Haifa Trust – Court of Quebec finds that a trust with an inactive Alberta trustee whose director could be replaced at will by the Quebec patriarch was resident in Quebec
A purported Alberta-resident trust for the family of Mr. Zaffir was found by Lavigne JCQ to be resident in Quebec given that there was essentially nothing to connect it to Alberta other than an Alberta corporate trustee whose Alberta-resident director did essentially nothing (nor had any real ability to do so). Lavigne JCQ noted that the following two points were by themselves sufficient to reach this Quebec residency finding:
That Mr. Zaffir was the sole shareholder of Alberta Ltd. and in that capacity he had the power to name or dismiss the director of Alberta Ltd., coupled with the fact that Mr. Zaffir was also the “protector” of the Haifa Trust, is sufficient to conclude that the effective control of the Haifa Trust was in the hands of Mr. Zaffir, a resident of Quebec and on that basis, the taxes of the Haifa Trust were required to be paid in Quebec.
Neal Armstrong. Summary of 895410 Alberta Ltd., fiduciaire de la Fiducie Haifa v. Agence du revenu du Québec, 2018 QCCQ 2581 under s. 2(1).