Date:
20071210
Docket: A-509-06
Citation: 2007 FCA 393
CORAM: RICHARD
C.J.A.
DÉCARY
J.A.
LÉTOURNEAU
J.A.
BETWEEN:
BRASSERIE FUTURISTE DE LAVAL
INC.
Appellant
and
HER MAJESTY THE QUEEN
Respondent
REASONS FOR JUDGMENT
(Delivered from the bench at Montréal,
Quebec, on December 10, 2007.)
LÉTOURNEAU J.A.
[1]
The
appellant raised ten grounds of appeal in its memorandum of fact and law, but
at the hearing it argued only the following three issues:
1. the
sampling analysis by the Ministère du Revenu du Québec auditor for calculating
sales of alcoholic beverages was deficient;
2. the judge, without justification, dismissed the
expert report submitted by the appellant; and
3. the
judge erred in ruling that the appellant committed gross negligence justifying
the imposition of penalties pursuant to section 285 of the Excise Tax Act,
R.S.C. 1985, c. E-15 (the Act) by failing to report and pay amounts of goods
and services tax.
[2]
The Court
is not satisfied that these objections are valid.
[3]
The judge,
supported in this by the appellant’s expert witness, characterized the sampling
used by the auditor to calculate the sales of alcoholic beverages as thorough.
She was able [TRANSLATION] “to effectively establish the average selling prices
for beer (for example, beer by the bottle, by the glass or bock, by the pitcher
and by the half-pitcher), the percentage of sales that each category accounted
for, and the average markup percentages on wine and liquor sales”: see
paragraphs 30, 31, 126, 151 and 152 of the reasons for decision. In this regard
the judge said [TRANSLATION] “all in all, this was work of exemplary rigour
and attention to detail . . . Ms. Morand’s [the auditor’s] work is a
consequence of the Appellant’s methods. It is irreproachable, and the results
must be accepted in the absence of persuasive evidence to the contrary”: ibid.,
at paragraphs 151 and 152.
[4]
It was for
the judge to assess both the evidentiary value of the auditor’s report and that
of the report by the expert witness submitted by the appellant. It is not
accurate to say that he simply dismissed the report by the appellant’s expert
witness. He rejected certain aspects of the auditor’s report, just as he did
not accept certain conclusions or data in the report by the appellant’s expert
witness. In both cases, he provided explanations and justifications in support
of his conclusions.
[5]
In the
case of the report by the appellant’s expert witness, the criticisms which he
made regarding it are supported by the evidence. The judge noted this evidence,
in particular the weekly expenses of $1,000 paid in cash, adjusted by the
expert witness to $300, and appropriations of funds attributed to Michel
Légaré, which he set initially at $240,000 and then adjusted to $24,599: see
paragraphs 139 to 144 of the reasons for judgment. The judge questioned the
explanation given by the expert witness and the reliability of the sources on
which the latter had relied in making the reduction of the amounts.
[6]
It is not
this Court’s function to take the place of the trial judge and reassess the
credibility of witnesses which we did not see or hear. In the absence of a
palpable and overriding error, which the appellant could not establish, this
ground of appeal must be dismissed: see Housen v. Nikolaisen, 2002 SCC
33.
[7]
Finally,
as mentioned earlier, the appellant alleged that the judge imposed on it the
penalty set out in section 285 of the Act. That penalty is incurred when there
is gross negligence, which the courts have defined as involving greater neglect
than simply a failure to use reasonable care: see Cloutier v. The Queen,
78 DTC 6485, at 6487 (F.C.T.D.), and Venne v. Canada, [1984] F.C.J. No.
314 (QL), 84 DTC 6247, at 6256 (F.C.T.D.). It should be noted that, inter
alia, the appellant deliberately and regardless of the obligations imposed
on it by the Act continued to destroy employees’ daily reports, despite the
request made to it to preserve them: see also paragraphs 166 to 169, where the
judge sets out a list of the appellant’s deficiencies.
[8]
The judge
referred to this case law and properly directed himself in law on the point.
The conclusion which he drew from application of the rule of law to the facts
of the case at bar was, in the Court’s view, amply supported by the evidence.
[9]
For these
reasons, the appeal will be dismissed with costs.
“Gilles
Létourneau”
Certified
true translation
Susan
Deichert, Reviser
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