Date: 19971106
Docket: A-125-95
CORAM: STRAYER, J.A.
DESJARDINS, J.A.
MCDONALD, J.A.
BETWEEN:
HER MAJESTY THE QUEEN
Applicant
- and -
65302 BRITISH COLUMBIA LTD.
Respondent
Heard at Vancouver, British Columbia, November 5, 1997
Reasons delivered at Vancouver, B.C. on November 6, 1997
REASONS FOR JUDGMENT BY: DESJARDINS, J.A.
Date: 19971106
Docket: A-125-95
CORAM: STRAYER, J.A.
DESJARDINS, J.A.
MCDONALD, J.A.
BETWEEN:
HER MAJESTY THE QUEEN
Applicant
- and -
65302 BRITISH COLUMBIA LTD.
Respondent
REASONS FOR JUDGMENT
DESJARDINS, J.A.
[1] This is an appeal from a decision of the Tax Court of Canada which allowed as business expenses under paragraph 18(1)(a) of the Income Tax Act an amount of $269,629.69 imposed on the respondent by the British Columbia Egg Marketing Board, as an over quota levy with legal expenses and interest expenses associated with the levy, thereby allowing the respondent's appeal from an assessment made by the Minister of National Revenue with respect to the respondent's 1985, 1988 and 1989 taxation years.
[2] We are all of the view that whatever characterization is given to the over quota levy imposed by the marketing board, such levies are meant to carry out the purpose of the scheme, which is inter alia the orderly production of natural products in the province.1
[3] The decision of this Court in Amway2 stands for the proposition that business is to be carried on without any infraction to the law.
[4] There is no doubt in the case at bar that the respondent could have carried on his business in such a way as to avoid the above-normal excess of layers he admitted having pursued intentionally.
[5] There is moreover a strong public policy argument to be made so as to preclude the respondent from claiming as business expenses the over quota levies he incurred. It is clearly inconsistent with the purpose of such a marketing scheme if producers are able to take action similar to that of the respondent and sucessfully claim as business expenses levies encountered in excess of permissible allotments.
[6] The appeal will be allowed, with costs, the decision of the Tax Court of Canada will be set aside, and the appeal of the respondent with regard to the Minister's assessments for the taxation years 1985, 1988 and 1989 will be dismissed.
(Sgd.) "Alice Desjardins"
J.A.
November 6, 1997
Vancouver, British Columbia
FEDERAL COURT OF APPEAL
Date: 19971106
Docket: A-125-95
BETWEEN:
HER MAJESTY THE QUEEN
- and -
65302 BRITISH COLUMBIA LTD.
REASONS FOR JUDGMENT
FEDERAL COURT OF APPEAL
NAMES OF COUNSEL AND SOLICITORS OF RECORD
DATED: 19971106
COURT NO.: A-125-95
STYLE OF CAUSE: HER MAJESTY THE QUEEN
v.
65302 BRITISH COLUMBIA LTD.
PLACE OF HEARING: Vancouver, BC
DATE OF HEARING: November 5, 1997
REASONS FOR JUDGMENT OF THE COURT BY: DESJARDINS, J.A.
CONCURRED IN BY: STRAYER, J.A.
MCDONALD, J.A.
APPEARANCES:
Mr. M. Weder
Mr. A. Rachert for Applicant
Mr. K. Hansen
Ms. K. R. Sharlow for Respondent
SOLICITORS OF RECORD:
George Thomson for Applicant
Deputy Attorney General
of Canada
Thorsteinssons
Vancouver, BC for Respondent
__________________
1 Natural Products Marketing (BC) Act, R.S. 1979, c. 296, s. 2.
2 Amway Canada Ltd. v. Canada, (1996) 193 N.R. 381 (F.C.A.)
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