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Citation: 2004TCC802
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Date: 20041208
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Docket: 2003-3033(GST)I
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BETWEEN:
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BUON HO LIM,
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Appellant,
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and
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HER MAJESTY THE QUEEN,
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Respondent.
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[OFFICIAL ENGLISH TRANSLATION]
REASONS FOR JUDGMENT
Lamarre Proulx J.
[1] This is an appeal pursuant to the
informal procedure from an assessment bearing number 03110466,
dated November 8, 2002, in the amount of $19,551.81, for the
period from April 1 to September 30, 2000.
[2] The Appellant claims that did not
have the capability to provide the services set out in the two
invoices for the amounts of $100,000 and
$125,000 respectively, and therefore, there was no taxable
supply. The Respondent considers that, by issuing the two
invoices, the Appellant took on the quality of a supplier of
taxable supplies. The amount of the invoices indicates that he
was not a small supplier and should have collected tax.
[3] The first invoice is dated June 2,
2000, and the second is dated August 8, 2000. These invoices
were filed as exhibits A-7 and A-8. They read as
follows:
[TRANSLATION]
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(Exhibit A-7)
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BUON HO LIM
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8820 10E AVENUE
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MONTREAL, QUEBEC
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H1Z 3C2
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JUNE 2, 2000
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2866-0272 QUÉBEC INC.
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15 GAMBLE STREET EAST, SUITE #204
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ROUYN-NORANDA, QUEBEC
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J9X 3B6
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ATTENTION: GILLES FISET, PRESIDENT
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FEES FOR CONSULTATION AND SEARCH FOR FUNDING FOR VARIOUS
FUTURE INVESTMENT PROJECTS, AS PER DISCUSSIONS
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$99,500.00
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ALLOWANCE FOR AUTOMOBILE
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$65.00
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PER DIEM FOR LUNCH WITH POTENTIAL INVESTORS AND
BROKERS
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$425.00
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MISCELLANEOUS DISBURSEMENTS (STATIONERY, STAMPS,
ETC.)
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$10.00
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TOTAL
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$100,000.00
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P.S. These fees will be
payable via the surrender of a total of four hundred
thousand (400,000) shares in Exploration Loubel inc.
belonging to the company 2866-0272 Québec inc.
over the next few weeks.
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INVOICE #020600
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(initials)
BUON HO LIN
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(signature)
2866-0272 QUÉBEC INC.
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By Gilles Fiset, President
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(Exhibit A-8)
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BUON HO LIM
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8820 10E AVENUE
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MONTREAL, QUEBEC
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H1Z 3C2
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AUGUST 8, 2000
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2866-0272 QUÉBEC INC.
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15 GAMBLE STREET EAST, SUITE #204
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ROUYN-NORANDA, QUEBEC
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J9X 3B6
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ATTENTION: GILLES FISET, PRESIDENT
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FEES FOR CONSULTATION AND SEARCH FOR FUNDING FOR VARIOUS
FUTURE INVESTMENT PROJECTS, AS PER DISCUSSIONS
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$124,325.00
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ALLOWANCE FOR AUTOMOBILE
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$85.00
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PER DIEM FOR LUNCH WITH POTENTIAL INVESTORS AND
BROKERS
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$575.00
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MISCELLANEOUS DISBURSEMENTS (STATIONERY, STAMPS,
ETC.)
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$15.00
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TOTAL
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$125,000.00
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P.S. These fees will be
payable via the surrender of a total of one hundred
thousand (100,000) shares in Exploration Tom inc. belonging
to the company 2866-0272 Québec inc. over the
next few weeks.
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INVOICE #080800
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(initials)
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(signature)
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BUON HO LIN
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2866-0272 QUÉBEC INC.
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By Gilles Fiset, President
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[4] In his testimony, the Appellant
acknowledged that the initials shown on Exhibit A-7
were indeed his initials. He did not recognize the initials on
Exhibit A-8. He also acknowledged that he had received
the shares mentioned in Exhibit A-7, but he added that
he was not their actual owner. He says he has never met Mr.
Fiset.
[5] He explained the circumstances
surrounding the signing of at least one of the invoices to his
counsel as follows:
[TRANSLATION]
Q. OK, so you did
not provide those services?
A. No.
Q. All right, we see
below on the . . . on the . . . who finally approached you? How
did that work? Why is your signature on at least one of the
invoices? How . . . can you describe to the Court how that took
place?
A. What happened,
Madam Justice, was that my friend Jacky told me he had a deal for
me. How do I say . . . how am I going to say that? All you had to
do was sign an invoice and you'd have a little bit of money . . .
and then I never got it; nothing ever happened.
Q. And how did that
invoice come to you?
A. Well, I received
it through him, Madam Justice, then they faxed it, and all I did
was sign it. I signed it, that's all.
Q. OK. Were you
given a copy of that invoice?
A. No.
Q. Did you see the
original invoice?
A. No.
Q. OK, did you
receive something in return for that or further to that
document?
A. No.
Q. OK. At the bottom
it states, if you look in the . . . PS, there, do you see the
note?
A. Yes.
Q. All right. It
says that the fees will be payable. Did you receive any
shares?
A. Yes, I received
some shares, Madam Justice, I received some shares. I'm just the
name on the shares though; I'm not the real owner of them.
Q. OK.
A. And I gave all
that, everything, over to my friends. His name is Tri Min,
and his name is Hui. Yes, I gave them everything. I went to look
for . . . I had come (inaudible) completed that; I had to give it
over to those people. And I always gave it.
Q. Finally, at the
end of the process, did you receive money?
A. No.
Q. No money.
A. No.
[6] The Appellant said he had
completed his fourth year of high school. He was three credits
away from completing his fifth year of high school. He was
currently employed in garment pressing.
[7] Exhibit A-3 is a
statement of information from the Registraire des entreprises
regarding a sole proprietorship. It shows that, on February 14,
2000, there was a registration in the Appellant's name, and at
his request, a deregistration took place on March 29, 2000.
The economic activity concerned a restaurant located in
Rouyn-Noranda.
[8] The Appellant explained that a
friend had allegedly asked him to take over a restaurant he had
in Rouyn-Noranda. He had tried things out for two or three
months, but when he realized it was not for him, he had requested
the removal of his business registration.
[9] The Revenu Québec auditor
had met with the Appellant on September 16, 2002. His report
was filed as Exhibit A-9. The auditor says that the
Appellant did not deny the fact that he had worked on the subject
of the business shares and had been paid in shares. However, he
had told her that he did not remember issuing the invoices that
had been submitted, and he had suggested to her that the
signatures may have been copied. During that meeting, the
Appellant's signatures on the two invoices had been analyzed in
comparison with the signatures appearing on his driver's licences
and other pieces of identification. The auditor found them to be
identical.
[10] The registration numbers already
granted to the Appellant had been reactivated. He was not a small
supplier, since the supplies that had been made far exceeded the
threshold of $30,000. The Appellant had been assessed for
unreported tax in connection with the two invoices for
consultation services.
[11] The Appellant's invoices had been
invoiced by 2866-0272 Québec Inc. to Exploration
Loubel Inc. and Exploration Tom Inc. Those invoices from
2866-0272 Québec Inc. added taxes to the total
amount. Exploration Tom Inc. and Exploration Loubel Inc. had
claimed input tax credits.
Arguments
[12] Counsel for the Appellant argued that
the Appellant had not made a taxable supply because a taxable
supply is a supply made in connection with a commercial activity.
He maintains that the Appellant did not provide the services set
out in the invoices without acknowledging that he participated in
a scheme. He also claims that the Appellant is not carrying on
any commercial activities.
[13] Counsel for the Respondent argued that
there is no proof that the invoices are fictitious. Therefore,
the Minister of National Revenue was entitled to take them at
their face value. It was the Appellant's responsibility to show
that the services had not been provided to 2866-0272
Québec Inc. and there had been no commercial activity.
Analysis and conclusion
[14] The Appellant's versions of the facts
have changed a number of times. During his meeting with the
auditor, the Appellant said that his initials had been imitated,
and he did not remember issuing the invoices, even though he
remembered working on some investment projects. The notice of
objection states that the invoices in question had been prepared
without the taxpayer's knowledge. Then, at the hearing, the
Appellant acknowledged that they were his initials on one of the
invoices, but not on the other, whereas the initials appear to be
similar in every aspect on both invoices.
[15] I must conclude that the Appellant
wrote his initials on the invoice himself and he wrote them of
his own will, and not under threat.
[16] Article 2863 of the Civil Code of
Québec reads as follows:
The parties to a juridical act set forth in a writing may not
contradict or vary the terms of the writing by testimony unless
there is a commencement of proof. - CCLC 1234
[17] This provision has been interpreted a
number of times by this court in income tax cases. I am referring
in particular to Garon J.'s decision in Transport Touchette
Inc. v. Canada, [1999]
T.C.J., No. 550 (Q.L.), Dussault J.'s decision in
Tanguay v. Canada, [1997] T.C.J., No. 16 (Q.L.), and
Lamarre J.'s decision in Dubois v. Canada, [2003] T.C.J.,
No. 80 (Q.L.).
[18] From this last decision, I cite
paragraph 33:
[TRANSLATION]
Thus, if as a general rule, the parties to a juridical act in
Quebec may not have recourse to testimonial evidence to
contradict or vary the terms of the writingthat witnesses it, it
seems that they could have recourse to third parties, at least in
tax matters, or in any case, when there is a commencement of
proof. This commencement of proof may arise where an admission of
the party adverse to the written contract or its agent, or the
production of a material thing gives an indication that the
content of the writing may be inaccurate. (See Ducharme,
Léo, summary of evidence, supra, page 270,
paragraph 915, and page 331, paragraph 1109.) Thus, if the
admission of the adverse party or the production of a material
thing gives an indication that the content of the writing may be
inaccurate, that is a commencement of proof giving rise to
testimonial evidence to endeavour to show it.
[19] These decisions concerned the Income
Tax Act. Would the same interpretation be given in the
context of this act? I do not need to decide on this aspect
because, given the circumstances of this case, there were no
admissions from the co-contracting party, and no material thing
has been produced. There is nothing more than the Appellant's
testimony. That is not sufficient. In fact, that cannot even be
taken into consideration, especially when we consider the nature
of the reasons cited to contradict the writing, a nature that is
related to the Appellant's turpitude.
[20] The principle whereby no one should be
heard by pleading his own turpitude is one of the legal
foundations of estoppel.
[21] In National Bank of Canada v.
Soucisse, [1981] 2 S.C.R. 339 (Q.L.), at page 362, Beetz
J. clearly states that, when an individual pleads his own
turpitude against some legal consequences, he may not derive any
profit from it.
70 One possible
legal basis for a fin de no-recevoir is the wrongful conduct of
the party against whom the fin de no-recevoir is pleaded.
Mignault J. refers to this in the above-cited passage from Grace
and Company v. Perras (supra) when he refers to arts. 1053
et seq. of the Civil Code. This is noted by Lemerle at
p. 144 of his treatise, where he writes:
[TRANSLATION]
No complaint can be based on, nor advantage derived from,
one's own action, negligence, imprudence, or incapacity, much
less fault, to the detriment of another. This proposition
is based on the fact that no one should derive a benefit from a
fault committed by him: on the contrary, he should repair the
damage he has caused.
[22] By the same token, Louise Mailhot J.,
of the Court of Appeal of Québec, applied the maxim
nemo auditur turpitudinem suam allegans to her decision in
Fecteau c. Gareau, [2003] J.Q. no 39 (Q.L.),
paragraph 49:
[TRANSLATION]
49 In my opinion,
the maxim nemo auditur turpitudinem suam allegans is a
general prohibition for any persons who base their arguments on
their own turpitude and a basis for a fin de non-recevoir.
Thus the fin de non-recevoir may, in a suitable case, be pleaded
to prevent a party from putting forward an argument that would
otherwise be a justification for his enrichment.
[23] In conclusion, a person who represents
himself in writing as having made a supply that has impacts with
regard to the Act may not, when that person is taxed in respect
of that supply, plead his own turpitude to contradict that
writing and spare himself the consequences related to the act
that was apparently done.
[24] The appeal is dismissed.
Signed at Ottawa, Canada, this 8th day of December
2004.
Lamarre Proulx J.
Translation certified true
on this 31th day of March 2005.
Colette Dupuis-Beaulne, Translator
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