Tremblay,
T.C.J.
[Translation]:—This
appeal
was
heard
on
June
20,
1989,
in
Montréal,
Québec.
7.
Issue
The
issue
is
whether
the
appellant
was
justified
in
not
paying
the
amount
of
$20,657.69
owed
by
her
son,
Peter
Jennewein,
to
the
Minister
of
National
Revenue.
According
to
the
respondent,
this
amount
is
due
for
the
years
1978,
1980
and
1981.
The
respondent
submits
that
the
appellant
is
jointly
liable
for
her
son's
income
tax
debt
under
paragraph
160(1)(c)
of
the
Income
Tax
Act.
The
transfer
to
his
mother
of
a
building
worth
$42,000
before
he
left
for
the
United
States
made
it
possible,
in
view
of
Peter
Jennewein’s
tax
debt,
to
apply
this
provision.
On
the
other
hand,
the
appellant
submits
that
this
building,
which
she
inherited
in
1976
upon
her
husband's
death,
was
transferred
to
her
son
Peter
in
order
to
help
him
begin
his
new
career
as
a
real
estate
broker.
It
was
necessary
to
prove
the
possession
of
assets
of
substantial
value
to
obtain
the
said
licence.
According
to
the
appellant,
the
fact
that
she
did
not
receive
any
form
of
payment
from
the
alleged
sale
along
with
the
existence
of
a
right
of
habitation
for
life
encumbering
the
building
involved
in
the
transfer
shows
that
Mrs.
Jennewein
has
always
remained
the
real
owner
of
the
building.
The
respondent
submits
that
the
notarial
contracts
are
proof
of
their
content
and
cannot
be
refuted
by
oral
evidence.
2.
Burden
of
Proof
2.01
The
burden
is
on
the
appellant
to
show
that
the
respondent's
assessment
is
incorrect.
This
burden
of
proof
derives
from
several
judicial
decisions,
including
a
judgment
delivered
by
the
Supreme
Court
of
Canada
in
Johnston
v.
M.N.R.,
[1948]
S.C.R.
486;
[1948]
C.T.C.
195;
3
D.T.C.
1182.
3.
Facts
3.01
Following
the
filing
of
the
notice
of
appeal
and
of
the
reply
to
the
notice
of
appeal,
the
parties
agreed
to
a
certain
number
of
facts
and
adduced
a
certain
number
of
exhibits.
Peter
Jennewein,
the
appellants
son,
completed
the
evidence
by
his
testimony.
3.01
The
facts
are
as
follows:
On
September
15,
1986,
the
respondent
issued
assessment
notice
number
581815
(the
"
assessment")
claiming
$20,344.70
in
income
tax
from
the
appellant.
This
amount
was
originally
owed
by
her
son
Peter
but
was
then
assessed
in
the
mother's
name
under
subsection
160(2)
of
the
Income
Tax
Act,
R.S.C.
1952,
c.
148
(am.
S.C.
1970-71-72,
c.
63)
(the
"Act").
Peter
Jennewein
had
disposed
of
the
only
property
of
value
he
owned—a
dwelling
house
located
in
Chomedey,
Laval—to
his
mother
when
he
was
liable
for
the
said
amount
to
the
Minister
of
National
Revenue.
3.02
The
building
in
question
was
originally
purchased
by
Ruppert
Jennewein,
the
appellant's
husband,
in
1956.
The
appellant
inherited
it
after
his
death
in
1976.
3.03
In
1979,
Peter
Jennewein,
the
appellant's
son,
took
steps
to
obtain
a
licence
as
a
real
estate
broker.
According
to
his
testimony,
his
purpose
and
that
of
his
two
partners
was
to
acquire
capital
in
anticipation
of
special
projects
for
the
company
Le
Permanent.
Among
the
many
conditions
Mr.
Jennewein
had
to
satisfy
to
obtain
this
licence,
he
had
to
prove
the
existence
of
substantial
net
assets.
3.04
In
order
to
help
her
son
begin
this
new
career,
the
appellant
agreed
with
her
son
to
register
the
title
to
the
property
in
the
name
of
Peter
Jennewein
on
the
basis
of
advice
given
her
son
by
his
notary
and
accountant.
On
December
14,
1979,
the
appellant
and
Peter
Jennewein
executed
a
notarial
deed
of
sale
for
the
building.
The
deed
stipulated
that
the
price
of
the
sale
would
be
$47,000,
which
amount
was
determined
after
the
property
had
been
assessed.
The
notarial
contract
of
sale
signed
in
the
presence
of
Luc
Sigouin
(the
notary)
as
number
7071
of
his
minutes
was
produced
as
Exhibit
1-1.
3.05
It
appears
from
Exhibit
1-1
that
the
vendor/appellant
reserved
a
right
of
habitation
for
herself.
The
clause
reads
as
follows:
[Translation]
Furthermore,
the
Vendor
reserves
the
right
to
live
for
her
lifetime
without
charge
in
the
said
building
sold;
The
said
right
of
habitation
is
guaranteed
by
first
hypothec
on
the
building
heretofore
designated
and
sold.
The
appellant
lived
in
the
said
building
from
1979
to
1982
and
personally
paid
the
municipal
taxes
and
maintenance
costs
in
spite
of
the
"right
of
habitation
without
charge”
she
had
granted
by
Exhibit
1-1.
3.06
Peter
Jennewein's
testimony
revealed
the
following
facts:
—
The
amount
of
$47,000
was
never
paid
the
appellant
in
spite
of
the
stipulation
of
the
deed
of
sale;
—
Mrs.
Jennewein
and
her
son
agreed
that
she
would
remain
the
real
owner
of
the
building.
3.07
In
April
1982,
Peter
Jennewein,
who
had
to
leave
to
live
in
the
United
States,
retransferred
the
building,
which
was
no
longer
useful
to
him,
to
his
mother
for
the
price
of
$1
and
"other
good
and
valid
considerations".
The
notarial
contract
dated
April
5,
1982,
which
was
concluded
in
the
presence
of
Luc
Sigouin
as
number
9066
of
his
minutes,
was
produced
as
Exhibit
1-2.
3.08
Clause
3
of
contract
I-2
reads
as
follows:
That
the
said
building
is
free
and
clear
of
any
charges
or
hypothecs,
with
the
exception
of
a
hypothec
in
favour
of
the
Caisse
Populaire
Pontmain
under
the
terms
of
a
deed
registered
at
Laval
under
number
465908,
which
will
be
repaid
out
of
the
product
of
the
present
sale
and
cancelled.
In
effect,
by
a
contract
signed
on
June
12,
1980,
in
the
presence
of
the
notary
Luc
Sigouin
as
number
7468
of
his
minutes,
the
appellant's
son
granted
a
hypothec
to
the
Caisse
populaire
Pontmain.
In
spite
of
the
said
clause
3
of
contract
I-2,
it
was
acknowledged
that
Peter
Jennewein
repaid
the
Caisse
populaire
Pontmain
in
full
on
April
2,
1982,
out
of
funds
from
the
liquidation
of
Registered
Retirement
Savings
Plan
accounts
in
the
name
of
Peter
Jennewein.
3.09
The
parties
were
also
in
agreement
that
the
municipal
assessment
of
the
building
at
issue,
which
was
dated
April
5,
1982,
was
$42,000.
3.10
The
respondent
produced,
as
Exhibits
1-3
and
1-4,
statements
of
account
referring
to
the
assessments
issued
on
Ma
1,
1987,
against
Peter
Jennewein
for
taxation
years
1978,
1980
and
1981
in
the
amount
of
$20,657.69,
including
interest.
Neither
the
appellant
nor
her
son
disputes
the
amount
of
that
debt.
3.11
Counsel
for
the
respondent
acknowledged
that
if
the
appellant
was
to
testify
her
testimony
would
be
the
same
as
that
of
her
son:
that
she
never
intended
to
sell
and
that
she
has
always
remained
the
owner
of
the
building.
4.
Act—Case
Law
and
Scholarly
Opinion—Analysis
4
.01
Act
The
provisions
of
the
Act
involved
in
the
present
case
are
subsections
160(1),
160(2)
and
160(3).
They
read
as
follows:
160.
(1)
Where
a
person
has,
on
or
after
the
1st
day
of
May,
1951,
transferred
property,
either
directly
or
indirectly,
by
means
of
a
trust
or
by
any
other
means
whatever,
to
(a)
his
spouse
or
a
person
who
has
since
become
his
spouse,
(b)
a
person
who
was
under
18
years
of
age,
or
(c)
a
person
with
whom
he
was
not
dealing
at
arm's
length,
the
following
rules
apply:
(d)
the
transferee
and
transferor
are
jointly
and
severally
liable
to
pay
a
part
of
the
transferor's
tax
under
this
Part
for
each
taxation
year
equal
to
the
amount
by
which
the
tax
for
the
year
is
greater
than
it
would
nave
been
if
it
were
not
for
the
operation
of
section
74,
75
or
75.1,
as
the
case
may
be,
in
respect
of
any
income
from,
or
gain
from
the
disposition
of,
the
property
so
transferred
or
property
substituted
therefor;
and
(e)
the
transferee
and
transferor
are
jointly
and
severally
liable
to
pay
under
this
Act
an
amount
equal
to
the
lesser
of
(i)
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,
and
(ii)
the
aggregate
of
all
amounts
each
of
which
is
an
amount
that
the
transferor
is
liable
to
pay
under
this
Act
in
respect
of
the
taxation
year
in
which
the
property
was
transferred
or
of
any
preceding
taxation
year,
but
nothing
in
this
subsection
shall
be
deemed
to
limit
the
liability
of
the
transferor
under
any
other
provision
of
this
Act.
160.
(2)
The
Minister
may
at
any
time
assess
a
transferee
in
respect
of
any
amount
payable
by
virtue
of
this
section
and
the
provisions
of
this
Division
are
applicable
mutatis
mutandis
in
respect
of
an
assessment
made
under
this
section
as
though
it
had
been
made
under
section
152.
160.
(3)
Where
a
transferor
and
transferee
have,
by
virtue
of
subsection
(1),
become
jointly
and
severally
liable
in
respect
of
part
or
all
of
a
liability
of
the
transferor
under
this
Act,
the
following
rules
are
applicable:
(a)
a
payment
by
the
transferee
on
account
of
his
liability
shall
to
the
extent
thereof
discharge
the
joint
liability;
but
(b)
a
payment
by
the
transferor
on
account
of
his
liability
only
discharges
the
transferee's
liability
to
the
extent
that
the
payment
operates
to
reduce
the
transferor's
liability
to
an
amount
less
than
the
amount
in
respect
of
which
the
transferee
was,
by
subsection
(1),
made
jointly
and
severally
liable.
Articles
1212
and
1234
of
the
Civil
Code
of
the
province
of
Québec
have
also
had
a
fundamental
impact
on
the
progress
of
the
case.
They
read
as
follows:
1212.
Counter-letters
have
effect
between
the
parties
to
them
only;
they
do
not
make
proof
against
third
persons.
1234.
Testimony
cannot
in
any
case,
be
received
to
contradict
or
vary
the
terms
of
a
valid
written
instrument.
4.02
Case
Law
and
Scholarly
Opinion
The
case
law
and
scholarly
opinion
considered
in
the
analysis
are:
1.
Salter
v.
M.N.R.,
[1947]
Ex.
C.R.
634;
[1947]
C.T.C.
29;
2
D.T.C.
918;
2.
M.N.R.
v.
Ouellette
and
Brett,
[1971]
C.T.C.
121;
71
D.T.C.
5094;
3.
M.N.R.
v.
Thibault,
[1962]
C.T.C.
137;
62
D.T.C.
1114;
4.
M.N.R.
v.
Beaupré
Estate,
[1973]
C.T.C.
316;
73
D.T.C.
5255,
(F.C.T.D.);
5.
Nielsen
v.
M.N.R.,
[1978]
C.P.
274;
6
.
Régnier
and
Coulombe,
Portée
de
l’article
1234
C.c.
en
matière
fiscale,
Revue
du
Barreau,
Vol.
31
(1971);
7.
Périard
v.
Paiement,
[1979]
C.A.
213;
8.
Abecassis
v.
Abecassis,
[1980]
C.A.
178;
9.
Pineau,
No.
224
(page
310),
No.
227
(pages
313-14);
10.
Beaudoin
and
Renaud,
Code
civil
annoté,
art.
1212;
11.
Nadeau-Ducharme,
Traité
de
droit
civil
du
Québec,
Vol.
X,
Nos.
400,
405,
409
and
503;
12.
Tancelin,
Des
Obligations,
Nos.
343,
344,
345,
349
and
350;
13.
Brodeur
v.
M.N.R.,
[1987]
2
C.T.C.
2049;
87
D.T.C.
351
(T.C.C.);
14.
Duke
of
Westminster
v.
C.I.R.,
[1936]
A.C.
1.
4.03
Analysis
4.03.1
The
main
arguments
of
counsel
for
the
appellant
are
the
following:
4.03.1(a)
Article
1234
of
the
Civil
Code
only
applies
as
between
the
parties
to
the
contract.
It
is
therefore
entirely
possible
for
a
third
person
to
give
testimony
contradicting
the
terms
of
a
valid
written
instrument.
It
is
just
as
possible
for
the
parties
to
the
contract
to
give
testimony
contradicting
the
terms
of
the
said
instrument.
Counsel
drew
his
conclusions
from
the
Salter,
Thibault,
Nielsen
and,
above
all,
Ouellette
and
Brett
cases,
supra.
The
article
by
Régnier
and
Coulombe
(4.02(6))
confirms
this
claim.
4.03.1(b)
Furthermore,
an
admission
can
in
the
same
way
as
testimony
be
used
to
contradict
the
terms
of
a
valid
written
instrument.
The
appellant
and
her
son
have
produced
admissions
contradicting
the
notarial
contract.
4.03.1(c)
The
contract
is
void
for
lack
of
consent
and
lack
of
consideration
because
the
appellant
never
consented
to
a
genuine
sale
of
her
building
and
no
consideration
was
given
during
the
alleged
sale
of
the
house
(Art.
984,
C.C.).
4.03.1(d)
Article
1234
of
the
Civil
Code
is
not
applicable
where
the
issue
is
to
prove
that
a
written
agreement
is
void.
The
parties
can
contradict
the
contract
by
way
of
testimony.
Counsel
for
the
appellant
referred
to
the
cases
of
Periard
v.
Paiement,
supra,
and
Abecassis
v.
Abecassis,
supra,
in
support
of
the
lawfulness
of
her
claim.
4.03.1(e)
The
facts
confirm
that
the
appellant
never
stopped
being
the
real
owner
of
the
building
involved
in
the
transfer
at
issue.
[Translation]
Mrs.
Jennewein
has
always
behaved
as
a
real
owner.
(Transcript,
page
113)
The
fact
that
Mrs.
Jennewein
was
granted
a
right
of
habitation
before
the
alleged
sale
only
confirms
that
it
was
not
a
sale
(Transcript,
pages
105-06)
Mrs.
Jennewein
also
paid
both
the
taxes
and
maintenance
costs
for
the
house,
which
confirms
once
again
her
status
as
the
real
owner
(Transcript,
page
109)
4.03.2
The
argument
of
counsel
for
the
appellant
can
be
summarized
by
reproducing
these
comments:
[Translation]
Your
Honour,
my
claim
is
that
not
only
does
Article
1234
not
apply
in
this
case
with
respect
to
contradicting
the
terms
of
a
written
instrument,
but
they
can
be
contradicted
by
testimony.
Not
only
have
they
been
contradicted
by
testimony,
but
that
testimony
consists
of
admissions
by
the
two
parties.
The
admissions
by
the
parties
go
further
than
just
denying
the
observations
or
statements
of
those
appearing
before
the
court,
as
they
can
go
so
far
as
to
repudiate
the
very
existence
of
the
contract.
The
first
three
cases
I
mentioned
to
you
tell
us
so.
In
summary,
Your
Honour,
these
contracts
are
void
because
at
least
one
of
the
consents
was
never
obtained.
The
individual
-
Mrs.
Liliane
Jennewein—never
agreed
to
give
up
her
right
of
ownership
or
to
dispose
of
her
building,
and
there
was
never
any
consideration
even
though
there
appears
to
have
been
consideration
in
the
contract.
This
is
reinforced
even
more
by
the
fact
that
the
first
consideration—forty-
seven
thousand
(47,000)—was
undoubtedly
to
place
a
value
on
the
building
so
as
to
be
able
to
borrow
on
it,
and
the
second
was
for
one
dollar
($1).
Thus,
we
see
that
it
was
not
serious;
it
was
not
a
serious
sale.
(Transcript,
pages
51-52)
4.03.3
Decision
4.03.3(a)
The
rule
of
Article
1234
of
the
Civil
Code
that
testimony
cannot
be
received
to
contradict
or
vary
the
terms
of
a
valid
written
instrument
is
based
inter
alia
on
the
need
for
legal
stability,
and
therefore
economic
and
social
stability,
in
contract
relationships.
The
case
law
cited
by
counsel
for
the
appellant
provides
an
opening
for
the
production
of
evidence
only
insofar
as
that
evidence
might
lead
to
a
better
interpretation
of
the
contract
through
application
of
the
well-known
principle
of
form
and
substance:
no
matter
what
form
a
transaction
might
take
or
how
a
contract
is
drafted,
the
substance
is
always
the
vital
factor
for
understanding
the
nature
of
the
transaction
or
adequately
interpreting
the
contract.
The
Duke
of
Westminster
case,
supra,
is
well
known
on
this
topic.
In
the
Brodeur
case,
supra,
Couture,
C.J.T.C.
relied
on
the
substance
of
the
contract
at
issue,
in
which
the
word
"fees"
had
been
used,
to
decide
that
this
word
did
not
correspond
to
the
reality
of
the
payment
made,
which
was
a
payment
received
for
the
sale
of
goodwill.
Couture,
C.J.T.C.
referred
to
the
same
case
law
and
legal
theorists
as
have
been
cited
by
counsel
for
the
appellant
in
the
present
case
to
allow
the
evidence
to
be
heard.
The
evidence
did
not
change
the
substance
of
the
contract
but,
on
the
contrary,
made
it
possible
to
reveal
it
in
spite
of
a
faulty
form.
4.03.3(b)
The
Court
has
also
allowed
the
evidence
in
the
present
case.
Peter
Jennewein’s
testimony,
which
would
have
been
confirmed
by
his
mother
had
she
testified
(3.11),
proved
that
the
two
contracts
at
issue
were
based
on
a
simulation
in
order
in
fact
to
enable
the
son
to
obtain
a
licence
as
a
real
estate
broker.
Legal
theorists
are
unanimous
in
defining
simulation
as
a
legal
act
by
which
contractors
agree
to
conceal
their
true
contractual
will
from
third
persons
behind
an
apparent
act
that
contradicts
it,
modifies
it
or
changes
its
effect.
Considering
the
intention
of
the
parties
to
simulate
a
sale
to
the
appellant's
son,
there
is
no
question
that
the
contract
at
issue
satisfies
these
tests.
It
is
still
necessary
to
determine
the
rules
of
substantive
law
governing
the
contract
at
issue
before
holding
a
strictly
procedural
debate.
Thus,
since
the
substance
of
the
contracts
has
been
revealed,
it
is
now
appropriate
to
ask
what
evidentiary
rule
applies
to
a
simulation.
4.03.3(c)
The
statutory
provision
applicable
to
simulation
is
Article
1212
of
the
Civil
Code;
this
article
can
be
read
in
the
light
of
Article
1321
of
the
Code
Napoléon,
which
is
the
source
of
our
article,
in
order
to
determine
its
meaning
and
scope
with
greater
accuracy:
[Translation]
1212.
Counter-letters
have
effect
between
the
parties
to
them
only;
they
do
not
make
proof
against
third
persons.
1321.
Counter-letters
can
have
effect
between
the
parties
to
them
only;
they
have
no
effect
against
third
persons.
A
reading
of
these
two
provisions
seems
clear:
no
counter-letter
can
be
invoked
against
third
persons.
In
the
first
place,
it
might
be
asked
if
a
counterletter
must
be
written.
Québec
case
law
and
legal
theory,
which
have
been
very
much
inspired
by
French
legal
theory,
are
clear
on
this
point.
There
is
no
longer
any
doubt
that
any
simulation
necessarily
implies
a
counter-letter
even
if
there
was
no
written
instrument.
Moreover,
it
also
appears
to
be
accepted
that
the
term
“third
person"
in
Article
1212
of
the
Civil
Code
has
been
given
a
broad
definition
in
the
case
law.
The
third
person
is
therefore
any
person
with
an
interest
in
having
the
applicability
of
the
counter-letter
dismissed.
As
creditor
and
tax
collector,
the
Minister
of
National
Revenue
can
be
called
a
third
person.
Finally,
case
law
and
legal
theory
are
also
unanimous
as
to
the
fact
that
the
parties
are
bound
by
the
apparent
convention
as
against
third
persons.
They
can
in
no
way
make
the
counter-letter
available
against
a
third
person.
The
effect
of
applying
such
an
article
is
therefore
that
the
forms
of
evidence
counsel
for
the
appellant
has
tried
to
produce
to
prove
the
true
nature
of
the
agreement
between
Mrs.
Jennewein
and
her
son
are
inapplicable.
4.03.4
Thus,
although
the
case
law
produced
by
the
appellant
is
very
interesting,
it
cannot
be
applied
in
the
present
case
because
it
was
possible
in
none
of
those
cases
to
unite
the
constituent
elements
of
a
simulation.
Although
the
above
comments
could
close
the
debate
in
the
respondent's
favour,
the
Court
also
considers
it
appropriate
to
show
why
the
cases
of
Périard
v.
Paiement,
supra,
and
Abecassis
v.
Abecassis,
supra,
are
inapplicable
in
the
present
case.
As
has
been
shown,
the
principle
to
be
drawn
from
those
cases
is
that
testimony
is
admissible
to
permit
one
of
the
parties
to
the
contract
to
prove
as
against
his
co-contractor
that
the
contract
signed
is
void.
Is
the
contract
void?
The
appellant
has
raised
two
grounds
for
declaring
it
to
be
void.
In
the
first
place,
it
should
be
declared
to
be
void
because
Mrs.
Jennewein
never
consented
to
sell
her
building.
It
should
therefore
be
possible
to
declare
the
contract
to
be
void
for
lack
of
consent.
I
find
this
argument
hard
to
support
in
the
context
of
a
counter-letter.
It
is
in
fact
not
at
all
surprising
that
the
parties
to
a
simulation
do
not
consent
to
the
apparent
act
intended
to
deceive
third
persons
even
though
they
have
taken
the
trouble
to
create
a
hidden
convention
that
will
govern
the
parties.
Counsel
for
the
appellant
also
submits
that
the
fictitious
contract
is
invalid
because
of
the
lack
of
consideration.
To
do
this,
counsel
likens
the
payment
of
a
certain
amount
of
money
to
consideration.
Is
such
an
operation
appropriate?
Furthermore,
is
the
presence
of
consideration
one
of
the
essential
elements
in
the
formation
of
a
contract
under
Article
984
of
the
Civil
Code?
The
response
to
these
two
questions
will
be
brief
because
the
presence
of
a
lawful
consideration
is
one
of
the
four
requisites
of
a
valid
contract.
Thus,
the
essential
purpose
of
the
contract
between
the
parties
must
be
consistent
with
public
order
and
good
morals.
Moreover,
Tancelin
points
out
in
Des
Obligations
(Nos.
168-70)
that
the
term
"consideration"
as
found
in
Article
984
of
the
Civil
Code
is
absolutely
not
related
to
the
concept
of
consideration”
chiefly
used
in
English
law.
Counsel
for
the
appellant
appears
to
have
tried
to
take
advantage
of
an
ambiguity
that
is,
however,
hardly
convincing.
The
case
of
Périard
v.
Paiement,
supra,
is
therefore
inapplicable
because
there
was
no
ground
for
declaring
the
agreement
between
Mrs.
Jennewein
and
her
son
to
be
void.
4.03.5
The
comments
of
Beaudry-Lacantinerie
in
his
Traité
théorique
et
pratique
de
droit
civil,
3rd
ed.,
Vol.
IV,
No.
2409,explain
clearly
the
purpose
behind
Article
1341
of
the
Code
Napoléon
and
therefore,
because
of
the
similarities
between
them,
that
behind
Article
1212
of
the
Civil
Code:
[Translation]
However,
the
purpose
of
the
lawmakers
in
Art.
1321
was
to
prevent
possible
prejudice
to
the
general
public
from
the
application
of
an
unknown
counter-letter,
so
their
provision
protects
not
only
those
against
whom
the
act
is
directed
with
a
fraudulent
intention
but
also
all
those
whose
interests,
assessed
from
the
point
of
view
of
the
apparent
situation
of
the
author,
it
happens
to
infringe.
This
objective
of
protection
makes
it
possible
for
third
persons
to
take
advantage
of
the
effects
of
the
apparent
contract.
As
for
the
holder
of
the
rights
recognized
in
the
counter-letter—Mrs.
Jennewein
in
the
present
case—
she
acted
with
the
good
intention
of
helping
her
son
but
must
suffer
the
taxation
consequences
of
the
simulated
transaction
and
of
her
son's
debt
to
the
respondent.
4.03.6
The
terms
of
subsections
160(1),
160(2)
and
160(3)
of
the
Income
Tax
Act
are
clear
(4.01).
In
any
transfer
of
property
between
persons
not
dealing
at
arm's
length
where
one
of
those
two
persons
owes
certain
amounts
of
income
tax,
those
individuals
are
jointly
and
severally
liable
for
the
amount
due
to
the
Minister
of
National
Revenue.
Considering
that
the
notarial
written
instruments
are
evidence
of
their
content
in
the
present
case
and
prove
that
the
building
was
transferred
from
Mrs.
Jennewein
to
her
son,
she
is
responsible
for
paying
the
income
tax
owed
by
her
son
in
the
amount
of
$20,657.69.
5.
Conclusion
The
appeal
is
dismissed
in
accordance
with
the
above
reasons
for
judgment.
Appeal
dismissed.
Email this Content