Citation: 2014 TCC 31
Date: 20140203
Dockets: 2011-396(IT)G
2012-4306(IT)I
BETWEEN:
JACQUES RUEL,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
[OFFICIAL ENGLISH
TRANSLATION]
REASONS FOR JUDGMENT
Tardif J.
[1]
The parties agreed that
the evidence submitted by each be common to both dockets.
Issues
Docket 2011-396(IT)G
[2]
The question to be determined
is the nature of the payments totalling $330,000 made by Yvon Ruel to the appellant,
his brother, in 2006. In other words, were the payments
a loan, which does not have to be included in
computing his income for 2006,
or rather
business income, which is required to be
included in computing his income for 2006 under subsection 9(1) of the Income
Tax Act?
Docket 2012-4306(IT)I
[3]
The question here is
whether the interest of $5,580.50 paid to the appellant by the Caisse populaire
Desjardins in 2007 constitutes income from property that the appellant must
include in computing his income for 2007.
The facts
[4]
Although these are two proceedings
in which the facts are important, one of the parties involved in the juridical act
giving rise to the dispute is deceased; consequently, the factual evidence is
essentially that of the other party thereto, namely, the appellant.
[5]
Only the appellant testified
in support of his appeals. The numerous details contained in his notices of appeal
provide a clear enough picture of the kind of testimony he gave before the
court.
[6]
In order to properly place
the proceedings in their very unique context, I believe it would be useful to reproduce
the notices of appeal and the replies to the notices of appeal in both dockets:
[Translation]
Docket: 2011-396(IT)G
AMENDED NOTICE OF APPEAL (February 1, 2012)
1.
On or about April 3, 2008, the appellant received
from the Canada Revenue Agency a notice of assessment for the 2006 taxation year
dated April 3, 2008, the amount assessed being $38,776.05. An objection to a
notice of assessment dated June 13, 2008, was sent to the Canada Revenue Agency,
whose decision confirming the assessment was rendered on March 20, 2009.
2.
On or about April 11, 2008, the appellant received
from the Canada Revenue Agency a notice of assessment for the 2006 taxation
year dated April 11, 2008, the amount assessed being $2.30. An objection to a notice
of assessment dated June 13 was sent to the Canada Revenue Agency, whose decision
to confirm the assessment was rendered on March 20, 2009.
3.
On or about December 22, 2008, the appellant
received from the Canada Revenue Agency a notice of assessment for the 2007 taxation
year dated December 22, 2008, the amount assessed being $1,091.66. An objection
to a notice of assessment dated March 17, 2009, was sent to the Canada Revenue
Agency, which decided to hold this matter in abeyance pending the determination
for the 2006 taxation year.
4.
On or about January 9, 2009, the appellant received
from the Canada Revenue Agency a notice of assessment for the 2007 taxation
year dated January 9, 2009, the amount assessed being $4.40. An objection to a notice
of assessment dated March 17, 2009, was sent to the Canada Revenue Agency, which
decided to hold this matter in abeyance pending the determination for the 2006
taxation year.
5.
On or about September 24, 2009, the Canada
Revenue Agency made a further reassessment to add in computing the income of
the appellant for the 2006 taxation year $330,000 in income from fees paid by
his brother Yvon Ruel ($170,000 in addition to the $160,000 of April 3, 2008).
A notice of objection dated October 27, 2009, was sent to the Canada Revenue
Agency and the decision to confirm the assessment was rendered on November 17,
2010.
6.
On or about June 7, 2010, a request for directions
was filed before this Court to establish the procedural steps to be completed
for the configuration of the dispute regarding the appellant’s 2006 taxation
year. Following this Court’s decision dated July 9, 2010, on August 17,
2010 the appellant filed a notice of discontinuance. On August 24, 2010, this Court
closed the file pursuant to subsection 16.2(2) of the Tax Court of Canada
Act.
7.
The appellant is therefore appealing the
decision rendered by the Canada Revenue Agency, dated November 17, 2010, putting
the appellant’s income for the 2006 taxation year at $330,000. Attached
hereto are copies of the Notice of Appeal dated February 2, 2011, of the certificate
of service dated February 4, 2011, and of the Reply to the Notice of Appeal
dated June 16, 2011, filed together as Exhibit A1 in support of this appeal.
THE FACTS
8.
The appellant is 60 years of age and a retired Sûreté
du Québec police officer. He is the brother, friend and caregiver of Yvon Ruel.
Since childhood, Yvon Ruel and the appellant have maintained regular,
close and intimate ties, and assisted each other when necessary.
9.
Yvon Ruel was a chartered accountant with the
Government of Quebec. He had serious health issues attested to by his attending
physicians. His employer dismissed him in September 1994 and refused to reinstate
him despite judgments against it. The Honourable Justices of the Court of Appeal
of Quebec characterized the attitude of the Government of Quebec as, and I
quote, [Translation]: "verging
on indecency". By refusing to carry out court orders in the knowledge of
its disproportionate strength and means in that it had access to public funds,
the Government of Quebec declared war and it pursued this primitive form
of justice in bad faith and deliberately caused serious harm to the entire Ruel
family. Their objective was to obtain a discount settlement. This was illegal,
immoral and indecent, and it led to unfortunate and deplorable events. Yvon Ruel
died prematurely on May 26, 2008, when the legal saga and vendetta had yet
to be resolved. Attached hereto are copies of the originating motion with
respect to proceedings seeking a permanent injunction and damages and the motion
for an interlocutory injunction dated August 20, 2003, as well as the judgment on
the motion for an interlocutory injunction rendered by the Honourable Justice
Paul Corriveau dated October 17, 2003, filed together as Exhibit A2 in support
of this appeal.
10.
Since 1990, the appellant had been assisting and
supporting Yvon Ruel in the legal saga and vendetta in which he was embroiled
with his employer (the Government of Quebec) and several other co-defendants.
11.
In January 2003, Yvon Ruel told the appellant that
he had been treated with contempt and wrongfully dismissed by his employer and
that he had been abandoned by his union, his lawyers, his friends, and his family
and that the appellant was the only one who could help him and whom he trusted.
He complained that all of his requests for assistance to the CLSC, legal aid, the
Ombudsman, the media and political representatives had been denied. Yvon Ruel
told the appellant that he wanted to have done with it and that there would be fatalities.
His 3 children and his former spouse, Nicole Leblanc, told the appellant that Yvon Ruel
was the problem and that they wanted nothing to do with him.
12.
Yvon Ruel had been suffering from chronic pain
of the lower limbs that prevented him from sitting for more than 30 consecutive
minutes and from serious psychological problems for a number of years. In January
2003, Yvon Ruel had no financial resources and was in a lamentable psychological
state, with homicidal and suicidal tendencies. At the request of Yvon Ruel
and, under duress and threats, the appellant agreed, to avoid the worst
possible outcome, to give of his time free of charge and to provide out of his
savings the money necessary in order to see Yvon Ruel’s files through. Yvon
Ruel kept saying [Translation]:"You
are all I have, if you abandon me, my bag is full of weapons, I know their addresses
and I’ll go take care of that gang of criminals". The appellant was
convinced, on considering Yvon Ruel’s situation, that he had been the victim of
injustice and that he was right.
13.
The agreement reached in January 2003 was that the
appellant would act gratuitously and that Yvon Ruel would reimburse him for his
costs and expenses. Given the health factor and the bond of friendship between
them, the appellant agreed to let Yvon Ruel stay at his home and to assist him
and support him financially for an indefinite period of time.
14.
In October 2003, the appellant and Yvon Ruel contacted
Revenue Canada and Revenu Québec to obtain complete information about Yvon Ruel’s
case. Revenue Canada and Revenu Québec informed us that, since the appellant is
Yvon Ruel’s brother, since he is not self-employed and since this is a unique
case, they could not accept the appellant’s expenses as a deduction. They
further stated that the appellant’s expenses were not eligible as a deduction for
Yvon Ruel because they were not legal fees.
15.
From June 2003 to the spring of 2007, Yvon Ruel stayed
with the appellant. The appellant and his spouse acted as caregivers, as confirmed
by the judgment of the Honourable Justice Paul Corriveau dated April 22, 2004,
on a declinatory exception pertaining to the domicile of Yvon Ruel, filed as
Exhibit A3.
16.
Between 1993 and 2005, Yvon Ruel underwent a
number of psychological or psychiatric assessments. Two psychiatric expert
reports submitted by Dr. Grégoire in 1993 stated that Yvon Ruel already had
serious psychological and homicidal problems. In October 2005, Yvon Ruel underwent
a psychiatric assessment and in his assessment report, Dr. Pierre Laberge stated
with respect permanent impairment, and I quote, [translation]: “The percentage in this regard varies between 15%
and 45%, and I would put it at 20% for aggravation, spread out over a considerable
number of years, of a pre-existing personal condition initially manifesting itself
through a cessation of work on December 15, 1992, with a diagnosis of an adjustment
disorder with mixed emotional features (anxiety and depression)”. Furthermore, he
stated that Yvon Ruel has mood disorders with episodic outbreaks either of
excitement or aggressiveness or of self-deprecation with risk of suicide, as
described in the expert reports submitted on January 19 and October 5,
1993, by psychiatrist Michel Grégoire, and in the psychosocial report submitted
on March 22, 1997, by psychologist Rachel Clermont, and in the psychiatric
expert report submitted on June 21, 2007, by neurologist Léo Berger, filed
together as Exhibit A4 in support of this appeal.
17.
In order to apply pressure and accelerate the
settlement of the disputes that had dragged on since 1994 and thus avoid placing
the appellant in a potentially difficult situation in the event of failure to
reach an out-of-court settlement, Yvon Ruel prepared various drafts and contracts
relating to possible compensation for the assistance given by the appellant,
and the contracts were kept by Yvon Ruel and Michel Ruel. None of all these contracts
was accepted and they were all abandoned and/or rescinded and/or rejected
and/or ignored because most of them were false.
18.
In early February 2006, without even informing
the appellant, Yvon Ruel transferred $300,000 to the appellant’s bank account
and then Yvon Ruel asked the appellant to act as a straw man with
respect to an amount of $330,000 because, according to him, he was afraid it
would be seized, and on March 1, 2006, an acknowledgement of debt was signed.
He stated that this had to be kept secret and confidential so as to keep
the money safe and thus enable him to bring finality to his files and to buy
himself a few material goods. The money belonged to him, he managed it, he
had control over it, and it was to be used as directed by him, as appears from
the acknowledgement of Jacques Ruel’s indebtedness to Yvon Ruel dated
March 1, 2006, filed as Exhibit A5.
19.
On April 13, 2006, in a report requested from a credit
investigation and collection agency, namely, the Centre d’Enquêtes Civiles du
Québec, Yvon Ruel stated that he had given a loan of $400,000 to an individual
he referred to as a co-worker, as appears from the investigation report by
the Centre d’Enquêtes Civiles, filed as Exhibit A6 in support of this appeal.
20.
On May 23, 2006, in case No. 655-17-0000281-068
of the Superior Court in the District of Baie-Comeau, Yvon Ruel filed
a motion to set aside the seizure before judgment. At paragraph 50 of the said
motion, he indicates that the paid $300,000.00 in fees to the appellant, as
appears from a copy of the said motion filed as Exhibit A7 in support of this
appeal.
21.
The appellant’s savings were used and continue
to be used to bring to an end the saga involving, and the vendetta against, the
Ruel family. The so-called $330,000 loan given by Yvon Ruel to Jacques Ruel
was used to pay the costs related to the various files: more than $50,000 in
lawyer’s fees, more than $60,000.00 in travel, living, paperwork
and computer expenses (this amount represents approximately 50% of the actual
costs incurred) and various cash amounts, including $100,000 paid in the spring
of 2007 to Yvon Ruel, and a chattel mortgage in the amount of $110,000 which
would protect his property from any potential creditor and which allowed him
to purchase various material goods for his sole benefit, as appears from the
copies of invoices and expenses filed together as Exhibit A8 in support of this
appeal.
22.
In the fall of 2006, Yvon Ruel mandated notary Cécile
Lacasse of Ste‑Anne‑des-Monts to draft a mandate in case of incapacity.
The mandate was signed on March 2, 2007, and gave general
power to the appellant to manage and administer, with the powers of an
administrator charged with the full administration of
the property of others, all of the
property of Yvon Ruel. At the request of Yvon
Ruel, none of his children or members of his family were to be involved in the
event of his incapacity or his death and in the event that the appellant and instructed
counsel brought the Ruel case to a conclusion, as appears from a copy of
the mandate in case of incapacity of Yvon Ruel filed as Exhibit A9.
23.
In April 2007, as Yvon Ruel’s condition was
deteriorating, the appellant, at the request of Yvon Ruel, was mandated without
compensation to manage Yvon Ruel’s files. A number of other powers of attorney
or mandates were granted to the appellant in relation to the management of his
property, as appears from a copy of the said mandates and powers of attorney
filed together as Exhibit A10 in support of this appeal.
24.
On May 20, 2007, a meeting was scheduled at the
residence of Benoit Ruel, the son of Yvon Ruel. Those who
were to attend the meeting were the appellant and his spouse Renelle
Michaud, Yvon Ruel and his former spouse Nicole Leblanc, and his 3 children,
Sophie, Josée and Benoit. The purpose of this meeting was to discuss in general
terms the mandate regarding Yvon Ruel’s person and property. Much to the appellant’s
astonishment, Nicole Leblanc and daughter Sophie backed out and did not attend
the meeting. The upshot of the meeting was that neither his daughter Josée
nor his son Benoit wanted to look after their father; their personal lives and activities
came first.
25.
On July 3, 2007, a meeting took place at the Charles Lemoyne Hospital that was attended by the appellant, Yvon Ruel, neurologist Léo
Berger and other members of the medical staff. Stéphanie Chouinard,
Yvon Ruel’s social worker, provided us with a medical report signed by the
neurologist, Léo Berger, which stated that Yvon Ruel had impaired memory
and judgment and emotional problems and that he had risk behaviours. At the
meeting, Dr. Berger advised Yvon Ruel to do whatever was necessary in
the event that his condition worsened and he replied that everything had been
taken care of. Stéphanie Chouinard told the appellant that the 3 children and
former spouse of Yvon Ruel had never contacted him since he was first
hospitalized in May 2007, as appears from the said psychiatric assessment
filed as Exhibit A4 in support of this appeal.
26.
On or about August 3, 2007, the appellant, accompanied
by his spouse, Renelle Michaud, met with Josée Ruel in Rimouski. During
that meeting, Josée Ruel said that she received her share of the money involved
and that it was Sophie Ruel who would be managing the affairs of Yvon Ruel.
27.
On or about August 6, 2007, upon my return from
a few days’ vacation, I was unpleasantly surprised to see that the family dynamic
had changed. His children Sophie and Benoit Ruel and former spouse Nicole
Leblanc isolated Yvon Ruel and refused to allow me to meet with him.
28.
On September 17, 2007, a few days prior to the out-of-court
settlement conference scheduled for September 25, 2007, bailiff Roselle Richard
served on the appellant a letter from mandataries Sophie Ruel and Nicole
Leblanc and a notarized power of attorney, dated August 10, 2007, which revoked,
without providing any reason, all of the appellant’s previous powers of
attorney or mandates, as appears from the copy of the letter of Nicole Leblanc
and Sophie Ruel dated September 13, 2007, and of the power of attorney of
August 10, 2007, signed by Yvon Ruel, filed together as Exhibit A11 in support
of this appeal.
29.
On or about September 18, 2007, during a telephone
conversation he had with Sophie Ruel, she said something surprising; she
asked the appellant to cancel unconditionally the chattel mortgage and stated
that the appellant had no contracts with her father. She further stated that
she no longer wished to attend the out-of-court settlement conference and that
he should deal with his problems himself.
30.
On or about September 18, 2007, the mandataries
of Yvon Ruel terminated the mandate of Daniel M. Fabien, counsel for Yvon
Ruel and the appellant and cancelled the out-of-court settlement conference
scheduled for September 25, 2007, despite the fact that the lawyer had been
paid in advance, that Yvon Ruel had signed the request for judicial mediation
and that for almost 13 years Yvon Ruel had been complaining that he was a victim
caught up in a legal saga. In doing so, they put Yvon Ruel and the appellant
in a vulnerable position because the saga and the trial might prove to be long
and very costly and would put the Government of Quebec and the co-defendants in
an awkward and very uncomfortable position.
31.
On September 24, 2007, Yvon Ruel, while
incapacitated, went to the Longueuil police station, accompanied by his
daughter and mandatary Sophie Ruel, and filed against the appellant a complaint
of theft of a motor vehicle and fraud. Yvon Ruel told the investigator that
he had paid the appellant $160,000 in fees. After investigation, Detective
Sergeant David Castonguay informed the appellant that the complaints were
unfounded and suggested that he lodge a complaint of public mischief in the
matter. It was an attack on the appellant’s reputation, an utterly underhanded,
dishonest act committed in bad faith, as appears from a copy of the report
on the theft and fraud complaint filed with the Longueuil police service on September
24, 2007, and from the correspondence of Julie Sénéchal dated November 26, 2007,
addressed to Jacques Ruel, filed together as Exhibit A12 in support of this
appeal.
32.
On November 19, 2007, having been summoned to
appear in the Superior Court in Baie‑Comeau in the case bearing docket number
655-17-0000281-068, Yvon Ruel was absent, although he and the appellant were
being sued for several hundred thousand dollars by his former counsel, Jean Blouin.
The appellant, who was a party to the proceeding, had to take on alone
the management of the files at a time when his mandates had been cancelled and he
had been left to his fate by Yvon Ruel’s mandataries.
33.
Deleted.
34.
At the request of Yvon Ruel, the appellant had
been storing Yvon Ruel’s property free of charge since 2003. The appellant
looked after Yvon Ruel’s property by insuring it and storing it appropriately
at his home and at the Ross warehouse in Cap‑Chat. On or about September
18, 2007, the appellant informed mandataries Nicole Leblanc and Sophie
Ruel of the terms of the chattel mortgage which required that the property be
insured. Sophie Ruel, Yvon Ruel’s mandatary, subsequently decided to cancel
the insurance on the property of Yvon Ruel that was stored in Cap-Chat, without
notifying the appellant, thus leaving the appellant open to potential legal
action since the appellant had signed a contract with the Ross warehouse and
provided a guarantee that the property was insured, and this in spite of the
conditions stated in the chattel mortgage, as appears from a copy of the letter
of Jacques Ruel dated January 31, 2008, to Sophie Ruel and Nicole
Leblanc, filed as Exhibit A13.
35.
Yvon Ruel managed his files and he had the originals
and copies of the documents. In the fall of 2007, the appellant contacted Yvon
Ruel and Michel Ruel in order to obtain the original of the contract of
December 17, 2005, and of the agreement of March 1, 2006 with respect to the
loan of $330,000. They refused to provide them and told him that they had
destroyed them.
36.
In December 2007, given the inability of mandataries
Nicole Leblanc and Sophie Ruel to manage the files of Yvon Ruel, the appellant sought
assistance from the Public Curator of Quebec, notwithstanding he was in a possible
conflict of interest, as appears from a copy of the letter dated December 6,
2007, to Aline St-Onge, Public Curator of Quebec, and of the letter dated
December 7, 2007, to Yvon Ruel, Sophie Ruel and Nicole Leblanc, filed together
as Exhibit A14 in support of this appeal.
37.
The appellant offered his assistance to the Public
Curator of Quebec and Yvon Ruel’s mandataries so as to bring finality to the files.
He informed them that the Government of Quebec owed Yvon Ruel more than one
million dollars. At no time did the Public Curator of Quebec or Yvon Ruel’s mandataries
ask the appellant for any explanations regarding the amount of $330,000; they preferred instead confrontation with the appellant,
seeking a tax exemption for their client, Yvon Ruel, when that amount was never
paid to the appellant as compensation but was rather used with respect to Yvon
Ruel’s property, as appears from a copy of the letter dated January 16,
2008, from François Bérubé, counsel for Jacques Ruel, to Marc Bergeron,
Public Curator of Quebec, filed as Exhibit A15 in support of this appeal.
38.
On May 28, 2008, the appellant met with his
family doctor, Dr. Lavigueur, and the day after with psychiatrist Edouard
Bastrami of the CLSC in Ste‑Anne-des-Monts. The appellant was diagnosed
with major depression. The appellant immediately informed his lawyer, François
Bérubé, thereof on May 29, 2008.
39.
On June 13, 2008, an agreement was reached during
an out-of-court settlement conference at the Quebec City courthouse which definitively
resolved all of the disputes. The parties obtained a discount settlement. Given
the facts and circumstances, the appellant renounced all forms of financial
compensation despite the fact that Yvon Ruel did not honour the agreement of
January 2003 that he had entered into with the appellant. The declaration of out-of-court
settlement and release of June 13, 2008 gives final release for the present,
past and future with respect to the $330,000, owing to the fact that it had
been used up, as appears from a copy of the declaration of out-of-court settlement
and release of June 13, 2008, filed as Exhibit A16 in support of this
appeal.
40.
Upon his return from the out-of-court settlement
conference of June 13, 2008, much to his surprise, the appellant received on
or about June 14, 2008, by registered mail, from Michel Ruel the original
of the contract of December 17, 2005, and the original of the agreement of
March 1, 2006, with regard to the loan of $330,000, although Michel Ruel and
Yvon Ruel had told the appellant that they had destroyed them. They acted in
bad faith, underhandedly and dishonestly. The appellant immediately informed
his lawyer, François Bérubé, as appears from a copy of the envelope and
of Jacques Ruel’s acknowledgment of his debt to Yvon Ruel, filed together as
Exhibit A17 in support of this appeal.
41.
On August 27, 2008, while the appellant,
Jacques Ruel, and Mr. Bergeron, the Public Curator, were executing the out-of-court
settlement agreement of June 13, 2008, the appellant received a letter from
Jocelyne Loyer, trustee of the Direction de l’administration des patrimoines requesting
that the appellant, Jacques Ruel, sign a misleading document stating, and I
quote, [Translation]:
“The motor vehicle described above to Jacques Ruel against his debt by the Public
Curator, acting in his official capacity, to Yvon Ruel, as set out in the terms
and conditions of the release attached hereto. The amount of the transfer is
‘FREE’”. Following discussions with Mr. Bergeron, the Public Curator, there
was a retraction in the letter of September 10, 2008, such that the text
read as follows: [Translation]
“The motor vehicle described above was assigned by the Public Curator, acting in
his official capacity, to Yvon Ruel, as set out in the terms and conditions of
the release attached hereto. The amount of the transfer is ‘FREE’”. During the
execution of the agreement there had already been attempts to deceive the appellant
Jacques Ruel and this Court. A copy of the letters of August 27 and September 10,
2008, and copies of the "ROAD VEHICLE TRANSFER” forms are filed together
as Exhibit A18 in support of this appeal.
42.
Despite the information that was exchanged with the
tax authorities at both levels and the particular circumstances of this vendetta
and legal saga and despite the fact that the costs and expenses are not deductible,
Revenue Canada is attempting to impose taxation on the so-called loan of
$330,000 allegedly made on March 1, 2008, by Yvon Ruel to the
appellant. This is an abuse of rights, power and process.
ISSUES AND GROUNDS OF APPEAL
43.
As mentioned in paragraph 14, we were
informed by both levels of government that they could not allow the appellant’s
expenses relating to the Yvon Ruel saga as a deduction and that the appellant’s
expenses are not eligible as a deduction for Yvon Ruel on the ground that they
are not legal expenses. This notice of assessment is contrary to the
information provided and their own claims.
44.
There was never any question of $330,000 in
compensation being paid to the appellant. The claim in that regard is contrary
to the agreement between the appellant and his brother, Yvon Ruel, as the
appellant acted gratuitously and it was agreed that Yvon Ruel would
reimburse him for the costs and expenses he incurred. It is also inconsistent
with the so-called loan of $330,000 of March 1, 2006. It is also contrary
to all of the claims of Yvon Ruel, the estate and the respondent that it was
compensation. A number of points are in issue and they are surprising: Why file
a complaint of theft and fraud on September 27, 2007, with the Longueuil police
service if it was compensation? Why not claim the $330,000 if it was a loan? Why
are there so many versions regarding the amount and possible use? Why come back
before this Court when the out-of-court settlement and release agreement of
June 13, 2008, gives final release for the past, present and future? Why
attempt, as mentioned in paragraph 41, to mislead the appellant and this Court by
having the appellant sign documents that do not reflect the truth and which
attempt to distort it, and then turn around and make it conform to the final
agreement of June 13, 2008? Why use this Court to obtain what they were unable
to obtain at the out-of-court settlement conference of June 13, 2008?
45.
In early February 2006, without even
informing the appellant, Yvon Ruel transferred $300,000 to the appellant’s bank
account and then asked the appellant to act as a straw man with respect to an
amount of $330,000, and on March 1, 2006, an acknowledgement of debt was signed.
The $330,000 was given in the form of a loan and
was accompanied by an acknowledgement of debt. The money belonged to Yvon Ruel,
and he managed it, had control over it, and used it as he saw fit according to his
needs. For these reasons, the appellant is of the view that he should not be taxed
on any part of the loan because to tax him would be contrary to all common
sense and all laws. The amount was used up by Yvon Ruel for his sole benefit.
46.
As mentioned in paragraph 6, the government
acted illegally. By refusing to carry out court orders in the knowledge of its
disproportionate strength and means in that it had access to public funds, the
Government of Quebec pursued this primitive form of justice in bad faith and
deliberately caused serious harm to the entire Ruel family, particularly Yvon
Ruel, who died prematurely as a result. Their objective was to obtain a
discount settlement. This was immoral and indecent and it led to unfortunate
and deplorable events which have brought us before this court. The Government
of Quebec and the various stakeholders are attempting to punish appellant,
Jacques Ruel. They are attempting to obtain what they were unable to obtain at
the settlement conference of June 13, 2008, and/or legally.
47.
An amount of $25,000 and some tangible
property were awarded to the appellant in personal damages, for trouble and
inconvenience and as compensation for the significant and continuing psychological
after-effects that this legal saga has had for him. The appellant suffers from
deep depression and regularly sees a psychologist to alleviate the trauma he
has suffered. In addition, the appellant must devote his retirement time and
his assets to defending himself.
REPLY TO THE AMENDED NOTICE OF
APPEAL (February 1, 2012)
In reply to the Amended Notice of Appeal (February 1,
2012) with respect to the 2006 taxation year, the Deputy Attorney General of
Canada says:
A. STATEMENT
OF FACTS
1.
With respect to paragraphs 1 and 6 of the
Amended Notice of Appeal (February 1, 2012), he specifies that
following the reassessment made by the Minister of National Revenue on September
24, 2009, for the appellant’s 2006 taxation year, the assessment of April 3,
2008, for that same taxation year of the appellant is no longer valid and is
therefore not at issue in this appeal.
2.
His understanding of paragraph 7 of the Amended
Notice of Appeal (February 1, 2012) is that the appeal concerns solely the
reassessment made by the Minister of National Revenue on September 24,
2009, for the appellant’s 2006 taxation year, and that, therefore, the
assessments referred to in paragraphs 2, 3 and 4 of the Notice of Appeal are
not at issue in this appeal.
His
understanding is also that the appellant is seeking only to have the
reassessment made by the Minister of National Revenue on September 24, 2009,
for the appellant’s 2006 taxation year vacated.
3.
With respect to paragraph 5 of the Amended
Notice of Appeal (February 1, 2012), he admits that on September 24, 2009, the
Minister of National Revenue issued a reassessment for the appellant’s 2006
taxation year, that the appellant objected to it and that the Minister
confirmed it. As regards the other facts alleged in that paragraph, he relies
on the reassessment of September 24, 2009.
4.
He has no knowledge of the facts alleged in
paragraphs 8 to 42 of the Amended Notice of Appeal (February 1, 2012) and does
not admit them. However, he adds that
•
in 2006, the appellant was 55 years old and not
60 as indicated in paragraph 8 of the Amended Notice of Appeal (February 1,
2012);
•
there are errors in the paragraph numbering in
the Notice of Appeal as it has two paragraphs numbered “7”, which has been
corrected in the Amended Notice of Appeal (February 1, 2012);
•
the text indicated as being “deleted” at
paragraph 33 of the Amended Notice of Appeal (February 1, 2012) is the text of paragraph
32 of the Notice of Appeal.
5.
He takes note of the arguments made by the
appellant at paragraphs 43 to 47 of the Amended Notice of Appeal (February 1,
2012).
6.
By notice of reassessment dated September 24, 2009,
for the 2006 taxation year, the Minister of National Revenue, in computing the
appellant’s income, added as business income fees of $330,000 received for
consulting services provided to his brother, Yvon Ruel.
7.
In determining the appellant’s tax payable for
the 2006 taxation year, the Minister of National Revenue relied on the
following assumptions of fact:
(a) For a number of years, there had been a dispute between Yvon
Ruel, the appellant’s brother, and his former employer, the Government of
Quebec (Inspecteur général des institutions financiers, subsequently becoming
the Registraire des entreprises).
(b) Yvon Ruel retained the appellant’s services as a consultant
to help him settle the dispute, and the most recent services agreement to that effect
between them was entered into in December 2005.
(c) The appellant agreed that his remuneration would be based only
on a percentage of 40% of the net amount that Yvon Ruel would receive from the
settlement of the dispute; that net amount was not defined in the agreement
referred to in the preceding paragraph.
(d) In 2006, Yvon Ruel received $794,495.28 from his former
employer who issued him a T4 slip which showed, among other things, employment
income of $794,495.28, a source deduction of $1,910.70 for QPP employee
contributions and a source deduction of $596.70 for EI employee contributions.
(e) On February 21, 2006, Yvon Ruel paid the appellant fees of $160,000
for services rendered.
(f) On March 1, 2006, Yvon Ruel paid the appellant fees of $170,000
for services rendered.
(g) In computing his income for the 2006 taxation year, Yvon
Ruel, the appellant’s brother, claimed a deduction for these fees of $330,000 paid
to the appellant, and the Minister of National Revenue allowed that deduction.
B. ISSUE
8.
Whether the appellant must include as business
income in computing his income for the 2006 taxation year the amounts of $160,000
and $170,000 that his brother, Yvon Ruel, paid to him in 2006.
C. STATUTORY PROVISIONS, GROUNDS RELIED ON AND RELIEF SOUGHT
9.
The Deputy Attorney General of Canada relies
particularly on section 3 and subsection 9(1) of the Income Tax Act, R.S.C.
1985, c. 1 (5th Supp.), in its version applicable to this case.
10.
He submits that the appellant rendered remunerated
consulting services to his brother, Yvon Ruel, in relation to the dispute
between Yvon Ruel and his former employer.
11.
He submits that in 2006 Yvon Ruel received $794,495.28 from
his former employer in settlement of the dispute between them.
12.
He submits that the net amount referred to in
the agreement entered into between the appellant and his brother, Yvon Ruel, in
December 2005 is $791,987.88, that is, the payment of $794,495.28 less the source
deductions for QPP and EI employee contributions ($2,507.40).
13.
He submits that the amounts totalling $330,000 that
Yvon Ruel paid to the appellant in 2006 are slightly higher than 40% of the net
amount (40% x $791,987.88 = $316,795.15).
14.
He submits that the appellant therefore received
from his brother, Yvon Ruel, in 2006, $330,000 in fees for services rendered
and that he is required to include those fees in his income for the 2006
taxation year as business income.
Docket: 2012-4306(IT)I
NOTICE OF APPEAL
1.
On or about December 22, 2008, the appellant
received from the Canada Revenue Agency a notice of assessment for the 2007
taxation year dated December 22, 2008, for the amount of $1,091.66. An
objection to this notice of assessment, dated March 17, 2009, was sent to
the Canada Revenue Agency, whose decision confirming the assessment was
rendered on August 6, 2012.Copies of the notice of assessment dated December 22,
2008, the notice of objection dated March 17, 2009, and the reply to the
notice of confirmation dated August 6, 2012 are filed together as Exhibit
A1 in support of this appeal.
THE FACTS
2. The appellant is 60 years of age and a retired Sûreté du
Québec police officer. He is the brother, friend and caregiver of Yvon Ruel.
Since childhood, Yvon Ruel and the appellant have maintained regular,
close and intimate ties, and assisted each other when necessary.
3. Yvon Ruel was a chartered accountant with the Government of
Quebec. He had serious health issues attested to by his attending physicians.
His employer dismissed him in September 1994 and refused to reinstate him
despite judgments against it. The Honourable Justices of the Court of Appeal of
Quebec characterized the attitude of the Government of Quebec as, and I quote,
[Translation]: "verging on
indecency". By refusing to carry out court orders in the knowledge of its
disproportionate strength and means in that it had access to public funds, the
Government of Quebec declared war and it pursued this primitive form of justice
in bad faith and deliberately caused serious harm to the entire Ruel family.
Their objective was to obtain a discount settlement. This was illegal, immoral
and indecent, and it led to unfortunate and deplorable events. Yvon Ruel died
prematurely on May 26, 2008, when the legal saga and vendetta had yet to
be resolved. Attached hereto are copies of the originating motion with respect
to proceedings seeking a permanent injunction and damages and the motion for an
interlocutory injunction dated August 20, 2003, as well as the judgment on the
motion for an interlocutory injunction rendered by the Honourable Justice Paul
Corriveau dated October 17, 2003, filed together as Exhibit A2 in support of this
appeal.
4. Since 1990, the appellant had been assisting and supporting
Yvon Ruel in the legal saga and vendetta in which he was embroiled with his
employer (the Government of Quebec) and several other co-defendants.
5. In January 2003, Yvon Ruel told the appellant that he had
been treated with contempt and wrongfully dismissed by his employer and that he
had been abandoned by his union, his lawyers, his friends and his family and
that the appellant was the only one who could help him and whom he trusted. He
complained that all of his requests for assistance to the CLSC, legal aid, the
Ombudsman, the media and political representatives had been denied.
Yvon Ruel told the appellant that he wanted to have done with it and that
there would be fatalities. His 3 children and his former spouse, Nicole Leblanc,
told the appellant that Yvon Ruel was the problem and that they wanted
nothing to do with him.
6. Yvon Ruel had been suffering from chronic pain of the lower
limbs that prevented him from sitting for more than 30 consecutive minutes and
from serious psychological problems for a number of years. In January 2003,
Yvon Ruel had no financial resources and was in a lamentable psychological
state, with homicidal and suicidal tendencies. At the request of Yvon Ruel
and, under duress and threats, the appellant agreed, to avoid the worst
possible outcome, to give of his time free of charge and to provide out of his
savings the money necessary in order to see Yvon Ruel’s files through. Yvon
Ruel kept saying [Translation]:"You
are all I have, if you abandon me, my bag is full of weapons, I know their
addresses and I’ll go take care of that gang of criminals". The appellant
was convinced, on considering Yvon Ruel’s situation, that he had been the
victim of injustice and that he was right.
7. The agreement reached in January 2003 was that the appellant
would act gratuitously and that Yvon Ruel would reimburse him for his costs and
expenses. Given the health factor and the bond of friendship between them, the
appellant agreed to let Yvon Ruel stay at his home and to assist him and
support him financially for an indefinite period of time.
8. In October 2003, the appellant and Yvon Ruel contacted
Revenue Canada and Revenu Québec to obtain complete information about
Yvon Ruel’s case. Revenue Canada and Revenu Québec informed us that, since
the appellant is Yvon Ruel’s brother, since he is not self-employed and since this
is a unique case, they could not accept the appellant’s expenses as a deduction.
They further stated that the appellant’s expenses were not eligible as a
deduction for Yvon Ruel because they were not legal fees.
9. From June 2003 to the spring of 2007, Yvon Ruel stayed with
the appellant. The appellant and his spouse acted as caregivers, as confirmed
by the judgment of the Honourable Justice Paul Corriveau dated April
22, 2004, on a declinatory exception pertaining to the domicile of Yvon
Ruel, filed as Exhibit A3.
10. Between 1993 and 2005, Yvon Ruel underwent a number of
psychological or psychiatric assessments. Two psychiatric expert reports
submitted by Dr. Grégoire in 1993 stated that Yvon Ruel already had serious
psychological and homicidal problems. In October 2005, Yvon Ruel underwent
a psychiatric assessment and in his assessment report, Dr. Pierre Laberge
stated with respect permanent impairment, and I quote, [translation]: “The percentage in this regard varies between
15% and 45%, and I would put it at 20% for aggravation, spread out over a
considerable number of years, of a pre-existing personal condition initially
manifesting itself through a cessation of work on December 15, 1992, with a
diagnosis of an adjustment disorder with mixed emotional features (anxiety and
depression)”. Furthermore, he stated that Yvon Ruel has mood disorders with
episodic outbreaks either of excitement or aggressiveness or of
self-deprecation with risk of suicide, as described in the expert reports
submitted on January 19 and October 5, 1993, by psychiatrist Michel
Grégoire, and in the psychosocial report submitted on March 22, 1997, by
psychologist Rachel Clermont, and in the psychiatric expert report submitted on
June 21, 2007, by neurologist Léo Berger, filed together as Exhibit A4 in
support of this appeal.
11. In order to apply pressure and accelerate the settlement of
the disputes that had dragged on since 1994 and thus avoid placing the
appellant in a potentially difficult situation in the event of failure to reach
an out-of-court settlement, Yvon Ruel prepared various drafts and contracts relating
to possible compensation for the assistance given by the appellant, and the
contracts were kept by Yvon Ruel and Michel Ruel. None of all these contracts
was accepted and they were all abandoned and/or rescinded and/or rejected
and/or ignored because most of them were false.
12. In early February 2006, without even informing the appellant,
Yvon Ruel transferred $300,000 to the appellant’s bank account and then
Yvon Ruel asked the appellant to act as a straw man with respect
to an amount of $330,000 because, according to him, he was afraid it would be
seized, and on March 1, 2006, an acknowledgement of debt was signed. He stated
that this had to be kept secret and confidential so as to keep the money safe
and thus enable him to bring finality to his files and to buy himself a few material
goods. The money belonged to him, he managed it, he had control over it, and it
was to be used as directed by him, as appears from the acknowledgement of
Jacques Ruel’s indebtedness to Yvon Ruel dated March 1, 2006, filed
as Exhibit A5.
13. On April 13, 2006, in a report requested from a credit investigation
and collection agency, namely, the Centre d’Enquêtes Civiles du Québec,
Yvon Ruel stated that he had given a loan of $400,000 to an
individual he referred to as a co-worker, as appears from the investigation
report by the Centre d’Enquêtes Civiles, filed as Exhibit A6 in support of this
appeal.
14. On May 23, 2006, in case No. 655-17-0000281-068 of the
Superior Court in the District of Baie-Comeau, Yvon Ruel filed a motion to
set aside the seizure before judgment. At paragraph 50 of the said motion, he
indicates that the paid $300,000.00 in fees to the appellant, as appears
from a copy of the said motion filed as Exhibit A7 in support of this appeal.
15. The appellant’s savings were used and continue to be used to
bring to an end the saga involving, and the vendetta against, the Ruel family. The
so-called $330,000 loan given by Yvon Ruel to Jacques Ruel was used
to pay the costs related to the various files: more than $50,000 in lawyer’s
fees, more than $60,000.00 in travel, living, paperwork and computer
expenses (this amount represents approximately 50% of the actual costs
incurred) and various cash amounts, including $100,000 paid in the spring of 2007
to Yvon Ruel, and a chattel mortgage in the amount of $110,000 which would
protect his property from any potential creditor and which allowed him
to purchase various material goods for his sole benefit, as appears from the
copies of invoices and expenses filed together as Exhibit A8 in support of this
appeal.
16. In the fall of 2006, Yvon Ruel mandated notary Cécile Lacasse
of Ste‑Anne‑des-Monts to draft a mandate in case of incapacity. The
mandate was signed on March 2, 2007, and gave general
power to the appellant to manage and administer, with the powers of an
administrator charged with the full administration of
the property of others, all of the property of
Yvon Ruel. At the request of Yvon Ruel, none of his children or members of
his family were to be involved in the event of his incapacity or his death and in
the event that the appellant and instructed counsel brought the Ruel
case to a conclusion, as appears from a copy of the mandate in case of
incapacity of Yvon Ruel filed as Exhibit A9.
17. In April 2007, as Yvon Ruel’s condition was deteriorating, the
appellant, at the request of Yvon Ruel, was mandated without compensation to
manage Yvon Ruel’s files. A number of other powers of attorney or mandates were
granted to the appellant in relation to the management of his property, as
appears from a copy of the said mandates and powers of attorney filed together
as Exhibit A10 in support of this appeal.
18. On May 20, 2007, a meeting was scheduled at the residence of Benoit Ruel,
the son of Yvon Ruel. Those who were to attend the meeting were the
appellant and his spouse Renelle Michaud, Yvon Ruel and his former spouse
Nicole Leblanc, and his 3 children, Sophie, Josée and Benoit. The purpose of
this meeting was to discuss in general terms the mandate regarding
Yvon Ruel’s person and property. Much to the appellant’s astonishment,
Nicole Leblanc and daughter Sophie backed out and did not attend the meeting. The
upshot of the meeting was that neither his daughter Josée nor his son Benoit
wanted to look after their father; their personal lives and activities came
first.
19. On July 3, 2007, a meeting took place at the Charles Lemoyne
Hospital that was attended by the appellant, Yvon Ruel, neurologist Léo
Berger and other members of the medical staff. Stéphanie Chouinard,
Yvon Ruel’s social worker, provided us with a medical report signed by the
neurologist, Léo Berger, which stated that Yvon Ruel had impaired memory
and judgment and emotional problems and that he had risk behaviours. At the
meeting, Dr. Berger advised Yvon Ruel to do whatever was necessary in
the event that his condition worsened and he replied that everything had been
taken care of. Stéphanie Chouinard told the appellant that the 3 children and
former spouse of Yvon Ruel had never contacted him since he was first
hospitalized in May 2007, as appears from the said psychiatric assessment filed
as Exhibit A4 in support of this appeal.
20. On or about August 3, 2007, the appellant, accompanied by his
spouse, Renelle Michaud, met with Josée Ruel in Rimouski. During that
meeting, Josée Ruel said that she received her share of the money involved and
that it was Sophie Ruel who would be managing the affairs of
Yvon Ruel.
21. On or about August 6, 2007, upon my return from a few days’
vacation, I was unpleasantly surprised to see that the family dynamic had
changed. His children Sophie and Benoit Ruel and former spouse Nicole Leblanc
isolated Yvon Ruel and refused to allow me to meet with him.
22. On September 17, 2007, a few days prior to the out-of-court settlement
conference scheduled for September 25, 2007, bailiff Roselle Richard served on
the appellant a letter from mandataries Sophie Ruel and Nicole Leblanc and a
notarized power of attorney, dated August 10, 2007, which revoked, without
providing any reason, all of the appellant’s previous powers of attorney or
mandates, as appears from the copy of the letter of Nicole Leblanc and Sophie
Ruel dated September 13, 2007, and of the power of attorney of August 10, 2007,
signed by Yvon Ruel, filed together as Exhibit A11 in support of this appeal.
23. On or about September 18, 2007, during a telephone
conversation he had with Sophie Ruel, she said something surprising; she
asked the appellant to cancel unconditionally the chattel mortgage and stated
that the appellant had no contracts with her father. She further stated that
she no longer wished to attend the out-of-court settlement conference and that
he should deal with his problems himself.
24. On or about September 18, 2007, the mandataries of
Yvon Ruel terminated the mandate of Daniel M. Fabien, counsel for Yvon
Ruel and the appellant and cancelled the out-of-court settlement conference
scheduled for September 25, 2007, despite the fact that the lawyer had been
paid in advance, that Yvon Ruel had signed the request for judicial
mediation and that for almost 13 years Yvon Ruel had been complaining that
he was a victim caught up in a legal saga. In doing so, they put Yvon Ruel
and the appellant in a vulnerable position because the saga and the trial might
prove to be long and very costly and would put the Government of Quebec and the
co-defendants in an awkward and very uncomfortable position.
25. On September 24, 2007, Yvon Ruel, while incapacitated,
went to the Longueuil police station, accompanied by his daughter and mandatary
Sophie Ruel, and filed against the appellant a complaint of theft of a motor
vehicle and fraud. Yvon Ruel told the investigator that he had paid the
appellant $160,000 in fees. After investigation, Detective Sergeant David
Castonguay informed the appellant that the complaints were unfounded and
suggested that he lodge a complaint of public mischief in the matter. It was an
attack on the appellant’s reputation, an utterly underhanded, dishonest act committed
in bad faith, as appears from a copy of the report on the theft and fraud
complaint filed with the Longueuil police service on September 24, 2007, and
from the correspondence of Julie Sénéchal dated November 26, 2007, addressed to
Jacques Ruel, filed together as Exhibit A12 in support of this appeal.
26. On November 19, 2007, having been summoned to appear in the
Superior Court in Baie‑Comeau in the case bearing docket number
655-17-0000281-068, Yvon Ruel was absent, although he and the appellant
were being sued for several hundred thousand dollars by his former counsel,
Jean Blouin. The appellant, who was a party to the proceeding, had
to take on alone the management of the files at a time when his mandates had
been cancelled and he had been left to his fate by Yvon Ruel’s mandataries.
27. At the request of Yvon Ruel, the appellant had been storing
Yvon Ruel’s property free of charge since 2003. The appellant looked after
Yvon Ruel’s property by insuring it and storing it appropriately at his
home and at the Ross warehouse in Cap‑Chat. On or about September 18,
2007, the appellant informed mandataries Nicole Leblanc and Sophie Ruel of
the terms of the chattel mortgage which required that the property be insured.
Sophie Ruel, Yvon Ruel’s mandatary, subsequently decided to cancel the
insurance on the property of Yvon Ruel that was stored in Cap-Chat, without
notifying the appellant, thus leaving the appellant open to potential legal
action since the appellant had signed a contract with the Ross warehouse and
provided a guarantee that the property was insured, and this in spite of the
conditions stated in the chattel mortgage, as appears from a copy of the letter
of Jacques Ruel dated January 31, 2008, to Sophie Ruel and Nicole
Leblanc, filed as Exhibit A13.
28. Yvon Ruel managed his files and he had the originals and
copies of the documents. In the fall of 2007, the appellant contacted Yvon Ruel
and Michel Ruel in order to obtain the original of the contract of
December 17, 2005, and of the agreement of March 1, 2006 with respect to the
loan of $330,000. They refused to provide them and told him that they had
destroyed them.
29. In December 2007, given the inability of mandataries Nicole
Leblanc and Sophie Ruel to manage the files of Yvon Ruel, the appellant sought
assistance from the Public Curator of Quebec, notwithstanding he was in a
possible conflict of interest, as appears from a copy of the letter dated
December 6, 2007, to Aline St-Onge, Public Curator of Quebec, and of the letter
dated December 7, 2007, to Yvon Ruel, Sophie Ruel and Nicole Leblanc, filed
together as Exhibit A14 in support of this appeal.
30. The appellant offered his assistance to the Public Curator of
Quebec and Yvon Ruel’s mandataries so as to bring finality to the files. He
informed them that the Government of Quebec owed Yvon Ruel more than one
million dollars. At no time did the Public Curator of Quebec or Yvon Ruel’s mandataries
ask the appellant for any explanations regarding the amount of $330,000; they preferred instead confrontation with the appellant,
seeking a tax exemption for their client, Yvon Ruel, when that amount was never
paid to the appellant as compensation but was rather used with respect to Yvon
Ruel’s property, as appears from a copy of the letter dated January 16,
2008, from François Bérubé, counsel for Jacques Ruel, to
Marc Bergeron, Public Curator of Quebec, filed as Exhibit A15 in support
of this appeal.
31. On May 28, 2008, the appellant met with his family doctor,
Dr. Lavigueur, and the day after with psychiatrist Edouard Bastrami of the
CLSC in Ste‑Anne-des-Monts. The appellant was diagnosed with major
depression. The appellant immediately informed his lawyer, François Bérubé,
thereof on May 29, 2008.
32. On June 13, 2008, an agreement was reached during an
out-of-court settlement conference at the Quebec City courthouse which
definitively resolved all of the disputes. The parties obtained a discount
settlement. Given the facts and circumstances, the appellant renounced all
forms of financial compensation despite the fact that Yvon Ruel did not honour
the agreement of January 2003 that he had entered into with the appellant. The
declaration of out-of-court settlement and release of June 13, 2008 gives final
release for the present, past and future with respect to the $330,000, owing to
the fact that it had been used up, as appears from a copy of the
declaration of out-of-court settlement and release of June 13, 2008, filed as
Exhibit A16 in support of this appeal.
33. Upon his return from the out-of-court settlement conference of
June 13, 2008, much to his surprise, the appellant received on or about June
14, 2008, by registered mail, from Michel Ruel the original of the
contract of December 17, 2005, and the original of the agreement of March 1,
2006, with regard to the loan of $330,000, although Michel Ruel and Yvon
Ruel had told the appellant that they had destroyed them. They acted in bad
faith, underhandedly and dishonestly. The appellant immediately informed his
lawyer, François Bérubé, as appears from a copy of the envelope and of
Jacques Ruel’s acknowledgment of his debt to Yvon Ruel, filed together as
Exhibit A17 in support of this appeal.
34. On August 27, 2008, while the
appellant, Jacques Ruel, and Mr. Bergeron, the Public Curator, were executing
the out-of-court settlement agreement of June 13, 2008, the appellant received
a letter from Jocelyne Loyer, trustee of the Direction de l’administration des
patrimoines requesting that the appellant, Jacques Ruel, sign a misleading
document stating, and I quote, [Translation]:
“The motor vehicle described above to Jacques Ruel against his debt by the
Public Curator, acting in his official capacity, to Yvon Ruel, as set out in
the terms and conditions of the release attached hereto. The amount of the
transfer is ‘FREE’”. Following discussions with Mr. Bergeron, the Public
Curator, there was a retraction in the letter of September 10, 2008, such
that the text read as follows: [Translation]
“The motor vehicle described above was assigned by the Public Curator,
acting in his official capacity, to Yvon Ruel, as set out in the terms and
conditions of the release attached hereto. The amount of the transfer is
‘FREE’”. During the execution of the agreement there had already been attempts
to deceive the appellant Jacques Ruel and this Court. A copy of the letters of
August 27 and September 10, 2008, and copies of the "ROAD VEHICLE TRANSFER”
forms are filed together as Exhibit A18 in support of this appeal.
35. Despite the information that was exchanged with the tax
authorities at both levels and the particular circumstances of this vendetta
and legal saga and despite the fact that the costs and expenses are not
deductible, Revenue Canada is attempting to impose taxation on the so-called
loan of $330,000 allegedly made on March 1, 2008, by Yvon Ruel to
the appellant. This is an abuse of rights, power and process.
ISSUES AND GROUNDS OF APPEAL
36. As mentioned in paragraph 14, we were informed by both levels
of government that they could not allow the appellant’s expenses relating to
the Yvon Ruel saga as a deduction and that the appellant’s expenses are not
eligible as a deduction for Yvon Ruel on the ground that they are not legal
expenses. This notice of assessment is contrary to the information provided and
their own claims.
37. There was never any question of $330,000 in compensation being
paid to the appellant. The claim in that regard is contrary to the agreement
between the appellant and his brother, Yvon Ruel, as the appellant acted
gratuitously and it was agreed that Yvon Ruel would reimburse him for the costs
and expenses he incurred. It is also inconsistent with the so-called loan of
$330,000 of March 1, 2006. It is also contrary to all of the claims of
Yvon Ruel, the estate and the respondent that it was compensation. A number of
points are in issue and they are surprising: Why file a complaint of theft and
fraud on September 27, 2007, with the Longueuil police service if it was
compensation? Why not claim the $330,000 if it was a loan? Why are there so
many versions regarding the amount and possible use? Why come back before this
Court when the out-of-court settlement and release agreement of June 13,
2008, gives final release for the past, present and future? Why attempt, as
mentioned in paragraph 41, to mislead the appellant and this Court by having the
appellant sign documents that do not reflect the truth and which attempt to
distort it, and then turn around and make it conform to the final agreement of
June 13, 2008? Why use this Court to obtain what they were unable to obtain at
the out-of-court settlement conference of June 13, 2008?
38. In early February 2006, without even informing the appellant,
Yvon Ruel transferred $300,000 to the appellant’s bank account and then asked
the appellant to act as a straw man with respect to an amount of $330,000, and
on March 1, 2006, an acknowledgement of debt was signed. The $330,000
was given in the form of a loan and was accompanied by an acknowledgement of
debt. The money belonged to Yvon Ruel, and he managed it, had control over it,
and used it as he saw fit according to his needs. For these reasons, the
appellant is of the view that he should not be taxed on any part of the loan
because to tax him would be contrary to all common sense and all laws. The
amount was used up by Yvon Ruel for his sole benefit.
39. As mentioned in paragraph 6, the government
acted illegally. By refusing to carry out court orders in the knowledge of its
disproportionate strength and means in that it had access to public funds, the
Government of Quebec pursued this primitive form of justice in bad faith and
deliberately caused serious harm to the entire Ruel family, particularly Yvon
Ruel, who died prematurely as a result. Their objective was to obtain a
discount settlement. This was immoral and indecent and it led to unfortunate
and deplorable events which have brought us before this court. The Government
of Quebec and the various stakeholders are attempting to punish appellant,
Jacques Ruel. They are attempting to obtain what they were unable to obtain at
the settlement conference of June 13, 2008, and/or legally.
40. An amount of $25,000 and some tangible property were
awarded to the appellant in personal damages, for trouble and inconvenience and
as compensation for the significant and continuing psychological after-effects
that this legal saga has had for him. The appellant suffers from deep
depression and regularly sees a psychologist to alleviate the trauma he has
suffered. In addition, the appellant must devote his retirement time and his
assets to defending himself.
REPLY TO THE NOTICE OF APPEAL
In reply to the appellant’s Notice of Appeal with
respect to the 2007 taxation year, a copy of which was sent to the respondent
on November 1, 2012, the Deputy Attorney General of Canada says:
A. STATEMENT OF FACTS
1.
The Notice of Appeal is only a statement of facts
that contains no identifiable elements that the respondent can admit. The
Deputy Attorney General therefore takes note of the facts relied upon by the appellant
in his Notice of Appeal and denies all the facts therein that are not consistent
with the following.
2.
On June 12, 2008, the Minister of National
Revenue (hereinafter the “Minister”) issued to the appellant an initial notice
of assessment with respect to the 2007 taxation year.
3.
On December 22, 2008, the Minister issued to the
appellant a Notice of Reassessment with respect to the same taxation year
indicating that the Minister was adding to the appellant’s income a total
amount of $5,580 in interest.
4.
On or about March 18, 2009, the appellant served
on the Minister his notice of objection to the reassessment.
5.
On August 6, 2012, the Minister confirmed the
reassessment in question.
6.
In determining the appellant’s tax payable, the
Minister relied on the following findings and assumptions of fact:
(a) During the 2007 taxation year, the Fédération des Caisses
Desjardins du Québec issued two T5 information slips indicating that it had paid
the appellant $2,711.92 and $2,868.58 in interest from Canadian Sources;
(b) The appellant was unable to show that the said interest came
from the money belonging to his brother, Yvon Ruel, which the appellant was
managing on his behalf.
B. ISSUE
7.
Was the Minister justified in adding to the appellant’s
income an amount of $5,580 that he received in interest?
C. STATUTORY PROVISIONS, GROUNDS
RELIED ON AND RELIEF SOUGHT
8.
He relies in particular on section 3, paragraph 12(1)(c)
and subsection 248(1) of the Income Tax Act, R.S.C. 1985, c. 1 (5th
Supp.), as amended (hereinafter the “Act”).
9.
He submits, on the basis of the facts alleged in
paragraph 6 and in accordance with paragraph 12(1)(c), that the Minister
was justified in adding to the appellant’s income an amount of $5,580 that he
received in interest.
[7]
The appellant, a
retired police officer, who was very comfortable in the court setting, attempted
to show throughout his lengthy testimony that he had helped his physically and
psychologically ailing brother, who was, on the one hand, vulnerable, unhappy, without
resources and depressed and, in other circumstances, quick-tempered, aggressive,
violent, even dangerous.
[8]
The appellant’s brother,
Yvon Ruel, was the victim of unjustified and unreasonable sanctions imposed by
his employer, which affected his health and caused it to deteriorate. Since he
had suffered serious material, physical and moral harm, a number of legal
proceedings had to be instituted in order to obtain a remedy.
[9]
The appellant submitted
that, during theses numerous and complex proceedings, his brother had become
vulnerable, depressed and aggressive, impecunious and rudderless; he stated and
reiterated that his brother’s immediate family, that is, his children and his
former spouse, had rejected him. In that regard, the appellant spoke very harshly
of the attitude and conduct of his brother’s two daughters and son, whom he
described as ungrateful and indifferent to the woes of their ill and
impecunious father, Yvon Ruel.
[10]
The appellant also
stated that his brother was a manipulator and freeloader, and indeed a parasite
on society. He indicated that his brother had three addresses, including one in
Alberta, in order to avoid, inter alia, his tax obligations.
[11]
He added that, to escape
his tax liabilities and other obligations toward actual and potential creditors,
his brother was skilful and imaginative, concocting all kinds of scenarios,
schemes, and lies to avoid assuming his responsibilities and to gain all he
could from every situation with which he was faced.
[12]
The appellant submitted
that his brother prepared false documents and false contracts and had even
developed a great talent for forging signatures; indeed, he stated that his
brother had on a number of occasions copied his own signature after digitizing
it.
[13]
The appellant also admitted
to having lied outright after being sworn before the court during a hearing in
the Superior Court in which an account relating to him was filed. He admitted
to validating under oath certain documents which he knew to be false and untrue
and which his brother had fabricated in the interest of the successful conduct
of his case.
[14]
When questioned about
the seriousness of those acts, he replied that he wanted to protect himself
from the dangerousness of his brother, who could have also posed a very great danger
to the life of a number of persons. I note that the appellant is a strapping
fellow whose career was with the Sûreté du Québec.
[15]
He described his
brother’s children, that is to say, his nephew and two nieces, as being
heartless, ungrateful, indifferent to their father’s woes; he also stated that
his brother kept them away from him and did not want them to be associated with
anything having to do with him, particularly his legal claims.
[16]
The appellant also mentioned
that his brother’s family had filed a complaint against him with his former
employer. He indicated that the authorities concerned did not pursue the
complaint, which, according to the appellant, legitimized and validated everything
he had done.
[17]
Most of the appellant’s
testimony presented details that were neither relevant nor useful in answering the
two fundamental questions pertaining to his two appeals:
First, was the amount of $330,000 a loan
granted by his brother or rather fees that his brother paid him pursuant
to an agreement?
Second, was the amount of $5,580.50 paid by
the Caisse populaire Desjardins interest that he was required to add to his
income?
[18]
Specifically regarding
these two questions, the appellant provided very few details in relation to the
first issue and most particularly with respect to the second issue.
[19]
With regard to the
first issue, the appellant essentially submitted that the amount of $330,000 was
in fact a loan or a sham loan. The purpose was to enable his brother to escape
the obligation to pay substantial fees to a lawyer to whom the appellant and
his brother had given a mandate. This was with respect to legal proceedings instituted
to obtain redress for harm suffered following his brother’s dismissal.
[20]
The explanation is
rather peculiar considering that the appellant also stated that the lawyer in
question was a friend and that the mandate had been given to him on the
appellant’s recommendation. The fees of the lawyer in question were over $200,000.
[21]
The appellant stated that
he had acted essentially as a nominee and that he had never had actual
ownership and/or enjoyment of the amounts, namely a total of $330,000, transferred
to his account.
[22]
He maintained that he had
repaid in full the amounts in question through payments made following numerous
requests made of him by his brother so that he could treat himself to a few
luxuries, pay miscellaneous expenses, etc. Thus he claimed that he had received
absolutely nothing from his brother that could be considered income.
[23]
When asked to explain
and describe when and how he repaid the money to his brother, on the one hand the
responses and explanations provided by the appellant were incomplete, confusing
and undocumented, and on the other hand the portion of his testimony regarding
this fundamental question was obtained in response to the other party’s questions.
The evidence adduced regarding this aspect is very sketchy, indeed incomplete. He
spoke in particular of a significant amount of money of about $100,000 that his
brother purportedly asked him for so that he could help his children with whom
he supposedly had no relations and who, in addition, according to the appellant,
were ungrateful and indifferent.
[24]
The amount in question was,
according to the appellant, a cash withdrawal augmented by an amount taken out
of the appellant’s savings. That is the only amount supported by a commencement
of proof (an entry on the appellant’s account). That commencement, however, was
not the subject of additional evidence that could validate or corroborate this
amount. Knowing that his management could potentially engender some degree of mistrust
and/or give rise to a requirement of accountability, it would have been wise
and prudent for him to obtain receipts from his brother each time he gave him
money at his request, especially when the amounts involved were substantial.
The fact that he does not have such receipts seems to me to be a very important
and highly relevant element in validating the basis for the assessment under
appeal.
[25]
Indeed, the appellant
did not file any records, documents or other evidence that could validate his very
incomplete and moreover inconsistent verbal explanations.
[26]
After having gained all
he could from the situation ($330,000 in fees as a consultant) and no doubt
anticipating problems with the family, the appellant withdrew and got the Public
Curator involved.
[27]
Several times, he
completed his answers only after a long pause. This was the case in particular when
he stated loud and clear that he had no assets. He later indicated that he had
money at home, that he had a safety deposit box at the bank, that he received an
amount on the sale of a helicopter, etc. As for the amount of $5,580.50, he
stated that he did not know what it was. He also stated that it may have been
an error.
[28]
On this issue, which is
the subject matter of the second appeal, the evidence is completely non-existent.
It would have been very easy to call as a witness a representative of the
institution that issued the T5 in question.
[29]
Sophie Ruel, the
daughter of appellant’s deceased brother, testified at the respondent’s request.
Her testimony was totally beyond reproach. Spontaneous and calm, she answered
all questions clearly, simply and precisely; it was however apparent that she
was bitter and upset over the behaviour of the appellant, her uncle, toward her
ill and very vulnerable father.
[30]
Indeed, she often
referred to the appellant as [Translation]
“the gentleman, the appellant or the consultant”, thus evincing a certain
coldness in their relationship, which had nevertheless once been very pleasant
and warm. In that regard, she spoke of childhood memories of harmonious
relations.
[31]
Ms. Ruel did not
attempt to express resentment, malice or animosity. She related in a simple and
sober manner what she had seen, heard, read and obtained. She also avoided expressing
aggressive, bitter or negative feelings about the appellant.
[32]
Her explanations were precise,
clear and supported by the confidences of her father and the documents she had
read. Everything validated and supported in all respects her seriously ill
father’s concerns about his brother, the appellant. Her testimony, despite the
very unusual context, was not coloured or shaped by perceptions, interpretations
or speculation.
[33]
She was party to authentic
notarial acts that constituted proof of their contents, notably with respect to
a power of attorney giving her all powers with respect to her father’s person. She
also spoke with the Public Curator’s representative on a number of occasions.
[34]
She read a very large
volume of documents as well as corrected and/or deleted content in a computer. To
understand and validate certain concerns, she and her family members retained an
expert to access a hard drive from which a large part of the data has been
erased, no doubt at the appellant’s request or on his own initiative. In light
of the documents consulted, it was very evident that the $330,000 was indeed
fees paid to the appellant.
[35]
She also made reference
to a number of situations previously described by the appellant in his
testimony. Her explanations totally contradicted the appellant’s version. I
refer in particular to the fact that, when he went to visit the appellant, her
father had to stay in a trailer, which, of course, the appellant never
mentioned; I refer as well to the length of his stays at the appellant’s home, the
expense accounts and the housing expenses. In addition, she denied having
received from her father a significant portion of the amount that the appellant
allegedly gave him.
[36]
On cross-examination by
the appellant, he attempted through petty, baseless and irrelevant questions to
discredit the quality of her testimony.
[37]
Ms. Ruel’s testimony satisfied
the Court that the appellant’s comments about his brother’s family’s ingratitude
and indifference were obviously false, at least where she was concerned.
Analysis
[38]
It is important to
note that the amount at issue is substantial; this is not a trifling matter. Moreover,
the appellant is no novice; he is a retired police officer who has testified in
court on many occasions.
[39]
The repayment of the money
to his brother was allegedly done in very large amounts, including a loan in the
amount of $100,000. All the same, the appellant was unable to produce any documents,
but provided only very vague and confusing verbal explanations, even though the
amount in question was substantial.
[40]
The various
transactions had to be done in cash or by cheque. In this regard, the best
evidence is assuredly bank slips attesting the dates and amounts of the various
deposits or withdrawals, to which can be added copies of cheques. Not only did the
appellant not use this basic approach, he also went so far as to deny certain obvious
facts and offered utterly outlandish explanations for others.
[41]
Is his testimony
credible, reliable and relevant enough for the Court to allow his appeal, which
is essentially based, as has already been noted, solely on his credibility?
[42]
I confess at the outset
that, while it is generally quite difficult to exclude testimony on the ground
of lack of credibility, the exercise of assessing credibility in this case was relatively
simple; indeed, I have rarely had to decide a case where so many facts were
available to make such a finding.
[43]
Before itemizing the elements
that justify and support such a harsh finding regarding his testimony, there
are several points that I consider it useful to state.
[44]
As regards credibility,
it is often difficult to determine whether testimony is credible or not. The
degree of difficulty is even greater where testimony is credible with respect
to some aspects but not others. In some cases, the finding made is uncertain to
the point where the rule of the balance of probabilities is very useful and, above
all, welcome.
[45]
This is not at all the
situation in the case at bar; I reject the entire testimony of the appellant,
who fabricated most of the explanations offered. I find it despicable that a
former police officer would have conducted himself in such a base and abusive manner
by exploiting a person who was ill and without resources.
[46]
Indeed, in order to
assess the credibility of a witness it is necessary to consider numerous elements
that must be tempered by taking into account the passage of time, the complexity
of the case, the nervousness of the witness, and also his ability to express
himself clearly. To all these should be added the witness’s knowledge, experience
and education. In some cases, consistency, hesitation, plausibility, reasonableness,
etc. also come into play. In the present case, regardless of the approach, the conclusion
is the same: the appellant has no credibility.
[47]
The respondent submits that
the appellant received from Yvon Ruel, his brother, in 2006, fees in the amount
of $330,000 for services rendered and that he is required to include that
amount as business income in computing his income for the 2006 taxation year.
[48]
The respondent further submits
that the interest of $5,580.50 paid to the appellant by the Caisse
populaire Desjardins in 2007 constitutes income from property that the
appellant must include in computing his income for 2007.
[49]
For his part, the
appellant submits that he received nothing more than the amounts reimbursing him
in part only for the many expenses he incurred in supporting and accompanying
his brother in the legal saga of his brother’s proceedings against his former
employer for unlawful dismissal. He submits that the amounts totalling $330,000 were
neither income nor consulting fees, but merely a loan made by his brother in
order to avoid paying certain debts, including lawyer’s fees of over $200,000.
He claims to have repaid the full amount of the loan and to have received
absolutely nothing that could be treated as income.
[50]
As for the amount of $5,580.50
taxed as investment income, the appellant essentially stated that he was unable
to clearly explain what it was.
[51]
His lengthy testimony
unequivocally revealed that the appellant has always been comfortable in the
role of key witness, so much so that he was able to remain calm even when his
explanations were completely contradictory, particularly when describing the
extent to which his brother was vulnerable, fragile and without resources while
that same individual, again according to the appellant, was in other circumstances
hypocritical, dishonest, brazen, a freeloader and even very dangerous. The
appellant even claimed that he was afraid of his brother.
[52]
According to the
appellant, his brother’s personality was changeable, which facilitated the
appellant’s completely contradictory and often downright implausible explanations.
Why did he accept, tolerate and validate deceitful and unlawful behaviour? His
answer was that his brother was dangerous and so he was afraid, indeed very
afraid, but not enough to report him to the competent authorities.
[53]
I think it is useful to
point out some of these contradictions:
(a) The appellant stated that
his brother had asked him for $100,000 to help his children, in particular with
respect to the purchase of a home; he withdrew $93,000 in $100 bills from his
account; this transaction appears on the statement, and the amount was
augmented by $7,000, again in cash, from his personal savings. Ms. Ruel clearly
stated that she never received any part of that amount. Why would one use cash transactions
in such a delicate matter?
(b) The appellant stated
that his brother had no confidence in his children (two daughters and a son), and
that he wanted to keep them well away from his affairs. His daughter Sophie
indicated that she had an excellent relationship with her father; she visited
him and he visited them also. The notarized power of attorney and the terms of
the signed and valid will confirm and corroborate in all respects Ms. Ruel’s
version with regards to the days following the main settlement of the
appellant’s various claims against the estate. Those authentic deeds contradict
the appellant’s purported benevolence and attentiveness toward his brother.
Indeed it is quite clear that the appellant did everything in his power to sow
and foster discord between his brother and his children.
(c) On the one hand, the
appellant described himself as amiable, available and overly generous with both
his time and resources; yet how does one reconcile such traits with his actual conduct,
particularly in making completely unreasonable demands for payment within short
time periods and charging an excessive interest rate in the event of non‑payment
within the time specified?
(d) The appellant stated
that he invited Ms. Ruel to discuss her father’s situation. On that point, she
indicated that she never received such an invitation. She stated that, on the
contrary, she herself had taken the initiative in that regard and that the
appellant had wanted no part of it.
(e) On cross-examination,
the appellant attempted to undermine his niece’s credibility by speaking in
tendentious and shameful terms of her and her behaviour. The witness, for her
part, never expressed any malice toward her father’s brother, the appellant, other
than referring to him as the [Translation]
“consultant”.
[54]
Why did the appellant not
call as a witness the lawyer who received over $200,000 in legal fees, someone
from the Caisse Desjardins at which the money was held and which issued the T5 slip
with respect to interest, the notary who prepared the deeds, someone from the
Office of the Public Curator, or other such individuals?
[55]
The appellant stated
that on his low retirement income he fed, housed and assumed responsibility for
his ill and vulnerable brother, who was rejected by all of his family members, and
that he did so entirely without compensation most of the time.
[56]
Ms. Ruel, however,
stated that her father had told her that everything the appellant did for him
had to be paid for and that nothing was free.
[57]
She gave as an example
the fact that father had to stay in a trailer adjacent to the appellant’s
residence and that he did not stay at the residence as the appellant stated throughout
his testimony. The appellant described himself as a sensitive, generous and
compassionate person and as being very devoted to his ill brother.
[58]
The appellant was
unable to provide a shred of credible and reliable evidence to substantiate such
attributes. On the contrary, evidence composed of his niece’s testimony and documents
he himself signed demonstrates the exact opposite. I refer in particular to the
invoices setting a deadline and an astronomical interest rate. Was this out of
revenge or frustration? Again, these sentiments contradict his supposed empathy
with his brother.
[59]
Ms. Ruel, the appellant’s
niece, indicated that her father would visit the appellant for several weeks at
a time at first, and then sporadically, for a few days, each time returning to Longueuil,
the city where his only residence was located.
[60]
Another document shows
that the appellant’s generosity had a very particular meaning. The appellant still
charged his brother $150 per week while he stayed with him purportedly for the
preparation of his case.
[61]
Ms. Ruel testified with
exemplary aplomb considering her uncle’s spiteful, mean-spirited, exploitative and
loutish conduct. Indeed, she was able to contain the aggressiveness and
animosity that, in the circumstances, would have been understandable. She testified
in a responsible manner, except that she said the “consultant” when referring
to the appellant, and that was as far as it went; the facts she related were entirely
substantiated by a number of documents and were consistent with all external
elements, including the involvement of a notary and the Public Curator.
[62]
Her account had the advantage
of being reasonable and credible, and above all it was confirmed and corroborated
by the documentary evidence. Yes, she admitted that her father was ill, aggressive,
vulnerable and impecunious. Yes, she admitted that her father had had a good relationship
with the appellant, and that the appellant had in some respects supported him
at times in the past.
[63]
She testified on the
basis of facts; she never engaged in speculation nor did she attempt to
interpret what she had observed; she simply stated what her father had said, his
concerns, his reservations, and what he had done. In addition to being very
interesting and highly relevant, her testimony was logical and consistent with
the content of a number of available documents.
[64]
A clear preponderance of
evidence shows that the appellant did everything he could to isolate his ill,
vulnerable, deeply depressed and impoverished brother. He truly did everything
possible to obviously exploit the situation to the fullest to his own advantage.
[65]
He did not hesitate to
lie and to fabricate explanations, a number of which were quite simply far-fetched
or false.
[66]
In such a delicate matter
as the management of his brother’s patrimony, it would have been easy, reasonable
and above all exceedingly wise and prudent to be meticulous so as to be able to
eventually give an accounting, particularly since the appellant had and should
have had all requisite knowledge in this regard, given the type of work he had
done during his working life.
[67]
He was the only witness
who testified in support of his case, when he could have had several other people
testify. When his explanations contradicted the content of certain documents, he
submitted that these were false or that his actions had been necessary in order
to protect himself or the community.
[68]
Sometimes his brother
was portrayed as being ill, impoverished and rejected by all the members of his
family. Sometimes he was described as a potentially dangerous criminal, threatening
to either commit suicide or kill all those whom he blamed for a whole series of
grievances. The appellant further stated that his brother owned firearms.
[69]
One minute he was
impoverished and without resources, incapable of making decisions. The next minute
he was a clever schemer and a real freeloader, a parasite on all around him who
was exceptionally gifted at drafting complex contracts, preparing a whole series
of false documents and false invoices, and at operating and using a computer for
the purpose of forgery, and he often forged the signature of the appellant, who,
I repeat, had had a career as a police officer dealing with criminal cases.
[70]
Depending on the situation
and the questions, the appellant’s answers favoured one or the other of his brother’s
personalities. A former police officer, with an imposing build, the appellant stated,
indeed repeated, that he felt threatened and that he feared the consequences of
his brother’s aggressive behaviour.
[71]
The appellant, as a
former police officer, had or should have had a network and the expertise and
resources to ensure his own safety and protect society against his brother’s
mood swings, if the brother truly was as described by the appellant. My belief
is rather that the appellant exaggerated, to the point of fabrication, in an attempt
to justify the unjustifiable.
[72]
Why did the appellant
not have his brother interdicted? Why did he not have him committed? Why did he
not take measures and precautions to control and prevent all that? The far-fetched
and absolutely unreasonable answer was that the appellant was afraid of his
brother.
[73]
The appellant’s
testimony, which is the only evidence in support of his two appeals, is fraught
with trivialities, inconsistencies and contradictions. When asked to explain certain
statements, the appellant fell back on explanations that were outlandish and totally
unreasonable to the point of being a real insult to one’s intelligence.
[74]
When the documents did validate
the explanations provided, the signatures had been obtained, according to the
appellant, in moments and during periods when his ill brother was not only
lucid, but also had above-normal mental acuity.
[75]
However, when a document
demanded a conclusion that was contrary to his interests and claims, it was
false, or a counterletter or simply a void document because it had been signed by
a person, his brother, who was intellectually deficient and completely incapable
of giving informed, free and voluntary consent.
[76]
In conclusion, the
appellant struck me—and his lengthy testimony is testament to this—as being an
individual with no scruples who basely exploited his family ties to enrich
himself in a completely indecent manner. This type of situation is always
unfortunate, but when the persons involved are two brothers, one of whom is a
former police officer and the other ill, it becomes simply odious.
[77]
There is no doubt that the
appellant quite scandalously exploited the vulnerability of his brother, who
was without means and resources. He abused the situation to the point of asking
his brother, for no reason at all, for astronomical amounts of money after introducing
him to a lawyer friend, who also charged him fees of over $200,000 without
completing his mandate.
[78]
The outcome of the two appeals
rested essentially on the appellant’s credibility. However, the evidence
established unequivocally and indeed beyond all doubt that he lied from beginning
to end. The appellant’s testimony must be discounted on the ground that it is
not credible. To demonstrate the validity of his claims, the appellant could
have easily shown through just a few reliable documents along with brief explanations
the inflow and outflow of the amounts involved.
[79]
I repeat, the amounts
in question are substantial. The appellant claims to have acted as a nominee to
enable his brother to thwart his creditors, including his own lawyer friend. Is
that not a scenario that demanded thoroughness and coherence and validation through
serious, documented accounting?
[80]
The evidence
established that none of this was present; on the contrary, overwhelmingly
preponderant evidence shows that the appellant odiously exploited his own brother.
Lacking any documentary evidence, he concocted far-fetched and baseless explanations,
constantly taking refuge behind his deceased brother’s absence.
[81]
For all these reasons, the
two appeals are dismissed and the Court awards costs to the respondent.
Signed at Ottawa, Canada, this 3rd day of February
2014.
“Alain Tardif”
Translation certified true
on this 31st day of October 2014.
Erich Klein, Revisor
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