DUMOULIN,
J.:—The
above-named
firm
appeals
from
the
judgment
issued
on
March
11,
1968
in
which
the
Tax
Appeal
Board
confirmed
the
assessments
made
by
the
Minister
of
National
Revenue
for
the
years
1959
($1,061.52),
1960
($69,027.18),
1961
($73,657.90),
1962
($137,244.55)
and
1963
($21,338.49),
and
totalling
$302,329.64.
in
support
of
its
case
appellant
contends
as
follows
:
1.
By
contract
executed
at
Montreal
on
January
12,
1959,
Canit
Construction
Québec
Limitée
and
A.
Janin
&
Compagnie
Limitée
(the
appellant),
operating
jointly
as
Canit
Janin
Joint
Venture,
jointly
and
severally
undertook
to
build
for
Quebec
Cartier
Mining
Company
(Canadian
subsidiary
of
United
Steel
of
America),
an
inland
port
and
allied
structures,
in
conformity
with
plans
and
specifications,
for
an
amount
of
$13,233,467.00.
2.
While
these
structures
were
being
erected
it
became
clear
that
the
plans
and
specifications
were
inaccurate
and
faulty,
thereby
significantly
altering
the
work
to
be
done,
and
its
cost.
It
is
alleged
in
paragraph
3
that
the
refusal
by
Quebec
Car-
tier
Mining
to
modify
the
contract
(Exhibit
P-1)
or
consider
the
contractors’
offer
to
continue
performance
at
a
loss,
compelled
the
latter
‘after
many
meetings,
and
after
having
gone
to
considerable
expense,
to
halt
the
work,
although
conscious
that
they
were
thereby
seriously
injuring
their
reputation,
and
this
due
to
the
fault
of
Quebee
Cartier
Mining
Company’’.
Paragraph
4
goes
on
to
say
that
when
the
contract
was
breached
the
moneys
due
to
the
contractors
amounted
to
$7,047,270.96,
‘‘and
damages
were
estimated
at
$5,000,000,
bringing
the
debt
of
Quebec
Cartier
Mining
Company
to
$12,047,270.96”.
Paragraph
5
of
the
notice
of
appeal
summarizes
the
long
and
rather
tedious
series
of
legal
actions,
negotiations
and
correspondence,
including
an
expert
opinion
ordered
by
Court
decree,
which
ultimatel
brought
the
parties
to
the
following
solution
of
the
dispute:
5.
In
order
to
compensate
the
contractors,
terminate
the
action
brought
in
the
Superior
Court,
Rimouski
District,
Province
of
Quebec,
under
No.
24263,
and
foreclose
other
suits
and
claims,
Quebec
Cartier
Mining
Company
and
the
contractors
(the
latter
being
placed
in
an
extremely
precarious
position
by
the
reprehensible
acts
of
Quebec
Cartier
Mining
Company,
and
being
in
urgent
need
of
liquid
funds
to
survive)
agreed
by
a
transaction
dated
April
3,
1962,
to
the
payment
by
Quebec
Cartier
Mining
Company
of
an
amount
of
$4,000,000.00
by
way
of
general
and
final
indemnity.
We
may
note
in
passing
that
while
the
respondent,
admits
the
transactional
act
and
the
amount
agreed,
he
denies
the
remainder
of
paragraph
5.
Half
the
stipulated
amount,
or
$2,000,000
was
the
share
allotted
to
appellant.
We
find
the
basis
of
the
suit
set
out
as
follows
in
paragraph
12:
12.
The
sum
of
$2,000,000.00
received
by
appellant
includes
an
allowance
for
the
injury
done
to
its
name
and
reputation
and
compensates
in
the
amount
of
$881,872.40
for
the
damages
resulting
therefrom.
As
the
Tax
Appeal
Board
dismissed
this
claim,
both
in
law
and
on
the
facts,
and
ruled
that
the
amount
of
$2,000,000
did
not
include
any
compensation
for
damage
to
reputation
or
loss
of
prestige,
but
was
only
the
pro
tanto
payment
for
work
done
and
materials
supplied,
appellant
has
brought
the
present
appeal.
For
all
practical
purposes,
respondent’s
reply
is
set
out
in
paragraphs
8,
9
and
10
of
the
defence
pleadings:
8.
The
amount
of
$2,000,000.00
was
paid
to
Appellant,
and
received
by
it,
solely
in
payment
for
the
work
actually
completed
at
the
time
of
the
transaction,
and
other
rights
and
remedies
deriving
from
the
contract
and
the
legislative
provisions
regarding
contractual
performance,
i.e.
the
ultimate
liability
of
the
contractor
for
partial
or
total
loss
“of
the
building
within
five
years
of
its
construction’’,
and
prescription
of
this
remedy
after
five
years,
provided
respectively
in
Articles
1688
and
2259
of
the
Civil
Code
of
Quebec.
9.
Appellant
suffered
no
damage
by
way
of
injury
to
its
name
and
reputation,
by
the
fault
of
the
Owner,
through
termination
of
the
contract
in
question,
and
the
decision
to
suspend
the
said
work
was
taken
of
its
own
accord.
10.
No
part
of
this
amount
of
$2,000,000.00
was
paid
or
received
on
account
of
the
alleged
damages
to
Appellant’s
name
and
reputation,
referred
to
in
para.
9.
The
issue
being
thus
joined,
the
parties
are
agreed
that
the
evidence
submitted
to
the
Tax
Appeal
Board
could
be
used
for
the
same
purposes
here.
This
evidence,
oral
as
well
as
documentary,
is
contained
in
four
volumes
introduced
as
numbers
C-1,
C-2,
C-3
and
C-4.
A
few
details
will
serve
as
an
explanatory
introduction
to
the
transaction
of
April
3,
1962.
The
contract
(Exhibit
P-1)
provided
for
a
deep-water
harbour
installation
on
the
north
shore
of
the
St.
Lawrence,
which
would
connect
this
seaport
with
the
mining
centre
of
Gagnon,
located
a
good
distance
inland,
by
means
of
a
railway.
Appellant’s
accounts
show
that
for
the
years
1959,
1961,
1962
and
1963,
operations
were
greatly
in
deficit,
while
for
1960
they
showed
a
profit.
The
Janin
company
and
its
partner,
Canit
Construction,
tried
vainly
to
secure
an
upward
revision
of
the
contract,
and
then
brought
an
action
against
Cartier
Mining
for
$7,047,270.96,
and
ceased
operations.
Cartier
Mining
in
its
turn
responded
with
a
counterclaim
for
damages
for
what
it
would
have
to
pay
to
complete
the
work.
The
contractors
returned
with
a
request
for
an
injunction
and
the
present
appellant
brought
an
action
against
Quebec
Cartier
Mining
for
$5,000,000
for
defamation
and
loss
of
business,
dated
February
15,
1962;
notice
of
this
action
was
however
never
given
to
Cartier
Mining,
possibly
in
the
expectation
that
agreement
could
be
reached.
This
was
the
situation
when
the
transaction
of
April
3,
1962
was
concluded,
a
transaction
which
constitutes
the
chief
point
in
the
argument,
and
closes
off
all
claims
on
both
sides,
whatever
their
nature
or
source,
aS
well
as
any
remedy
sought
or
to
be
sought,
with
the
sole
exception
of
those
already
excepted
under
the
provisions
of
Articles
1688
and
2259.
It
is
only
necessary
to
quote
a
few
passages
from
this
document
to
indicate
its
purport,
namely
that
of
a
complete
and
reciprocal
release
between
the
parties:
WHEREAS
in
the
course
of
carrying
out
said
Contract
(the
contract
signed
in
Montreal
on
January
12,
1959),
as
amended,
disputes
arose
between
the
parties
as
a
result
of
which
Contractor
ceased
to
work
under
said
Contract
and
brought
suit
against
Owner
to
set
aside
said
Contract,
as
amended,
on
the
ground
of
error,
said
suit
bearing
record
No.
24263
in
the
Superior
Court
of
the
District
of
Rimouski
and
the
Owner
has
brought
a
crossdemand
against
Contractor
in
damages
under
the
said
record
number
;
WHEREAS
Owner,
without
prejudice
to
and
under
reserve
of
its
denial
of
liability
in
the
circumstances
and
after
negotiations
with
representatives
of
Contractor,
is
prepared
to
compromise
and
settle
all
disputes
and
matters
in
contention
between
it
and
Contractor
in
connection
with
said
Contract,
as
amended,
and
said
suit,
the
Contractor
is
prepared
to
enter
into
this
Contr
act
of
Transaction
with
Owner;
WHEREFORE,
in
consideration
of
the
payment
by
Owner
to
Contractor
of
the
sum
of
$4,000,000,
in
addition
to
those
sums
already
paid
by
Owner
to
Contractor,
Contractor
hereby
releases
and
discharges
Owner,
its
agents,
employees,
officers
and
servants
.
.
.
from
any
and
all
claims,
demands,
actions,
rights
of
action,
expenses
and
costs
whatsoever
arising
out
of
or
connected
with
said
Contract,
as
amended,
and
all
other
Contracts
between
Owner
and
Contractor
as
well
as
all
work
performed
by
Contractor
for
Owner
at
Port
Cartier
and
all
other
causes
of
any
nature
whatsoever.
.
.
.
And,
further
on,
this
stipulation
foreclosing
any
claim
“brought
or
to
be
brought”:
Contractor
recognizes
and
Owner
and
Contractor
acknowledge
that
the
foregoing
payments
are
being
made
in
full
and
final
settlement
of
said
suits
and
of
all
disputed
claims
both
of
Owner
and
Contractor
and
interest
thereon
and
that
neither
Owner
nor
Contractor
has
any
other
claim
one
against
the
other
in
connection
with
said
Contract,
as
amended,
or
otherwise
that
has
not
been
disclosed,
negotiated,
settled
and
transacted.
This
transaction
credited
appellant,
together
with
its
associate
Canit
Construction,
with
a
total
sum
of
$13,427,047.36,
whereas
they
had
previously
claimed
the
sum
of
$16,473,983.32.
The
meaning
and
effect
of
the
transaction
are
clearly
analyzed
in
the
decision
of
the
learned
member
of
the
Tax
Appeal
Board,
Me
Maurice
Boisvert,
Q.
C.
(vol.
2,
p.
44)
who
concluded
that
:
Appellant
claims
in
its
notice
of
appeal
that
“the
sum
of
$2,000,000”
which
it
received
“includes
an
allowance
for
the
injury
done
to
its
name
and
reputation,
and
compensates
in
the
amount
of
$881,872.40
for
the
damages
resulting
therefrom’’.
Respondent
for
its
part
claims
that
this
sum
of
$2,000,000
was
paid
to
recompense
appellant
for
the
cost
of
all
work
performed
for
Cartier
at
the
time
the
work
was
halted
by
appellant,
thus
terminating
its
contract.
At
first
glance
it
seems
a
very
important
question
of
law
is
presented;
after
examining
the
evidence,
it
proves
to
be
purely
and
simply
a
question
of
fact,
namely
whether
the
sum
of
$2,000,000
paid
by
Cartier
represented
the
cost
of
the
work
performed.
In
my
opinion
there
can
be
no
doubt
of
this.
An
expert
opinion
has
revealed
that
the
cost
of
the
work
performed
exceeded
by
a
considerable
margin
the
sum
provided
in
the
contract.
For
this,
appellant
claimed
the
sum
of
$7,047,270.96,
and
Cartier
agreed
to
pay
$4,000,000;
$2,000,000
of
this
went
to
appellant,
who
accepted
it.
I
am
also
in
accord
with
the
following:
It
is
not
contested
that
damages
were
suffered
on
both
sides.
That
is
not
the
issue.
If
the
parties
to
the
suit,
in
making
their
settlement,
did
not
allow
for
the
damages
that
were
suffered
and
waived
such
claims
between
themselves,
as
was
in
fact
the
case,
these
damages
cannot
now
be
invoked
to
deny
the
assessment.
In
the
first
place,
these
damages
were
not
liquidated
during
the
years
under
appeal.
An
assessment
is
not
based
on
what
may
occur
in
the
future,
but
rather
on
the
concrete
result
of
current
accounting
for
each
taxable
year.
And
this
final
observation
(vol.
2,
p.
51)
:
The
evidence
has
shown
that
for
each
of
the
years
in
question,
appellant
deducted
the
losses
which
it
sustained
as
a
result
of
the
contract.
The
sum
of
$2,000,000
which
it
received
affected
its
financial
statements
for
the
years
under
appeal
by
reducing
its
losses
or
increasing
its
profits.
Like
the
learned
member,
I
see
no
Justification,
however
vague,
for
thinking
that
damages
at
the
duly
liquidated
rate
of
$881,872.40
were
included
in
the
transactional
payment
of
$2,000,000.
As,
moreover,
such
damages
could
not
have
existed
on
April
3,
1962,
what
prodigious
feat
of
clairvoyance
could
estimate
such
a
problematical
and
conjectural
figure?
Having
said
this,
I
hasten
to
add
that
unless
I
am
mistaken
my
task
has
been
made
unusually
simple
by
the
admission
by
counsel
for
the
Janin
company,
that
the
transaction
did
not
include
quasi-delictual
damages;
this
admission
in
the
oral
pleading
has
not
ceased
to
amaze
me,
and
I
requested
it
be
repeated.
If
this
is
so,
in
appellant’s
own
opinion,
what
grounds
of
compensation
must
this
payment
of
$2,000,000
be
applied
to?—if
not
to
that
of
taxable,
‘‘earned
income’’.
Any
attempt
to
alter
its
nature
at
this
late
date
would
be
inadmissible.
Such
a
settlement,
though
it
only
reduced
the
losses
sustained,
was
not
duly
pleaded
at
the
correct
time,
and
regrettable
as
such
omission
may
be,
it
does
not
concern
me.
For
these
reasons,
the
appeal
is
dismissed
with
costs
in
favour
of
respondent.
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