Stein v. Stein, 2003 FC 1284

Date: 20031104

Docket: ITA-12-00

Citation: 2003 FC 1284

Montréal, Quebec, November 4, 2003

Present: RICHARD MORNEAU, PROTHONOTARY

In the matter of the Income Tax Act

                                                                         - and -

In the matter of an assessment or assessments by the Minister of National Revenue under one or more of the Income Tax Act, Canada Pension Plan, Employment Insurance Act

AGAINST:

                                                                 MOLLY STEIN

                                                                                                                                Judgment debtor

                                                                           and

                                                               SANDRA STEIN

                                                                                                                                           Garnishee

Motion by Her Majesty The Queen, garnisher, to dismiss objections raised in the cross-examination of the garnishee, Sandra Stein, on her affidavit.

REASONS FOR ORDER AND ORDER

[1]        Aside from question 21, I consider that in the unusual factual situation here, namely the amount of the loan involved, the short duration of the promissory note and the absence of an original of that note, the garnisher was authorized to put the questions raised in the cross-examination on affidavit.

[2]        To begin with, in my view it is clear that this Court has jurisdiction to address the civil law institutions raised in the case at bar by the garnisher (simulation, forfeiture of term) based on the principles laid down by the Federal Court of Appeal in Le Bois de Construction du Nord (1971) Ltée. v. The Queen, [1986] 2 C.T.C. 227 and The Queen v. Transport H. Cordeau, 2002 D.T.C. 7127. The search for forfeiture of term by the garnisher in right of a judgment debtor is not a measure which seeks to involve this Court in the validity of the contract, here the loan, between the parties. Forfeiture of term is the consequence of events unrelated to the loan.

[3]        The questions raised, dealing with the existence of other loans involving the garnishee, whether in conjunction with the judgment debtor or not, and the questions dealing with the use of funds borrowed, validly relate to the credibility of the deponent and the possible simulation of the alleged term of 15 years. The questions dealing with the circumstances surrounding the loan in my opinion validly relate to the institution of forfeiture of term which the garnisher may seek. To do this, as with the question of possible simulation, the garnisher must be allowed a certain latitude here. The questions raised do not go beyond that.

[4]        Consequently, this motion by the judgment creditor is allowed with costs.

[5]        Accordingly, the deponent Sandra Stein will have to again appear at her expense at a time and place to be agreed between the parties to answer the questions raised in the motion at bar (aside from question 21) and any question legitimately resulting from the questions here authorized.

[6]        This order is also applicable to, and will be included in, case ITA-13151-01. However, there will only be one set of costs for both cases.

Certified true translation

Suzanne M. Gauthier, C. Tr., LL.L.

                                                             FEDERAL COURT

                                                      SOLICITORS OF RECORD

DOCKET:                                           ITA-12-00

STYLE OF CAUSE:                           In the matter of the Income Tax Act

- and -

In the matter of an assessment or assessments by the Minister of National Revenue under one or more of the Income Tax Act, Canada Pension Plan, Employment Insurance Act

AGAINST:

MOLLY STEIN

                                                                                                                                   Judgment debtor

and

SANDRA STEIN

                                                                                                                                             Garnishee

PLACE OF HEARING:                                             Montréal, Quebec

DATE OF HEARING:                                               November 3, 2003

REASONS FOR ORDER BY: RICHARD MORNEAU, PROTHONOTARY

DATED:                                                                      November 4, 2003

APPEARANCES:

Pierre Lamothe                                                              for the judgment creditor

Konstantinos Voggas                                                     for the garnishee

SOLICITORS OF RECORD:

Morris Rosenberg                                                          for the judgment creditor

Deputy Attorney General of Canada

Sweibel, Novek                                                             for the garnishee

Montréal, Quebec