[1] In a decision dated January 13, 2003, Angers J. of the Tax Court of Canada dismissed the applicants' appeals against a decision by the Minister of National Revenue refusing to give credits for charitable donations allegedly made by the applicants to the Ordre Antonien Libanais des Maronites.

[2] In dismissing the applicants' appeals, Angers J.T.C.C. determined that the Minister had good reason for reassessing the applicants after the normal reassessment period pursuant to subparagraph 152(4)(a)(I) of the Income Tax Act (the Act) and assessing penalties under subsection 163(2) of the Act.

[3] There is no doubt that the judge found, inter alia, as he did because he did not believe the explanations offered by the applicants about the circumstances surrounding the donations that they allegedly made to the Ordre Antonien. Angers J.T.C.C. clearly explains his reasoning in paragraphs 59 to 63 of his reasons, which read:

[59] As has been noted in paragraph 42 of these Reasons, the evidence adduced by the respondent exposes a stratagem well established by the Order. Did the appellants participate in this stratagem? Although all the receipts meet the requirements set out in the Act, it is also true that the donations must be legitimately made, that is, there must be a remittance of the money constituting the irrevocable donation. In this case, the balance of evidence adduced favours the respondent and makes it possible to find that the appellants did indeed participate in the stratagem set up by the Order during all the taxation years at issue.

[60] The testimony by the appellants, the percentages of their donations in comparison with their incomes and the percentages of their donations in comparison with the allowable maximum for charitable donations, the dates of the deposits in comparison with the dates of the receipts, the withdrawals made almost immediately after the deposits and in amounts of approximately the percentage of the kickbacks made by means of the stratagem, and the backdated receipts, to name only these factors, allow me to find that the appellants did participate in the stratagem.

[61] I find it odd that, except for one donation in the amount of $50 made by Simon Daou for the 1991 taxation year, all the other donations made during the taxation years at issue, amounting to $43,680, were made to the Order.

[62] The information gathered by Ms Langelier and adduced in evidence in chart form, particularly Exhibits I-16, I-22, I-23 and I-24, is quite revealing of the circumstances that should not occur in the normal course of a donor's making a donation and obtaining a receipt and the donee's depositing the donation within a few days. In this case, one must wonder why, as part of the first stratagem, the receipts were backdated, the donations were deposited on later dates, and the Order made withdrawals shortly thereafter in amounts of approximately a percentage of the donations.

[63] It is true that the appellants made donations that were within the allowable maximum for charitable donations and that their incomes allowed them to be generous. On the other hand, one cannot ignore all the circumstances in which the donations were made, such as the fact that no evidence was found of the donation in the amount of $6,500 made by the appellants and the fact that this cheque was the only one the appellants were unable to locate. What about the fact that one receipt is dated November 22, 1993 while the cheque for which this receipt was issued is dated December 11, 1993, when this appellant claims that he was given the receipts on the same days he made the donations? One may doubt the credibility of the evidence regarding these donations: in fact, they were not donations, but a semblance that allowed the appellants to obtain a tax benefit.

[4] The applicants are really asking us to reassess the evidence that was before the first judge. When sitting in review of a judgment by the Tax Court of Canada, we do not in any way have that power. The assessment of the evidence and, specifically, the credibility of the witnesses, including the applicants, was clearly a matter for the first judge.

[5] Unfortunately for the applicants, they have not succeeded in persuading us that Angers J. erred in assessing the evidence or the applicants' credibility. Further, they were unable to persuade us that Angers J.T.C.C. erred in any way that would provide us with a basis for intervention.

[6] In our opinion, the evidence before the first judge, considered as a whole, could reasonably support his findings.

[7] Accordingly, the applications for judicial review will be dismissed with costs.

"Marc Nadon"

J.A.

Certified true translation

Kelley A. Harvey, BA, BCL, LLB

FEDERAL COURT OF APPEAL

SOLICITORS OF RECORD

DOCKETS: A-87-03 and A-88-03

STYLE OF CAUSE: VINCENT DAOU and SIMON DAOU

ATTORNEY GENERAL OF CANADA

PLACE OF HEARING: Montréal, Quebec

DATE OF HEARING: April 21, 2004

REASONS FOR JUDGMENT OF THE COURT: DESJARDINS J.A.

NOËL J.A.

NADON J.A.

DELIVERED FROM THE BENCH (BY): NADON J.A.

DATE OF REASONS: April 21, 2004

APPEARANCES:

Jacques Méthot

FOR THE APPLICANTS

Simon-Nicolas Crépin

Nathalie Lessard

FOR THE RESPONDENT

SOLICITORS OF RECORD:

Jacques Méthot

Laval, Quebec

FOR THE APPLICANTS

Morris Rosenberg

Attorney General of Canada

Montréal, Quebec

FOR THE RESPONDENT

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Daou v. Canada (Attorney General), 2004 FCA 163

Citations2004 FCA 163

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2004 FCA 163