption of risks incident to property forming the object of a real
right transferred by contract are principally governed by the Book on Property.
The debtor of
the obligation to deliver the property continues, however, to bear the
risks attached to the property until it is delivered. [Toutefois, tant que la délivrance du
bien n'a pas été faite, le débiteur de l'obligation de délivrance continue
d'assumer les risques y afférents.]
1717. The
obligation to deliver the property [délivrer le bien] is
fulfilled when the seller puts the buyer in possession of the property or
consents to his taking possession of it and all hindrances are removed.
[Emphasis added.]
[19] He also cited
sections 22.7 and 22.9 of the QST statute, which deal with the presumption associated
with the delivery [délivrance] of property:
22.7 Supply of corporeal movable
property by way of sale — A supply of corporeal movable property by way of sale is deemed to
be made in Québec if the property is delivered [délivré] in Québec to
the recipient of the supply.
22.9 Property
is deemed to be delivered [Présomption quant à la délivrance d'un bien] − Property is deemed to be
delivered
1) in Québec where the supplier
(a) ships
the property to a destination in Québec that is specified in the contract for
carriage of the property or transfers possession of the property to a common
carrier or consignee that the supplier has retained on behalf of the
recipient to ship the property to such a destination, or
(b) sends
the property by mail or courier to an address in Québec; and
2) outside Québec where the supplier
(a)
ships the property to a destination in another province that is specified in
the contract for carriage of the property or transfers possession of the
property to a common carrier or consignee that the supplier has retained on
behalf of the recipient to ship the property to such a destination, or
(b) sends
the property by mail or courier to an address in another province.
Exception — The first paragraph does not
apply where the property is corporeal movable property supplied by way of sale
that is, or is to be, delivered outside Canada to the recipient.
[Emphasis added.]
[20] On the basis of
these provisions of the QST, counsel for the Appellant submitted that the off‑road
vehicles intended for American consumers were not delivered [délivrés] at
GLS's establishment, but, rather, at the U.S. border station. In his
submission, customs clearance was one of the hindrances contemplated by article 1717 C.C.Q.
[21] Counsel for the
Appellant also cited Turcotte c. Lacombe, SOQUIJ AZ‑75011072 a
decision of the Quebec Court of Appeal. The summary of the decision reads [translation]: "The surrender of
the documents required by the law and the administrative body was an indispensable
component of the delivery [délivrance] of the buses, and the delivery [délivrance]
was not completed."
[22] He also cited Bernier
c. Boissonneault, 2007 QCCQ 565, a decision of the Court of
Québec, Small Claims Division. In that case, the plaintiff claimed $3,934 for
the loss of the value of a vehicle purchased for $3,600, plus $334 in related
fees paid to the Société de l'assurance‑automobile du Québec. In 2000,
the plaintiff had purchased an all‑terrain vehicle, which he registered
on February 3, 2001. He was able to renew the registration for two
subsequent years, but was unfortunately unable renew it in 2003 because,
according to the explanations of a Quebec provincial police detective, the
vehicle's serial number was invalid and the vehicle was seized to be destroyed.
Labbé J. held that the obligation to deliver the property sold, with all its
accessories, was not performed, and he cited articles 1717 and 1718 C.C.Q.
in this regard. At paragraph 13 of his decision, he stated: [translation] "The fact that it was
impossible to register the purchased vehicle in 2003, for a reason that existed
at the time of the sale, constitutes a hindrance within the meaning of article
1717 C.C.Q., which prevents the purchaser from having a full right of
ownership in the vehicle in question." (Emphasis added.) In
support of his decision, Labbé J. cited Turcotte, supra.
[23] I wish to note some
of the decisions in GLS's Book of Authorities. The first is Nicholas c. Doré,
SOQUIJ AZ‑50224494, B.E. 2004BE‑443, a decision of Judge
Michel Parent of the Court of Québec, Small Claims Division. There, a
claimant sought $2,700, consisting of the purchase instalments for a power
shovel that that respondent never received. After referring to articles 1716 and
1717 C.C.Q., the judge, at paragraph 36 of his reasons, cited Jacques Deslauriers,
in Collection de droit: Obligations et contrats, 2003‑2004, vol. 5
(Cowansville: Yvon Blais) at page 169:
[TRANSLATION]
[36] Jacques Deslauriers
writes as follows on the subject of delivery [délivrance]:
Concretely, delivery [délivrance] can
be effected in various ways. One way is to hand over the keys that provide
access to the property, such as a house or car. Another way is to submit the
title document, such as a bill of lading, which allows the purchaser to claim
the property from a third party, or an obligation [sic]
to the buyer of the place where he can pick up the materials that he has purchased.
In the case of an immovable, this will also involve the signature of a deed of
sale that is to be published in order to be opposable to third parties (art. 1719 C.C.Q.).
The seller bears the costs of delivery. The purchaser, for his part, bears
the costs of removing the property (arts. 1722 and 1734 C.c.Q.).
In ordinary physical, there is a tendency
to confuse delivery [délivrance] with delivery [livraison]. Strictly speaking, delivery [livraison], which pertains to
corporeal movable property, requires the seller to take physical steps to remit
the property to the buyer; a sale with delivery includes transportation of the
property to the buyer's residence or place of business. It should be noted
that there can be delivery [délivrance] without delivery [livraison].
In addition, there can be delivery [livraison] without delivery [délivrance]
within the meaning of art. 1714 C.C.Q. Consider, for example, the rental
of an appliance with an option to purchase. If the lessee of the appliance
avails herself of the purchase option in the allotted time, delivery [délivrance]
will occur by inversion of title. The lessor of the appliance will cease to act
as lessor. The lessee, who was simply the holder of the appliance, will now be
in possession of it. The payments will now be considered to be in
satisfaction of the purchase price, as opposed to being rent. Thus, delivery [délivrance]
is a notional process that is occasionally completed by a physical delivery [livraison]
process. A situation where the buyer and seller agree that the buyer will take
possession of the property on premises to which the seller will facilitate the
buyer's access, also involves delivery [délivrance]. So do cases
where the buyer disassembles the property in order to transport it. In such circumstances,
the seller's obligation might be limited to the provision of unhindered
access to the premises, and there is legal delivery [délivrance] but not
necessarily physical delivery within the strict meaning of the term livraison.
In fact, these cases merely involve removal by the buyer. (Emphasis added.)
[24] Here is what Parent
J. added at paragraph 44, and what he concluded at paragraphs 47‑48:
[translation]
[44] A distinction
must be drawn between transfer of ownership, delivery [délivrance] and physical
delivery [livraison]. Mr. Nicholas was entitled to take
possession of the piece of equipment in St‑Amable upon making the payment.
It was only for personal, practical reasons that he delayed taking possession.
Nothing and nobody was opposed to his taking possession of the equipment in St‑Amable.
Mr. Nicholas did not need Mr. Doré's authorization. Consequently, Mr. Doré
fulfilled his obligation to legally deliver the property by leaving it up to
the claimant to personally transport the equipment when it suited him.
. . .
[47] Article 1456(2)
C.C.Q. provides that "[t]he debtor of the obligation to deliver the
property continues, however, to bear the risks attached to the property until
it is delivered [délivrance]."
[48] First of
all, the Court has already held that Mr. Doré fulfilled his obligation of delivery
[obligation de délivrance].
[Emphasis added.]
[25] In Paré c.
Francoeur, SOQUIJ AZ‑00021539, J.E. 2000‑1079, Taschereau J.
made the following comment after analyzing article 1456 C.C.Q. and
article 1717 C.C.Q.
[translation]
It is clear that the
seller has only fulfilled his obligation to deliver the thing sold to the
buyer if he has done everything that could be done to enable the buyer to
use the thing, and thereby derive all the profits and benefits that an
owner can normally expect.
[Emphasis added.]
[26] In Décors
Jacques Parent inc. c. Slater, SOQUIJ AZ‑01036227, B.E. 2001BE‑466,
Gagnon J. had to decide whether the plaintiff was liable for the delivery
of furniture to Colorado in a damaged condition. The defendants, who bought the
furniture in Canada, had asked for it to be shipped to them at their expense. The judge
held that the plaintiff, Les Décors Jacques Parent Inc., had fulfilled its
obligation of delivery [délivrance]. He wrote:
[translation]
. . . In this
regard, the Court finds that delivery [délivrance] within the legal
meaning of the word was complete when the property was entrusted to a
carrier in good condition and property packed. . . .
[Emphasis added.]
[27] The judge cited
Léon Faribault, who wrote the following observation on article 1493 of the
old Civil Code of Lower Canada:
[translation]
Where the items must be delivered F.O.B. to a common carrier, the
carrier becomes an agent of the buyer, and in order for valid delivery [délivrance]
to be made, it is sufficient for the seller to hand over the items to the
carrier.
[Emphasis added.]
[28] Professor Denys‑Claude
Lamontagne wrote on the concept of delivery [délivrance] in Droit de
la vente, 3d ed. (Cowansville: Yvon Blais), at pages 78‑79,
paragraphs 144 and 147:
[translation]
(i) Nature
of delivery [délivrance]
[144] Delivery
[délivrance] consists of the seller changing the detention of the
property sold, either physically (in which case it coincides with
the buyer's taking of possession) or by the property being placed at
the buyer's disposal. In short, it is the performance of an act: the transfer
of control, or of the ability to exercise control, over the property to the
buyer, enables him to concretely benefit from the effects of the transfer of
ownership.
• Such a transfer
occurs by contracting parties' mere exchange of consents (articles 1386
and 1708 C.C.Q.).
• The transmutation
of ownership implies a transfer of possession: the buyer acquires the animus
and the corpus, even though he may be in possession through the seller, who
detains it precariously (articles 921 et seq. C.C.Q.). Thus, it
is inaccurate to state that delivery [délivrance] effects a transfer of
possession (article 1717 C.C.Q.): only detention is transferred.
. . .
[147] Theory of risks −
The date of delivery [délivrance] is important in a sale, notably because
risk and ownership may be transferred at different times. In such matters,
the res perit domino principle (article 950 C.C.Q.) is
superseded by the res perit debitori principle. Notwithstanding the
transfer of ownership, where the property is determinate as to its kind only (articles
1562 and 1563 C.C.Q.), the seller assumes the risks of loss until the property
has been delivered [délivrance] (articles 1456 and 1846 C.C.Q.) (supra,
paragraphs 116 et seq.). In other words, control or detention of the
property warrants legal responsibility. However, the principle is not absolute.
[Emphasis added.]
[29] It should be noted
that I saw no statutory enactment, case or doctrine in GLS's Book of Authorities
that stands for the proposition that the obligation to deliver goods [obligation
de délivrance] includes an obligation to clear off‑road vehicles sold
by a Canadian or Quebec seller to a foreigner. I should also note that before
GLS began using Jensen's services, it delivered its off‑road vehicles
without looking after the customs clearance.
Analysis
[30] Despite his
excellent oral submissions, counsel for GLS has not succeeded in satisfying the
Court that the Minister's assessment was wrong. First of all, it should be
noted that provisions relevant to a decision in this matter are subsection 165(1)
and paragraph 142(1)(a) of the ETA, which I shall reproduce here:
165(1) Imposition of goods and services tax —
Subject to this Part,
every recipient of a taxable supply made in Canada shall pay to Her Majesty in right of Canada tax in respect of the supply calculated at the rate of 7% on the value of
the consideration for the supply.
[Emphasis added.]
142(1) General
rule — in Canada --
For the purposes of this Part, subject to sections 143, 144 and 179, a
supply shall be deemed to be made in Canada if
(a) in the case of a supply by way of sale of tangible
personal property [bien meuble corporel], the property is, or is to be, delivered
[livré] or made available in Canada to the recipient of the supply;
[Emphasis added.]
[31] According to
paragraph 142(1)(a) of the Act, tangible personal property supplied
by way of sale is deemed to be supplied in Canada if it is
"delivered" [livré] or "made available" to the
recipient in Canada. It should be noted from the outset that the enactment
refers to "livraison", not "délivrance", of
property in Canada. As for the expressions "delivered" and "made
available", it is not necessary to refer to the rules, principles or
concepts of Quebec civil law to ascertain their meaning. Since it is not necessary to refer
to the Civil Code of Québec,
section 8.1 of the Interpretation Act is of no assistance here.
[32] The issue that the
Court must rule on is whether goods that GLS sold to American consumers were
delivered [livrés] to these consumers, or, at at least, made available
to them. The evidence clearly shows that GLS transferred possession of the off‑road
vehicles to those consumers in Canada after transferring the title of ownership
to them. In addition, GLS clearly made the off‑road vehicles available to
the consumers in Canada. Consequently, as far as the all‑terrain vehicles were concerned,
the American consumers could have decided not to transport them to the United States and to use them on land
that they owned or leased in Canada.
[33] Unfortunately for
GLS, its appeal must meet with the same fate as the appeal of Évasion Hors
Piste (the company referred to above) for the same reasons.
[34] I must also
emphasize that the following comments, which I found to be completely justified
in Évasion Hors Piste Inc., are even more compelling in the case at bar,
not only beause counsel for the Respondent acknowledges that all the goods
covered by the assessment was exported to the United and because the MRQ
cancelled the provincial assessment in relation to all the vehicles exported to
the United States, but also by reason of the role of the MRQ in its
communication with the Appellant's representative and of the auditor's actions
in her capacity as agent for the Minister during her audit. I wrote as follows at
paragraph 21 of the decision in Évasion Hors Piste Inc.:
[21] While
the Minister's assessment is consistent with the letter of the ETA, I cannot
help but note that it does not conform to its spirit. It is clear from the
provisions of the ETA that tangible personal property exported outside Canada should not be subject to GST. In fact, this
reflects one of the major reasons for replacing the old federal sales tax with
the GST: to make Canadian goods more competitive in the global marketplace.
Since both the auditor and counsel for the Respondent acknowledge that some of
EHP's vehicles were truly exported to the United States but that the proper procedure was not followed, EHP
is being penalized by having to pay a tax that would not have had to be
collected if EHP had followed the correct procedure. Consequently, I strongly
recommend that the Minister exercise his power under subsection 23(2) of the Financial Administration
Act and issue a remission order reimbursing EHP for the GST, interest and
penalty for which it was assessed, but — and this is obvious — only to the
extent that he is satisfied that the vehicles were actually exported to the
United States. If the Minister does not take this measure, a grave injustice
will be done to EHP, which is unable to force its U.S. customers to pay it the GST that they should have paid it in its capacity
as agent for the Minister. Indeed, the American courts refuse to allow foreign
countries to enforce tax debts in the United States, and
this should be one more reason for the Minister to remedy this injustice.
[35] Counsel for GLS has asked
that the Respondent be ordered to pay costs by reason of her conduct. I have
found that the Minister's assessment is well founded in law, and thus, while
the situation is completely different when it is analyzed from the perspective
of fairness, the Respondent cannot be blamed for defending her assessment
before this Court. I should add that, at the beginning of the hearing, the
Respondent conceded that a part of the net tax had to be cancelled. I can award
costs to deter "impetuous, frivolous and abusive behaviour and
litigation" or to "compensate, at least in part, the successful party
who has incurred, sometimes, large expenses to vindicate its rights." However, I do not believe that it is
this Court's role to compensate a party that believes, whether for legally
correct or incorrect reasons, that he suffered damages due to the erroneous
communication of information that was required in connection with the
administration of the Act. That event is external to the judicial challenge process
against the assessment.
[36] For all these
reasons, GLS's appeal is allowed, without costs, and the assessment is referred
back to the Minister for reconsideration and reassessment on the basis that an
amount of $79,790.25 must be excluded from the taxable supplies.
Signed at Ottawa, Canada, this 16th day of July 2007.
"Pierre Archambault"
____________________________________
Archambault J.
Translation certified true
on this 20th day of February 2008
François Brunet, Revisor
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