Couture,
C.J.T.C.
[Translation]:—This
is
an
appeal
from
an
assessment
made
by
the
respondent
on
January
20,
1983,
under
the
authority
of
section
160
of
the
Income
Tax
Act
(the
Act).
The
salient
facts
on
which
the
respondent
relied
in
making
the
assessment,
which
were
not
disputed
or
denied
by
the
appellant,
may
be
summarized
as
follows:
The
appellant
is
the
wife
of
Jean-Marc
Fontaine.
On
June
22,
1980,
Jean-
Marc
Fontaine
was
indebted
to
the
Minister
of
National
Revenue
for
the
amount
of
$8,257.71,
representing
unpaid
income
tax,
interest
and
penalties
for
the
1975,
1976,
and
1977
taxation
years,
in
accordance
with
the
notices
of
assessment
dated
March
7,
1980.
On
May
5,
1983
the
respondent
made
an
assessment
for
the
1979
taxation
year
by
virtue
of
which
he
assessed
income
tax
of
$1,723.21,
interest
to
July
22,
1980
of
$43.10
and
penalties
in
the
amount
of
$292.95,
for
a
total
of
$2,059.26.
this
brought
Jean-Marc
Fontaine's
debt
at
July
22,
1980
to
$10,316.97,
less
an
instalment
of
$474.72
that
the
respondent
acknowledged
had
been
received,
for
a
balance
of
$9,842.25.
On
March
7,
1980,
Jean-Marc
Fontaine,
who
until
then
had
operated
a
business
under
the
name
Bureau
Provincial
de
Réclamations
Enrg,
incorporated
a
company
under
the
name
Bureau
Provincial
de
Réclamations
Inc.
Jean-Marc
Fontaine
was
the
beneficial
owner
of
99
per
cent
of
the
common
shares
of
the
company
and
the
appellant
was
the
beneficial
owner
of
1
per
cent.
On
April
5,
1980,
the
appellant
and
her
husband
effected
an
exchange
of
shares,
so
that
after
the
exchange
the
appellant
was
the
beneficial
owner
of
99
per
cent
of
the
shares
of
the
company
and
her
husband
had
1
per
cent.
On
July
22,
1980
Jean-Marc
Fontaine,
who
was
then
the
owner
of
a
residence
situated
at
1475
St
Louis
Street,
Terrebonne,
transferred
ownership
of
this
residence
to
the
appellant
pursuant
to
a
sale
for
the
sum
of
$70,000,
including
the
building,
the
lot
and
the
furniture.
As
payment
for
this
purchase,
the
appellant
assumed
a
mortgage
in
the
amount
of
$46,926.57
and
gave
her
husband
a
receipt
for
the
sum
of
$23,073.43
for
performance
of
the
gifts
provided
in
her
marriage
contract.
On
the
same
day,
July
22,
1980,
the
appellant
sold
the
property
to
the
company
Bureau
Provincial
de
Réclamations
Inc
for
the
sum
of
$63,000,
including
the
$46,926.57
outstanding
on
the
mortgage
and
the
$16,073.43
balance
of
the
sale
price,
payable
in
five
years.
In
assessing
the
appellant
the
respondent
relied
on
the
provisions
of
subsection
160(1)
in
effect
in
1980,
which
read
as
follows:
160
Tax
liability
re
property
transferred
to
a
spouse
or
to
minors
(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,
or
(b)
a
person
who
was
under
18
years
of
age
the
following
rules
apply:
(c)
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
have
been
if
it
were
not
for
the
operation
of
section
74
or
section
75,
as
the
case
may
be,
in
respect
of
income
from
the
property
so
transferred
or
from
property
substituted
therefor;
and
(d)
the
transferee
and
transferor
are
jointly
and
severally
liable
to
pay
the
lesser
of
(i)
any
amount
that
the
transferor
was
liable
to
pay
under
this
Act
on
the
day
of
the
transfer,
and
(ii)
a
part
of
any
amount
that
the
transferor
was
so
liable
to
pay
equal
to
the
value
of
the
property
so
transferred;
but
nothing
in
this
subsection
shall
be
deemed
to
limit
the
liability
of
the
transferor
under
any
other
provision
of
this
Act.
Counsel
for
the
appellant
submitted
two
arguments
in
support
of
his
contention
that
the
assessment
dated
January
20,
1983
was
not
valid.
First,
he
argued
that
the
two
transactions,
that
is,
the
sale
of
the
property
on
July
22,
1980
by
Jean-Marc
Fontaine
to
his
wife,
as
recorded
in
a
notarized
deed,
followed
on
the
same
day
by
the
sale
of
the
property
by
the
appellant
to
Bureau
Provincial
de
Réclamations
Inc,
must
be
interpreted
as
reflecting
an
intention
on
the
part
of
the
parties
involved
in
these
transactions
to
transfer
the
property
to
the
company.
He
then
argued
that
the
appellant's
participation
should
be
more
or
less
ignored.
He
submitted
therefore
that
if
we
take
this
interpretation
of
the
transactions,
subsection
160(1)
does
not
apply
in
the
circumstances.
I
am
not
entirely
in
agreement
with
the
argument
of
counsel
for
the
appellant,
particularly
when
we
examine
the
wording
of
subsection
(1),
which
reads:
Where
a
person
has,
on
or
after
the
1st
day
of
May,
1981,
transferred
property,
either
directly
or
indirectly,
by
means
of
a
trust
or
by
any
other
means
whatever.
.
.
[Emphasis
added.]
Considering
that
the
appellant
was,
on
the
date
of
the
transaction,
the
beneficial
owner
of
99
per
cent
of
the
common
shares
of
the
company
I
would
tend
to
believe
that
a
sale
of
the
property
directly
to
the
company
would
have
been
an
indirect
transfer
to
the
appellant,
in
those
circumstances.
I
do
not,
however,
have
to
consider
this
possibility
because
the
evidence
as
presented
does
not
lead
to
such
a
finding.
The
evidence
showed
that
there
were
in
fact
two
consecutive
transactions,
that
is,
the
first
from
Jean-Marc
Fontaine
to
the
appellant,
and
the
second
from
the
appellant
to
the
company;
both
transactions
were
confirmed
by
notarized
deeds.
If
there
were
specific
reasons
for
this
procedure,
it
is
up
to
the
appellant
or
her
husband
to
show
them
in
their
testimony,
and
counsel
for
the
respondent
would
have
been
entitled
to
examine
them
to
determine
the
validity
of
the
reasons.
No
evidence
was
introduced
on
this
point,
and
accordingly,
on
the
basis
of
the
evidence,
I
find
that
Jean-Marc
Fontaine
actually
transferred
the
property
in
question
to
his
wife,
and
that
this
transfer
falls
within
the
ambit
of
section
160
of
the
Act.
The
second
argument
presented
by
counsel
for
the
appellant
was
to
the
effect
that
if
subsection
160(1)
as
it
read
at
the
time
is
to
apply,
the
appellant
would
have
had
to
obtain
a
benefit
from
the
transfer
of
the
property.
He
argued
that
the
fact
that
she
assumed
the
mortgage
on
the
property,
and
that
she
also
gave
her
husband
a
receipt
for
the
amount
of
the
benefit
he
contracted
to
give
her
in
their
marriage
contract
showed
that
the
appellant
had
received
no
benefit
or
advantage
from
the
transaction.
He
based
his
arguments
on
subparagraph
(d)(ii)
of
subsection
160(1),
which
then
read
as
follows:
(d)
the
transferee
and
transferor
are
jointly
and
severally
liable
to
pay
the
lesser
of
(i)
N/a
(ii)
a
part
of
any
amount
that
the
transferor
was
so
liable
to
pay
equal
to
the
value
of
the
property
so
transferred.
I
do
not
see
how
this
provision
could
be
interpreted
in
the
manner
argued
by
counsel
for
the
appellant.
This
provision
does
not
refer
to
the
value
to
the
transferee
of
the
property,
but
only
to
the
value
of
the
property
at
the
time
of
the
transfer.
In
the
case
at
bar
the
respondent
argued
that
the
market
value
of
the
property
transferred
was
$63,000
(paragraph
3(j)
of
the
reply
to
the
notice
of
appeal)
and
no
evidence
was
presented
to
contradict
this
appraisal,
although
the
burden
was
on
the
appellant
to
produce
such
evidence.
In
Fasken
v.
M.N.R.,
[1948]
C.T.C.
265;
49
D.T.C.
491,
cited
by
counsel
for
the
respondent,
the
Chief
Justice
of
the
Exchequer
Court,
as
it
then
was,
stated
the
following
with
respect
to
the
definition
of
the
word
"transfer":
The
word
"transfer"
is
not
a
term
of
art
and
has
not
a
technical
meaning.
It
is
not
necessary
to
a
transfer
of
property
from
a
husband
to
his
wife
that
it
should
be
made
in
any
particular
form
or
that
it
should
be
made
directly.
All
that
is
required
is
that
the
husband
should
so
deal
with
the
property
as
to
divest
himself
of
it
and
vest
it
in
his
wife,
that
is
to
say,
pass
the
property
from
himself
to
her.
The
means
by
which
he
accomplishes
this
result,
whether
direct
or
circuitous,
may
properly
be
called
a
transfer.
Because,
as
the
evidence
showed,
Jean-Marc
Fontaine
had
transferred
a
property
having
a
market
value
of
$63,000
to
his
wife,
the
appellant,
on
July
22,
1980,
and
on
that
date
he
was
indebted
to
the
Minister
of
National
Revenue
for
the
amount
of
$9,842.25,
this
evidence
shows
that
the
elements
required
for
subsection
160(1)
of
the
Act
to
apply
were
present.
For
these
reasons
the
appeal
is
dismissed.
It
should
also
be
noted
that
counsel
for
the
respondent
alleged
that
Jean-Marc
Fontaine
was
indebted
to
the
respondent
on
July
22,
1980
for
the
amount
of
$9,842.25
(paragraph
3
of
the
reply
to
the
notice
of
appeal)
and
this
allegation
was
not
disputed
by
the
appellant.
However,
the
assessment
dated
January
20,
1983
made
by
the
appellant
established
the
appellant's
indebtedness
at
$9,645.33,
or
$196.62
less,
about
which
no
information
was
provided
to
the
court.
This
assessment
is
therefore
valid.
Appeal
dismissed.
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