Citation: 2013 TCC 255
Date: 20130815
Docket: 2011-4074(IT)G
BETWEEN:
RENÉ KÉROUAC,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent,
and
MUNICIPALITY OF LAROUCHE,
Applicant.
[OFFICIAL ENGLISH
TRANSLATION]
ORDER AND REASONS FOR ORDER
(disposed of upon consideration of written
representations)
[1]
The applicant, the Municipality of Larouche, submitted a motion seeking leave to intervene and make
representations at the hearing of the appeal under section 28 of the
Tax Court of Canada Rules (General Procedure) (Rules).
[2]
The dispute between the
appellant and the respondent relates to a donation claimed by the appellant, or
transferred to his spouse, for the purpose of calculating the charitable tax
credit. According to the notice of appeal, the appellant allegedly made a donation
of $2 million to the Municipality of Larouche and this donation is
apparently eligible for the purpose of calculating the charitable tax credit.
[3]
The Minister of
National Revenue assessed the appellant on the basis that the appellant’s
charitable donation for the purpose of calculating the charitable tax credit was
only $1 million. The Minister raised various arguments including the
absence of donative intent (animus donandi) required and the doctrine of
sham.
[4]
Penalties were imposed
under subsection 163(2) of the Income Tax Act and the assessments
in question are outside the normal period for new assessments.
[5]
The appellant sued the Municipality
in the Superior Court and requested, among other things, the revocation or
cancellation of the donation, the reimbursement of $2 million by the Municipality
and damages. Among the appellant’s claims, he alleged that the Municipality intentionally
took part in the implementation of a tax plan that proved to be highly prejudicial
to the donor or that, at least, the Municipality had shown gross negligence amounting
to wilful blindness.
[6]
Section 28 provides
as follows:
LEAVE TO INTERVENE
28(1)
Where it is claimed by a person who is not a party to a proceeding
(a)
that such person has an interest in the subject matter of the proceeding,
(b)
that such person may be adversely affected by a judgment in the proceeding, or
(c)
that there exists between such person and any one or more parties to the
proceeding a question of law or fact or mixed law and fact in common with one
or more of the questions in issue in the proceeding,
such
person may move for leave to intervene.
(2)
On the motion, the Court shall consider whether the intervention will unduly
delay or prejudice the determination of the rights of the parties to the
proceeding, and the Court may,
(a)
allow the person to intervene as a friend of the Court and without being a
party to the proceeding, for the purpose of rendering assistance to the Court
by way of evidence or argument, and
(b)
give such direction for pleadings, discovery or costs as is just.
[7]
The Municipality is in
no way subject to a tax assessment related to the one at issue in this appeal
and the judgment in this appeal cannot have a financial impact on the Municipality.
[8]
The Municipality argued
that it has an interest under paragraph 28(1)(a) of the Rules. This
interest allegedly comes from the fact that the Municipality is a legal person
with a juridical personality and that it has the right to the safeguard of its
dignity, honour and reputation under sections 3, 4, 35, 298 and 303 of the Civil
Code of Quebec.
[9]
According to the Municipality,
several allegations in this appeal make reference to his participation in a “fraudulent
scheme”.
[10]
The Municipality
submits that there is a risk of potential evidence in this appeal that
jeopardizes the safeguard of its dignity, honour and reputation and, consequently,
it claims to have an interest within the meaning of section 28 in this case.
[11]
In support, the Municipality
cites Droit de la famille-1549
in which the Quebec Court of Appeal stated:
[translation]
Indeed,
the impleaded party, who is not a party to the litigation but whose rights may
be affected by the judicial decision, has the absolute right to intervene and
be heard. This is a fundamental rule of natural justice.
[12]
The Municipality also
cites Gauvin c. Belhumeur,
a decision of the Superior Court of Quebec that allowed a doctor to intervene
in defence of his professional integrity.
[13]
Droit de la
famille-1549 concerned a dispute
relating to child care and the “impleaded party” was the children.
[14]
In Gauvin, the applicants
sued several doctors, a hospital centre and an insurer for professional
liability. The applicants alleged that the respondent, a doctor, committed a
fault that contributed to the damages, but they had merely sued the
respondent’s insurer as permitted by the Civil Code of Quebec without
suing the respondent.
[15]
The interest of the “impleaded
parties” in both decisions is direct and immediate; furthermore, these are situations
where the respondents are not really impleaded parties. The children in Droit
de la famille-1549 had to live with the consequences of the custody order. In
Gauvin, to determine the liability of the insurer, the panel necessarily
had to establish whether the respondent doctor was liable in tort.
[16]
The circumstances here cannot
be compared.
[17]
While the Municipality’s
role will probably be referred to in evidence and, in establishing the facts,
the Court may incidentally make a determination on certain aspects of this role,
the Municipality’s role is not at the heart of this dispute.
[18]
A court may be required
to review facts related to what impleaded parties have done and draw findings
of fact relating to these impleaded parties. The possibility that there would
incidentally be such findings and that these findings may be negative for these
impleaded parties is not an interest that would constitute a basis of intervention
under paragraph 28(1)(a) of the Rules.
[19]
I note in passing that,
in the proceedings between the Municipality and the appellant in the Superior
Court, the Municipality will have the opportunity to fully defend his reputation,
honour and dignity.
[20]
The Municipality also cites
paragraph 28(1)(b) of the Rules and submits that it could be
subject to prejudice within the meaning of this paragraph because the
conclusions of this Court may have the authority of res judicata in
relation to the Municipality.
[21]
In support of this, the
Municipality referred to Deschênes c. Gagné, where the
Quebec Court of Appeal stated that res judicata applies not only to the judgment,
but also to its fundamental reasons, which are closely linked to the implicit res
judicata.
[22]
This submission is
without basis. One of the essential elements of res judicata is mutuality
of the parties. Moreover, the Municipality is not a party to this appeal; in Deschênes,
the inclusion of mutuality of the parties was not in dispute.
[23]
I note that a
respondent under paragraph 28(2)(b) of the Rules does not become a
party to the appeal.
[24]
In sum, the Municipality
is not exposed to a prejudice within the meanings of paragraph 28(1)(b)
of the Rules.
[25]
The Municipality also cited
paragraph 28(1)(c) and claimed that this condition had been met
because, factually, it is a matter of its involvement in the scheme of the appeal
before this Court and the Superior Court.
[26]
Paragraph 28(1)(c)
requires that a question of law or fact or mixed law and fact be one of the
issues in the dispute before this Court and also an issue disputed between the
applicant and one of the parties in this appeal.
[27]
I do not see a question
of law or fact or mixed law and fact in common.
[28]
As regards the facts,
it is not sufficient that there is one or certain common facts in the appeal
before this Court and in the litigation between the applicant and one of the
parties. They must be facts that the Court must determine for the purposes of
the dispute.
[29]
For example, according
to the submission herein, a question of quantum arises: is the amount that the
appellant paid to the Municipality of $1 million or $2 million? In
making a finding on this issue, it will likely be necessary to consider a
number of facts, some of which will also have to be considered in the
litigation between the Municipality and the appellant, but this is not
sufficient to invoke paragraph 28(1)(c). The same question of fact must
be an issue before our Court.
[30]
I am not persuaded that
there is such a common question of fact that that the Court must determine. Therefore,
the conditions of paragraph 28(1)(c) are not met.
[31]
In view of my finding
on subsection 28(1) of the Rules, it is not strictly necessary that I
examine the impact of the intervention on the conduct of the appeal, as
provided at the start of subsection 28(2). However, I will make the
following comments.
[32]
First, with respect to
the relevant issues in this appeal, I am not persuaded that the Municipality
can provide relevant factual evidence that the parties are not able to provide,
if required, by having representatives of the Municipality testify.
[33]
Second, the Municipality
requests an order authorizing it to (i) be present at any examination for
discovery, (ii) examine the witnesses at the appeal hearing and (iii) make representations
at the hearing. In its representations, the Municipality agreed to act
expeditiously in respecting the rights of the parties.
[34]
However, given the
action before the Superior Court by the appellant against the Municipality,
there is too high a risk that the Municipality would unduly prolong and
complicate the hearing of the appeal.
[35]
For these reasons, the
motion is dismissed without costs.
Signed at Ottawa, Ontario, this 15th day of August,
2013.
"Gaston Jorré"
Translation
certified true
on this 11th day
of February 2014.
François Brunet, Revisor
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