Date: 20041018
Docket: A-315-03
Montréal, Quebec, October 18, 2004
CORAM: DÉCARY J.A.
LÉTOURNEAU J.A.
NADON J.A.
BETWEEN:
JOHN MOLENAAR
Appellant
and
HER MAJESTY THE QUEEN
Respondent
JUDGMENT
The appeal is dismissed with costs.
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"Robert Décary"
J.A.
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Certified true translation
Jacques Deschênes, LLB
Date: 20041018
Docket: A-315-03
Citation: 2004 FCA 349
CORAM: DÉCARY J.A.
LÉTOURNEAU J.A.
NADON J.A.
BETWEEN:
JOHN MOLENAAR
Appellant
and
HER MAJESTY THE QUEEN
Respondent
Hearing held at Montréal, Quebec on October 18, 2004.
Judgment from the bench at Montréal, Quebec on October 18, 2004.
REASONS FOR JUDGMENT OF THE COURT: LÉTOURNEAU J.A.
Date: 20041018
Docket: A-315-03
Citation: 2004 FCA 349
CORAM: DÉCARY J.A.
LÉTOURNEAU J.A.
NADON J.A.
BETWEEN:
JOHN MOLENAAR
Appellant
and
HER MAJESTY THE QUEEN
Respondent
REASONS FOR JUDGMENT OF THE COURT
(Delivered from the bench at Montréal, Quebec on October 18, 2004)
LÉTOURNEAU J.A.
[1] Despite the efforts of Mr. Jodoin, the Court is not satisfied that Judge Archambault of the Tax Court of Canada made an error when he concluded that, for the years 1993 to 1996, the appellant knowingly or in circumstances amounting to gross negligence failed to report income determined by the net worth method by the Quebec Ministère du Revenu (the Ministère).
[2] Counsel for the appellant submitted that for this period, from 1993 to 1996, for which the limitation period had run, the Ministère should have the burden of proving that the "cash in" so found was taxable income. In other words, in order to limit the application of the net worth method, there would be a presumption in the taxpayer's favour that unreported and unexplained "cash in" comes from non-taxable income.
[3] With respect, such a presumption would make the net worth method useless and inapplicable for all practical purposes. Additionally, it would undermine the very basis of our taxation system, which is founded on voluntary reporting, since it would amount to favouring a crafty taxpayer who is best able, most effectively and for the longest time, to conceal his or her income and his or her failure to report it.
[4] Once the Ministère establishes on the basis of reliable information that there is a discrepancy, and a substantial one in the case at bar, between a taxpayer's assets and his expenses, and that discrepancy continues to be unexplained and inexplicable, the Ministère has discharged its burden of proof. It is then for the taxpayer to identify the source of his income and show that it is not taxable.
[5] Similarly, for 1997 the appellant did not persuade the Court that the judge had made any error requiring its intervention.
[6] The appeal will be dismissed with costs.
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"Gilles Létourneau"
J.A.
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Certified true translation
Jacques Deschênes, LLB
FEDERAL COURT OF APPEAL
SOLICITORS OF RECORD
DOCKET: A-315-03
STYLE OF CAUSE: JOHN MOLENAAR
Appellant
and
HER MAJESTY THE QUEEN
Respondent
PLACE OF HEARING: Montréal, Quebec
DATE OF HEARING: October 18, 2004
REASONS FOR JUDGMENT OF THE COURT: (DÉCARY, LÉTOURNEAU AND NADON JJ.A.)
DELIVERED FROM THE BENCH BY: LÉTOURNEAU J.A.
APPEARANCES:
Robert Jodoin FOR THE APPELLANT
Stéphanie Côté FOR THE RESPONDENT
SOLICITORS OF RECORD:
Jodoin, Huppé FOR THE APPELLANT
Granby, Quebec
Morris Rosenberg FOR THE RESPONDENT
Deputy Attorney General of Canada
Montréal, Quebec
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