Date: 20010227
Dockets:
97-1245-IT-G,
1999-121-IT-G,
1999-122-IT-G,
BETWEEN:
GINETTE LACHAPELLE
MATHIEU,
ÉVARISTE
MATHIEU,
CARMELLE
BOUTIN,
Appellants,
and
HER MAJESTY THE
QUEEN,
Respondent.
Reasons for
Judgment
Lamarre Proulx,
J.T.C.C.
[1]
The appeals of Évariste Mathieu and Carmelle Boutin
were heard on common evidence. They were heard consecutively to
the appeal of Ginette Mathieu Lachapelle. The three
appellants were assessed under section 160 of the Income
Tax Act (the "Act").
[2]
The assessment of the appellant Ginette Mathieu Lachapelle is
dated June 5, 1996. It is in the amount of $78,573.13, which
includes $17,250.40 in federal income tax, $2,761.74 in penalties
and $58,560.99 in interest (Exhibit A-1, Tab 1).
The confirmation is dated January 30, 1997
(Exhibit A-1, Tab 2).
Ms. Mathieu Lachapelle was assessed for a transfer that
allegedly took place on or about December 16, 1982.
[3]
The assessments of Évariste Mathieu and Carmelle Boutin
are dated December 16, 1997 (Tab 1 of
Exhibit AM-1 and Tab 1 of
Exhibit AM-5). Mr. Mathieu was assessed for a
transfer that allegedly took place on or about December 16, 1982.
Ms. Boutin was assessed for a transfer that allegedly took place
on or about October 21, 1988. In both cases, the federal tax is
$17,250.40, the penalty, $2,761.74 and the interest, $68,747.13,
making a total of $88,759.27.
[4]
On October 21, 1981, Conforbel (Canada)
Inc. ("Conforbel") signed an agreement with Fitzpatrick
Construction Limited ("Fitzpatrick") to construct a
national monument to Algerian independence
(Exhibit A-1, Tab 4).
[5]
The agreement provided that Conforbel
would provide comprehensive services for the construction and
erection of the forms and installation of the concrete, both in
Algeria and in Canada. The agreement provided that the work would
commence in Algeria no later than January 1, 1982. It also
provided that Évariste Mathieu would be personally in
charge and would be responsible for the successful completion of
the work.
[6]
Expenses were reimbursed upon presentation of invoices or a pay
list. Conforbel would receive $550,000
in fees, and the final payment would be made on June 30, 1982. It
was also provided that $10,000 would be deposited in the name of
Évariste Mathieu to guarantee performance of the
work.
[7]
At the outset, Évariste Mathieu held the only 100 common
shares that were issued in respect of that corporation. About two
weeks later, a daughter of Mr. Mathieu,
France Mathieu Labrosse, became the sole shareholder.
She was appointed president, vice president and secretary of the
corporation. Along with some of her brothers and other persons
unrelated to the family, she had a management role at
Conforbel's place of business in Canada. It was there that
the pay cheques were prepared, the books were kept, suppliers
were chosen and other things required by the work were done. In
Canada, there were two workshops that built and tested the forms
needed to erect the monument. The forms were subsequently sent to
Algeria.
[8]
In 1982, Ms. Labrosse told her father
that she had other plans and wished to be replaced.
Mr. Mathieu then asked his daughter Ginette to become the
registered shareholder. No explanation was given at the hearing
as to why Mr. Mathieu did not want to be registered as a
shareholder in the company's books. Nevertheless, it was
clear from the testimony and the documentary evidence adduced at
the hearing that he was the one who ran the company.
[9]
On December 13, 1982, Conforbel issued a bank document in the
name of Ginette Lachapelle in the amount of $500,000. The
notations on it include [TRANSLATION] "Re deposit" and,
in place of signatures, [TRANSLATION] "non-negotiable"
(Exhibit A-1, Tab 7).
[10]
At about that time, Évariste Mathieu, his wife,
Carmelle Boutin, Ginette Mathieu Lachapelle and
her then husband, Mr. Lachapelle,
Gaétan Mathieu, the brother of Ginette Mathieu
Lachapelle, and his then wife, Carole Smith, went to the
Cayman Islands to deposit the $500,000. Ms. Smith
interpreted for the others because they did not speak English.
Ms. Boutin and her son-in-law, Mr. Lachapelle,
apparently did not accompany the others to the office of the bank
where the deposit was made.
[11]
The deposit, dated December 16, 1982,
was made in the names of Ginette Lachapelle and
Évariste Mathieu at the Royal Bank of Canada,
George Town, Grand Cayman (Exhibit A-1,
Tab 8). There were two signatures, one by Évariste
Mathieu and one by Ginette Lachapelle. The certificate, dated
December 16, 1982 (Tab 9 of Exhibit A-1),
shows a deposit in the amount of $600,000. It is in the name of
Ginette Lachapelle and Évariste Mathieu or either of them.
The $100,000 difference was not explained.
[12]
According to the testimony of Ginette Mathieu and Évariste Mathieu,
the parties' intention was to deposit the amount at the Royal
Bank in the Cayman Islands in the name of Conforbel Canada
Inc. They said that the Royal Bank did not accept deposits
from corporations but only from individuals. They therefore
decided to make the deposit in the name of
Évariste Mathieu and his daughter Ginette. In his
testimony, Mr. Mathieu said that he would have preferred to
make the deposit in his own name and that of his wife, but that
Ginette had objected to this and said that she would leave
Conforbel if her name did not appear on the certificate of
deposit.
[13]
There was no explanation as to why it had been decided to take
this amount to the Cayman Islands.
[14]
InJanuary 1983,
Ginette Mathieu, uneasy about having the certificate in her
name when the money belonged to Conforbel, sought advice from the
corporation's accountants. They suggested that she establish
the true ownership of the deposit in a document and that she
enter the amount in the corporation's assets and include the
interest from the deposit in computing its income. The document
can be found at Tab 11 of Exhibit A-1. It reads as
follows:
[TRANSLATION]
We the undersigned, Ginette Lachapelle and
Évariste Mathieu, declare that all sums of money that are
or will be held in the following bank account(s): The Royal Bank
of Canada, Grand Cayman, are held for and on behalf of
Conforbel Canada Inc. The opening of this bank account or these
bank accounts in the name of Ginette Lachapelle and
Évariste Mathieu was necessitated by the fact that the
Royal Bank of Canada, Grand Cayman, could not open a bank
account in the name of Conforbel Canada Inc.
. . .
[15]
The document is dated January 17, 1983.
It was signed by Ginette Lachapelle and
Évariste Mathieu. Two witnesses also signed. The
financial statements and other documents found at Tabs 13 to 15
of Exhibit A-1 confirm Ginette Mathieu's testimony on
this point.
[16]
In 1984, there was a withdrawal of
$300,000. At Tab 9 of Exhibit A-1, it can be seen that in
April 1984, the Cayman Islands deposit was in the amount of
$223,052.38. According to the appellant Ginette Mathieu
Lachapelle, the withdrawal went through Conforbel in order to be
loaned to a corporation of which Évariste Mathieu was
a shareholder along with two of his sons. The loan was recorded
in Conforbel's books.
[17]
Conforbel was reassessed on October 15, 1985,
for a refund of an overpayment of advances to the Commission de
la santé et de la sécurité au travail
(Tab 20 of Exhibit I-1). That assessment was
contested. A judgment of this Court in 1993 confirmed the
Minister of National Revenue's assessment. Strangely enough,
nothing was said at the hearing in the instant case about the
discussions that the managers must have held among themselves
concerning the 1985 assessment. At that time, Ginette Mathieu
Lachapelle and her father were still getting along.
[18]
In 1988, Évariste Mathieu
sent a letter to the Royal Bank of Canada in the Cayman Islands
asking it to remove Ginette Mathieu's name and replace
it with that of Carmelle Boutin, his wife (Tab 10 of
Exhibit A-1). As can be seen at Tab 9 of
Exhibit A-1, the certificate of deposit dated October
21, 1988, in the amount of $323,620.73 is in the names of
Évariste Mathieu and
Carmelle B. Mathieu.
[19]
In 1988, Évariste Mathieu
asked his daughter Ginette to lend some money to one of his
construction firms. The total amount advanced was $225,000. This
amount was admitted by both Mr. Mathieu and Ms. Mathieu.
Ms. Mathieu asked him what guarantee she had that the money
would be paid back to her. Her father apparently told her that
she had an excellent guarantee because she was a shareholder of
Conforbel and the joint holder of the certificate of
deposit.
[20]
In 1990, at the request of
Évariste Mathieu, who wished to purchase and dispose
of land without any restrictions, Resolution 90-1 was
adopted by Conforbel (Tab 18 of Exhibit A-1).
According to Ms. Mathieu, the purchase of land for construction
had been made through Conforbel because Conforbel had sufficient
assets to give the banks confidence.
[21]
In 1991, Ginette Mathieu Lachapelle
apparently received an initial reimbursement of $20,000 from her
father for the $225,000 loan but at the same time she apparently
received confirmation from her father that her mother had
replaced her as the second person named on the certificate. The
fact that this had been done behind her back offended her. She
sent a formal notice to her father that he was no longer the
company's director, that by-law 90-1 had been rescinded and
that he no longer had any powers (Tab 20 of
Exhibit A-1). This document is dated June 6,
1991.
[22]
Évariste Mathieu asked a notary named Farley to prepare the documents to transfer his
daughter's shares to him. However, she did not sign the
documents. Subsequently, Mr. Mathieu said that he no longer had
anything to do with the company. The documents were apparently
prepared in May or June 1991, according to a letter by Mr.
Farley, the notary, dated September 14, 2000
(Exhibit AM-4).
[23]
Subsequently, Ginette Mathieu Lachapelle brought some actions
against her father and mother in order to be reimbursed for the
balance of the Cayman Islands bank deposit. In response to a
formal notice, counsel for the parents replied that Ms. Mathieu
Lachapelle was only a nominee (Tab 21 of
Exhibit A-1). On May 7, 1992, in reply to an amended
declaration by Ginette Mathieu adding the name of Conforbel,
Évariste Mathieu contended that all the money
belonged to him because it came from work that he had performed
for Fitzpatrick.
[24]
The transcript entitled [TRANSLATION] "Examination of
Évariste Mathieu after filing of defence on the
application of the plaintiff", dated October 2, 1992, from a
case in the Quebec Superior Court between
Ginette Mathieu Lachapelle and
Évariste Mathieu and
Carmelle Boutin Mathieu was tendered in evidence at Tab
24 of Exhibit A-1. I will quote a few
passages:
[TRANSLATION]
Q.
In paragraph 5 of your pleading, Mr. Mathieu, you say that
the certificate in question, that is the certificate of deposit
for the deposit in Grand Cayman, rightfully belonged to you and
[TRANSLATION] "that, by right, I could replace the plaintiff
with my wife, Carmelle Boutin Mathieu." Is that
correct?
A.
Yes.
Q.
What makes you say that the certificate belonged to you by
right?
A.
Because the money was mine.
Q.
The money was yours?
A.
Yes.
Q.
And do you stand by what you said?
A.
I certainly do.
Q.
You acted at some time, at a given time, as director of the
Conforbel Canada company. Is that correct?
A.
Yes.
Q.
Is it not correct to say that the money belonged to Conforbel
Canada?
A.
That's correct. It came from Conforbel Canada.
Q.
That's right. And that the money did not belong to you
...
A.
No.
Q.
It belonged to Conforbel Canada. Is that correct?
A.
It's because Conforbel Canada belonged to me. Ginette was
only acting as a nominee, as her daughter ... her sister had
done before her.
. . .
MAURICE
PERRON
Q.
Mr. Mathieu, I say to you, Mr. Mathieu, that this document states
that the money belongs to Conforbel Canada. Does the money belong
to Conforbel Canada. Is this correct?
A.
The document says that, but it's incorrect.
Q.
In ‘83 and up to ‘90, I understand, Mr. Mathieu, that
you handled the preparation of the financial statements for
Conforbel Canada.
A.
Yes.
Q.
That's correct? Is it not also correct to say that the
accountants who worked for the company at that time were Harel,
Drouin et Associés?
A.
Yes it is.
Q.
It's correct. Is it not also correct to say that the
financial statements that were prepared over the years by Harel,
Drouin et Associés reflected the amount that had been
invested or, at the very least, the interest on the Grand Cayman
account?
A.
I'd have to check.
. . .
Q.
Yes? About that? Is ... you say in your defence that the
deposit was cashed. In paragraph 15 of your pleading
... no, it isn't 15 ... it's 14, right? O.K.
You say that it was in eighty ... - paragraph 17 -
that you decided to replace Ginette Mathieu with your
spouse.
A.
Yes. My wife asked me to, and I didn't see ... I no
longer saw the need for my daughter to be there; so I replaced
her with my wife.
. . .
Q.
And the money, Mr. Mathieu, that you cashed in April 91, you
deposited it in your account, I suppose?
A.
That's nobody's business. It's my
business.
Q.
Mr. Mathieu ...
A.
I have the right to do what I want with my money.
Q.
... you have to answer the questions you are asked. You have
no choice.
[25]
The appellant Ginette Mathieu Lachapelle repeated, in a sworn
statement dated June 3, 1993, that was made for the purpose of
finding out what had happened to the funds deposited in the Royal
Bank in the Cayman Islands, that these funds were the property of
Conforbel (Tab 4 of Exhibit I-1).
[26]
On October 23, 1990, the deposit amounted to $400,653.14
(Tab 17, Exhibit I-1). This was the last certificate
that was tendered in evidence. It is dated October 24, 1990. It
shows that the deposit was being used at that time to secure a
$150,000 mortgage.
[27]
According to his testimony at the hearing, Mr. Mathieu withdrew the balance of the bank deposit in
1992 to lend it to Construction Alain et Sylvain. There is no
documentary evidence to that effect.
[28]
Ms. Boutin's testimony consisted in saying
that her husband did not tell her that she was the joint holder
of the certificate of deposit. Her husband testified to the same
effect at the hearing. She did not make personal use of the money
and she believed that none of her companies profited from it
either.
[29]
Ms. Boutin admitted that 2854-7750
Québec Inc. was a corporation in which she was the
principal shareholder. On April 30, 1991, this corporation
received the sum of $272,558.48 (Exhibit AM-6). She
was unable to explain the source of this payment.
[30]
Serafino Longo, an official of the Minister's, testified
to describe Ms. Boutin's income as it related to,
inter alia, her gross rental income; Exhibit IM-3
was filed in support of this. For the 1988 to 1996 taxation
years, her gross rental income was, respectively, $29,613,
$47,244, $48,538, $61,645, $136,530, $221,889, $240,146, $255,490
and $248,523.
Argument in the appeal
of Ginette Mathieu Lachapelle
[31]
Counsel for the appellant contended that
Évariste Mathieu was the one who really controlled
Conforbel from the beginning until 1990. Thus, in 1990, he had a
special by-law passed by Conforbel that gave him full power over
the corporation (Tab 18 of Exhibit A-1).
Nevertheless, the appellant had had a role as a director since
the fall of 1982. In this capacity, she had participated in
depositing the $500,000 in the Royal Bank in Grand Cayman.
However, in January 1983, she took care to make a written
declaration that this money belonged to Conforbel. The interest
was reported every year in Conforbel's financial statements.
When, in 1984, a portion of the investment was brought back to
Canada to be loaned out, the loan was recorded in the financial
statements. There was no transaction showing that Ms. Mathieu had
benefited financially from this investment.
[32]
When the appellant's name was replaced in 1988 with that of
her mother, Ms. Boutin, she was not informed. She learned of
it only in 1991. This fact shows that
Évariste Mathieu believed that he controlled both
this account and Conforbel's account.
[33]
Counsel for the appellant argued that, beginning in 1992, the
appellant had tried to find out what had happened with
Conforbel's certificate in the Cayman Islands. She attempted
to assert Conforbel's rights in respect of the amount on the
certificate through various court proceedings against her
parents.
[34]
Counsel for the respondent argued that the existence of the
transfer contemplated in subsection 160(1) is a question of
fact and of the transferee's or transferor's credibility.
She referred to the decision in Fasken Estate v. M.N.R.,
[1948] C.T.C. 265, and to the comment of Thorson P. at
page 279:
The word
"transfer" is not a term of art and has not a technical
meaning. It is not necessary to a transfer of property from a
husband to his wife that it should be made in any particular form
or that it should be made directly. All that is required is that
the husband should so deal with the property as to divest himself
of it and vest it in his wife, that is to say, pass the property
from himself to her. The means by which he accomplishes this
result, whether direct or circuitous, may properly be called a
transfer.
[35]
She also referred to the decision in Dunkelman v. M.N.R.,
59 DTC 1242, and the comment of Thurlow J. at
page 1244:
The word
"transfer" is not a term of art and has not a technical
meaning. It is not necessary to a transfer of property from a
husband to his wife that it should be made in any particular form
or that it should be made directly. All that is required is that
the husband should so deal with the property as to divest himself
of it and vest it in his wife, that is to say, pass the property
from himself to her. The means by which he accomplishes this
result, whether direct or circuitous, may properly be called a
transfer.
[36]
Counsel for the respondent said that the evidence must be
assessed in order to determine whether the appellant had not
benefited from this money. For this purpose, the parties'
intention must be taken into account.
[37]
She referred to Évariste Mathieu's testimony on
the Algerian contract to the effect that [TRANSLATION] "It
started at zero and came back down to zero". Did the
appellant not subscribe to this philosophy? At Tab 6, there
is a management contract in the amount of $404,000, which was
paid on an administrative basis for services that were apparently
not rendered by this company. This agreement was entered into for
tax purposes only.
[38]
Counsel argued that there was no evidence that the appellant,
unlike her father, did not have the discretion to use the funds
in the Cayman Islands account as she wished. Since her father
changed the name of the account holder, she could have done the
same thing. She facilitated the decisions and supported them. In
1988, she lent her father $225,000. This loan was not repaid. Her
father apparently told her not to worry, since her name was on
the certificate.
[39]
Counsel for the respondent argued that the appellant had full
control and that she was in favour of the transfer. She was a
person who had a great deal of knowledge and who was involved in
Conforbel. Although the appellant maintained that the amount was
always considered to be an asset of Conforbel, counsel for the
respondent urged me to caution, because the financial statements
were not reliable; they had not been audited or even
reviewed.
Argument in the appeals of Évariste
Mathieu and Carmelle Boutin
[40]
Counsel for the appellants argued that there had been no transfer
in 1982 since, as noted in Ginette Mathieu Lachapelle's case,
the full amount of the certificate was recorded in
Conforbel's books. In 1984, the amount of $300,000, which had
been withdrawn from the bank account, went through Conforbel. The
advances or loans to related businesses were indicated in
Conforbel's financial statements. With regard to the second
amount that was withdrawn in 1991 from the certificate of
deposit, this money was not used personally by Mr. Mathieu
or by Ms. Boutin. The money was lent to
companies.
[41]
As regards Ms. Boutin, the transfer was not between Conforbel and
Ms. Boutin, but between Évariste Mathieu and Ms.
Boutin. Ms. Boutin was not involved either in opening the
bank account in 1982 or in the name change in 1988. Ms. Boutin
never agreed to be the recipient of the money and she had no
control over it.
[42]
In respect of Ms. Boutin, counsel for the appellants referred to
the following paragraphs from the decision in Nanini et al. v.
The Queen, T.C.C., No. 92-2366(IT)G, June 13, 1994, at pages
15 and 16 (94 DTC 1839, at page 1847):
As to whether the transferee in the first
transfer may itself become a transferor rendering a new
transferee liable, the Court was not convinced by the argument of
counsel for the respondent that this mechanism is provided in the
last lines of subsection 160(1):
. . . but nothing in this subsection
shall be deemed to limit the liability of the transferor under
any other provision of this
Act.
In reality, the Court quite simply does not
see how this phrase can be interpreted to mean that a transferee
may himself become a transferor, rendering another transferee
jointly and severally liable and so on in a cascade
effect.
. . .
Furthermore, section 160 in itself is already
enough outside the scope of common law that if Parliament had
wanted to do it in a cascading fashion, it would have
specifically stated so.
[43]
Counsel for the appellants also raised the matter of the
interest. He showed that the tax liability was approximately
$17,000 and that the amount of the interest was approximately
$60,000. Counsel for the appellants asked the Court to recommend
cancellation of the interest.
[44]
Counsel for the appellants also argued that the documents of
Conforbel were no longer in their hands since, in 1991, Ginette
Mathieu Lachapelle as sole shareholder removed the director,
Évariste Mathieu, and that it was up to
Ginette Mathieu Lachapelle to pay Conforbel's
debts.
[45]
Counsel for the respondent argued that Mr. Mathieu controlled the
corporation. There are many documents showing that Mr. Mathieu
signed as director of the corporation. No consideration was given
in return for the $500,000 amount. Mr. Mathieu's story has
varied depending on the interests that he has had to defend.
According to the transcript of Évariste Mathieu's
testimony, filed at Tab 24 of Exhibit A-1, Ms. Boutin
was aware of the transfer. Mr. Mathieu withdrew the money in
1991. The story as to what happened to the amount withdrawn
changes from one proceeding to the next. According to counsel for
the respondent, the best explanation is the following: on
April 30, 1991, $272,000 was deposited into the account
of a corporation of which Ms. Boutin was the principal
shareholder. This $272,000 plus the $150,000 that was security
for the mortgage on the principal residence made a total of
$422,000, which was the amount that remained on the certificate
of deposit. The deposit of $272,000 into the funds of the
corporation of which Ms. Boutin was the principal
shareholder constituted a direct or indirect transfer within the
meaning of section 160 of the Act.
[46]
According to counsel for the respondent, Ms. Boutin could not
have been unaware that she was a joint holder of the account with
her husband. Ms. Boutin was involved in many business
activities. She owned rental property. Furthermore, she could not
have been unaware of the above-mentioned deposit.
[47]
Counsel for the respondent argued that the Minister had acted
with due dispatch. Conforbel was assessed in 1985. The judgment
of the Tax Court of Canada confirming the assessment was issued
in 1993. There was an initial assessment of Ginette Mathieu
Lachapelle in June 1996. From 1994 to 1996, the Minister had
attempted to collect the amount of the assessment from Conforbel.
In December 1997, after discussions with
Ginette Mathieu Lachapelle,
Évariste Mathieu and Carmelle Boutin were
assessed.
[48]
With regard to the interest, counsel for the respondent argued
that interest is calculated on the transferor's tax liability
up to the amount received. In that connection, she referred to
the decision of this Court in Algoa Trust v. The Queen,
T.C.C., No. 96-1186(IT)G, February 23, 1998, (98 DTC 1614),
rendered by Judge Dussault, and in particular to paragraph 6
of that decision:
Thirdly, I would
say that there is no provision of the Act regarding interest that
may be applicable to an assessment issued pursuant to s. 160 of
the Act. This is logical, since there is no new tax debt and an
assessment under s. 160 already incorporates the interest which
the transferor owed in addition to the tax. The assessment may
also incorporate penalties and interest thereon.
Conclusion
[49]
With regard to due dispatch, the facts that were presented do not
lead me to the conclusion that the Minister failed to act with
dispatch. There was no delay in issuing the assessments following
this Court's judgment against Conforbel. In any case, even a
failure to act with due dispatch does not render the assessments
null and void within the meaning of the Act, according to
the decision of the Federal Court of Appeal in Ginsberg
v. Canada, [1996] 3 F.C. 334.
[50]
As regards the inclusion in the subject assessments of the
interest owed by the transferor, Conforbel, on the amount of tax
owed since its 1983 taxation year, I am
of the view that the wording of the above-quoted paragraph 6 from
the decision in Algoa Trust, supra, offers a good
explanation of the position taken by Judge Dussault in that
case. The transferee cannot be assessed for more than the market
value of the transferred asset minus the consideration, but he or
she may be assessed for all of the transferor's tax
liability, including penalties and interest accrued in respect
thereof from the time of the assessment of the transferee. This
calculation is based on the fact that, at the time of the
transfer, the transferee becomes the joint and several debtor of
the transferor's tax liability.
[51]
Counsel for the respondent urged me to be careful in reaching my
decision concerning Ginette Mathieu Lachapelle. It is true that
the certificate was made in her name and that one of the actions
against her parents was brought in her name. However, in both
cases, she corrected her claims. She asked her father to sign the
document reproduced at paragraph 14 of these Reasons. That
document clearly states that the sum in question belonged to
Conforbel. Withdrawals and interest were always accounted for in
the financial statements. The evidence shows no indication that
the appellant acted as an owner in respect of the certificate.
She was a shareholder of Conforbel. She wanted the amounts to
remain the property of Conforbel. She did not personally
appropriate the funds deposited in her name and in the name of
her father. She cannot, therefore, be assessed under
section 160 of the Act. Her appeal is accordingly
allowed.
[52]
With regard to Évariste Mathieu, he behaved at all
times as the real owner of the money. He was the one who had it
at his disposal. He could not understand that it belonged to
Conforbel because it was Conforbel that had negotiated the
agreement with Fitzpatrick and it was Conforbel that had been
paid. He could not make the necessary distinctions.
[53]
In 1988, without telling Ginette
Mathieu Lachapelle, he replaced her name with his spouse's
name. He could do this because he had transferred the money in
1982 to a bank account in his own name. The subsequent actions of
Mr. Mathieu, who had effective control over the corporation, show
that the deposited amount was in reality transferred from
Conforbel to him in 1982. In 1991, the remaining amount was
withdrawn without Conforbel's knowledge. This amount was
therefore not accounted for by Conforbel.
[54]
The transferee did not use the funds in his account immediately
but I do not believe that this is required by section 160.
It was enough that he acted as a transferee
and had the intention to act as an owner.
[55]
Mr. Mathieu exercised control over Conforbel until June 6,
1991. It was in 1988 that Ms. Boutin's name replaced that of
Ginette Mathieu Lachapelle, and it was in April 1991
that the money was withdrawn from the bank account. Conforbel,
which was controlled by Mr. Mathieu, was the transferor in
1982 and in 1988. The transferees were Mr. Mathieu in 1982 and
Carmelle Boutin in 1988.
[56]
There was no documentary evidence as to what happened to the
remaining amount on the certificate. In the circumstances,
counsel for the respondent's suggestion that the amount of
$272,000 that remained after
subtracting the $150,000 used to pay back the mortgage was
deposited in the account of Ms. Boutin's corporation is
the one that appears the most plausible. Thus, Ms. Boutin,
whose name appeared as a transferee on the certificate, acted as
an owner by accepting the deposit of $272,000 into a corporation
of which she was the shareholder. Ms. Boutin did not offer any
explanations as to the source of this amount of $272,000 that
appears on Exhibit AM-6.
[57]
It is thus impossible to accept the appellant's account that
her husband had not told her that the certificate had been placed
in her name in 1988. Furthermore, the
notice of appeal does not mention that the appellant did not know
that she had become the joint holder of the bank
deposit.
[58]
The appeals of Évariste Mathieu and Carmelle Boutin are
dismissed.
Signed at Ottawa, Canada, this 27th day of
February 2001.
"Louise Lamarre
Proulx"
J.T.C.C.
[OFFICIAL ENGLISH
TRANSLATION]
[OFFICIAL ENGLISH TRANSLATION]
97-1245(IT)G
BETWEEN:
GINETTE LACHAPELLE MATHIEU,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Appeal heard on October 18 and 19 and November
3, 2000,
at Montréal, Quebec, by
the Honourable Judge Louise Lamarre
Proulx
Appearances
Counsel for the Appellant:
Michel Poulin
Counsel for the
Respondent:
Johanne M. Boudreau
Stéphane Arcelin
JUDGMENT
The appeal from the assessment made under section 160 of
theIncome Tax Act notice of which bears number 08455
and is dated June 5, 1996, is allowed, with costs, in accordance
with the attached Reasons for Judgment.
Signed at Ottawa, Canada,
this 27th day of February 2001.
J.T.C.C.
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