[OFFICIAL ENGLISH TRANSLATION]
Date: 20020729
Docket: 2001-2919(IT)I
BETWEEN:
JACQUELIN GIRARD,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR JUDGMENT
Tardif, J.T.C.C.
[1] This is an appeal from an
assessment for the 1999 taxation year.
[2] The point for determination is
whether the Minister of National Revenue (the
"Minister") was correct in disallowing the appellant
the amount of $8,737 claimed in respect of carrying charges and
interest expenses in his income tax return for the 1999 taxation
year.
[3] The facts assumed in making and
confirming the assessment in the instant appeal are as
follows:
[TRANSLATION]
(a) the appellant is
one of the limited partners in the limited partnership, Place des
Landes Enr.;
(b) by deed of sale
dated December 18, 1987, a copy of which was filed at the
registry office of the registration division of Portneuf under
number 309 490, the limited partnership, Place des
Landes Enr., and Gaétan Bergeron, real estate
investment promoter, (hereinafter "Place des Landes
Enr.") purchased immovables (hereinafter the
"immovable") located in the municipality of
Saint-Augustin-de-Desmaures;
(c) in February
1996, Place des Landes Enr. sold the immovable to Compagnie
Algoss Inc ("Algoss"), a company legally incorporated
under Part 1A of the "Companies Act",
having its head office in Québec;
(d) according to the
1996 contract of sale, Algoss assumed the existing $710,803
hypothec with the National Bank of Canada (the "Bank")
and undertook to pay a bank overdraft of $3,102.98 for the tax
reserve for and on behalf of the vendor;
(e) in May 1998,
Algoss experienced financial difficulties and failed to meet its
obligations toward the Bank;
(f) the Bank
instituted an action in the Superior Court, District of
Chicoutimi, against the limited partners by virtue of the surety
they gave in respect of the obligations of Place des Landes Enr.
and Algoss Inc. toward the Bank under the terms of a deed of
hypothec dated June 4, 1991;
(g) the Bank took
the necessary action to exercise its rights as a hypothec
creditor over the immovable, the property of Algoss, and to have
the immovable sold by private sale subject to court control;
(h) as appears in
the letter dated March 1, 1999, sent to Place des Landes
Enr. by the Bank, there was an agreement between the limited
partners and the Bank to the effect that, provided the sale under
court control took place, the limited partners undertook to
purchase the immovable personally or through a company to be
formed for the sum of $705,000 and furthermore to pay at the time
of purchase half the amount of $21,598.85 paid to
Hydro-Québec by the Bank, that is, $10,799.43;
(i) on
June 23, 1999, Pierre Lévesque, counsel and
legal adviser, confirmed for the limited partners that a final
agreement had been entered into with a new limited partnership
(Groupe Serge Gagnon) for the purpose of transferring it the
limited partners' rights on the purchase of the immovable for
$610,000;
(j) thus, in
accordance with the agreement in principle entered into between
the limited partners and the Bank, the overall and final
contribution of all the limited partners amounted to $105,799.43
($705,000 + $10,799.43 - $610,000);
(k) the appellant
was asked to pay $8,137.43, which amount was established on the
basis of his adjusted interest in Place des Landes;
(l) the
private sale under court control of the immovable was made on
October 27, 1999, under number 498,763 at the Portneuf
registry office for the sum of $705,000;
(m) as a result of the
deed of sale for $705,000 and the payment of $10,799.43, the Bank
gave the limited partners a general and final discharge and
released them from their surety; the Bank discontinued its legal
action against the limited partners;
(n) in addition, the
appellant paid Pierre Lévesque $579.34 for his share
of the fees in the matter of the surety to the Bank;
(o) at this stage of
the proceedings, the administrative fees of $20 paid to the HSBC
Bank should be allocated.
[4] After being sworn, the appellant
admitted all the facts that were assumed.
[5] As a result, the burden of proof
was on the appellant; in other words, the appellant had to show
on the balance of evidence that his claims were valid.
[6] The appellant submitted only one
piece of evidence in support of his appeal. He stated that the
Minister had allowed all the other limited partners in the same
case the deduction that he himself had claimed and that had been
disallowed. He even filed, as Exhibit A-1, a list of
the taxpayers with their social insurance numbers, adding that
all those persons had been allowed the deduction he had been
disallowed.
[7] This was clearly not an admissible
argument since, each case standing on its own merits, there may
be a multitude of factors differing from those in the
appellant's case. Furthermore, it could not be determined on
the evidence adduced whether the cases in question had been the
subject of any kind of audit or determination.
[8] Moreover, I clearly informed the
appellant before he made his arguments that references to other
cases were not relevant in support of his appeal. Despite that
clarification, the appellant brought no reasons, evidence or
arguments supporting the soundness of his appeal. Moreover, after
he had admitted all the facts assumed by the respondent in making
the assessment, it became very difficult, if not impossible, for
him to discharge the burden of proof that was on him.
[9] Therefore, the appeal must be
dismissed.
Signed at Ottawa, Canada, this 29th day of July 2002.
J.T.C.C.
Translation certified true
on this 7th day of November 2003.
Sophie Debbané, Revisor
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