Date: 20130116
Docket: A-150-12
Citation: 2013 FCA 10
CORAM: NOËL
J.A.
PELLETIER
J.A.
MAINVILLE
J.A.
BETWEEN:
ISABELLA SOKOLOWSKI ROMAR
Appellant
and
HER MAJESTY THE QUEEN
Respondent
Heard at Montréal, Quebec, on January 15,
2013.
Judgment delivered at Montréal, Quebec,
on January 16, 2013.
REASONS FOR JUDGMENT BY: MAINVILLE
J.A.
CONCURRED IN BY: NOËL
J.A.
PELLETIER
J.A
Date: 20130116
Docket: A-150-12
Citation: 2013 FCA 10
CORAM: NOËL
J.A.
PELLETIER
J.A.
MAINVILLE
J.A.
BETWEEN:
ISABELLA SOKOLOWSKI ROMAR
Appellant
and
HER MAJESTY THE QUEEN
Respondent
REASONS FOR JUDGMENT
MAINVILLE J.A.
[1]
This is an appeal
from a judgment of Justice Angers of the Tax Court of Canada (the judge),
rendered April 25, 2012 on the basis of reasons which bear citation number
2012 TCC 104, dismissing the appeal from the assessment of $949,999 made in respect
of the appellant under subsection 160(1) of the Income Tax Act,
R.S.C. 1985, c. 1 (5th Supp.) (the Act).
[2]
Subsection 160(1)
deals with, among other things, transfers of property between spouses. It
allows the Minister to collect from a spouse who benefited from a transfer “the
amount, if any, by which the fair market value of the property at the time it
was transferred exceeds the fair market value at that time of the consideration
given for the property”, up to the amount of the tax liability of the other
spouse for the taxation year in which the transfer took place or any preceding
taxation year.
[3]
The issue is whether
the sale of the family home by the appellant’s husband to the appellant on
June 30, 1988 for the amount of $1 was part of a larger transaction,
namely, the dissolution of the partnership of acquests between the spouses on
April 20, 1989.
[4]
The parties acknowledge
that the fair market value of the residence was $950,000 when it was sold in
1988. Furthermore, it is not disputed that the appellant’s husband had an
outstanding tax liability exceeding $950,000 for the 1988 taxation year or a
preceding taxation year.
[5]
Upon reading the
notarial contracts at issue, and in light of all of the evidence before him,
the judge concluded that the sale transaction and the dissolution of the
matrimonial regime were distinct transactions and that, in the circumstances, subsection 160(1)
of the Act applied to the total value of the home at the time of the transfer less
one dollar. I see no error by the judge in these respects.
[6]
Indeed, the notarial contract
of sale dated June 30, 1988 expressly states that the spouses were married
under the partnership of acquests regime and that [translation] “[t]here is no pending agreement between the
spouses concerning the modification of their civil status or matrimonial regime”.
The notarial contract further states that [translation]
“[t]his sale was therefore concluded for the amount of one dollar ($1.00) and
other good and valuable consideration that the purchaser has paid in cash to
the seller and that the latter acknowledges having received from the purchaser,
to whom he grants a FINAL AND GENERAL DISCHARGE”.
[7]
The subsequent dissolution
of the partnership of acquests on April 20, 1989 does not establish that
an additional consideration was paid for the sale by one spouse to the other of
their principal residence. The notarial documents concerning the dissolution of
the matrimonial regime and the resulting partition of the assets clearly
specify that the family home was registered in the name of the appellant at the
time of the partition, thus explicitly confirming the previous sale
transaction. Each spouse’s waiver of his or her rights to the property passing
to the other spouse as a result of the partition flows from the very logic of
the dissolution of the partnership of acquests and the waivers do not in
themselves establish that an additional consideration was paid for the family
home.
[8]
The Civil Code of
Lower Canada provided in articles 1208 and 1210 that a notarial contract
signed by the parties is authentic and makes complete proof between the parties
to it of the obligation expressed in it and of what is expressed in it by way
of recital, if the recital has a direct reference to the obligation or to the
object of the parties in executing the instrument. The Civil Code of Québec
reiterates these principles in articles 2814 and 2819.
[9]
In these
circumstances, the judge did not commit a reviewable error by giving effect to
the clear provisions of the notarial contract of sale, which were not
contradicted by the notarial instruments regarding the dissolution of the
matrimonial regime.
[10]
I will therefore
dismiss the appeal with costs.
“Robert M.
Mainville”
“I agree.
Marc
Noël J.A.”
“I agree.
J.D.
Denis Pelletier J.A.”
FEDERAL COURT OF APPEAL
SOLICITORS OF RECORD
DOCKET: A-150-12
(APPEAL FROM A JUDGMENT BY ANGERS J. OF THE TAX
COURT OF CANADA DATED APRIL 25, 2012, DOCKET 2010-707(IT)G)
STYLE OF CAUSE: Isabella
Sokolowski Romar v.
Her Majesty the Queen
PLACE OF HEARING: Montréal,
Quebec
DATE OF HEARING: January
15, 2013
REASONS FOR JUDGMENT BY: MAINVILLE
J.A.
CONCURRED IN BY: NOËL
J.A.
PELLETIER J.A.
DATED: January
16, 2013
APPEARANCES:
|
Richard
Généreux
|
FOR THE APPELLANT
|
|
Nathalie Labbé
Valérie
Messore
|
FOR THE RESPONDENT
|
SOLICITORS OF RECORD:
|
Richard
Généreux
Île-des-Soeurs,
Quebec
|
FOR THE APPELLANT
|
|
William F.
Pentney
Deputy
Attorney General of Canada
|
FOR THE RESPONDENT
|
Email this Content