Date: 20031028
Docket: T-1606-03
Citation: 2003 FC 1260
Montreal, Quebec, October 28, 2003
Present: The Honourable Mr. Justice Beaudry
BETWEEN:
CARREFOUR LANGELIER INC.
Applicant
and
THE CANADA CUSTOMS AND REVENUE AGENCY
Respondent
REASONS FOR ORDER AND ORDER
[1] This is a motion on behalf of the applicant for an order requiring Mr. David Feher to re-attend cross-examination on his Affidavit of September 29, 2003, to answer questions and file a copy of the mandate received from the respondent.
[2] In the course of Mr. Feher's cross-examination held on September 29, 2003, counsel for the respondent made four objections and refused to provide a copy of the mandate given to Mr. Feher.
[3] In his Affidavit on which he was questioned, Mr. Feher states that he is an accountant at the Canada Customs and Revenue Agency. The collection department asked him to value Mr. Harry Glassman's shares in the holding company Grands Horizons de l'Île ("Grands Horizons"). Mr. Glassman filed for bankruptcy on August 9, 2002 and the collection department needed to value his shares for collection purposes. The value of Grands Horizons comes from its shareholding in Moncan Inc. Therefore, to establish the value of Mr. Glassman's shares in Grands Horizons, it is necessary to establish the value of Moncan Inc. To establish the value of Moncan Inc., it is necessary to value its investments in Carrefour Langelier Inc.
[4] On August 20, 2003, pursuant to paragraph 231.2 (1) of the Income Tax Act, R.S.C. 1985 (5th Supp.), c.1, the applicant was requested to provide information and documents on or before September 10, 2003. It is in that context that Mr. Feher was asked to be examined under oath on his Affidavit by Carrefour Langelier Inc.
[5] Form T-104 represents the written mandate from the collection department. The applicant's solicitors requested a copy of this document. The respondent's objection to the filing of this document is well-founded. It is clear from the affidavits filed by Mr. Feher and Mr. Danny Guay that the mandate is to value Mr. Glassman's shares for collection purposes.
[6] The applicant asserts that he needs this document to respond to the requirements notice. I do not agree. After an analysis of the documents filed, I am satisfied that this is not a fishing expedition from the collection department. In his statement in the matter of his bankruptcy, Mr. Glassman indicates that he owns one class G share in Moncan Inc. as well as one class B share and 166,250 class F shares in Grands Horizons. The respondent filed a document from "l'inspecteur général des institutions financières" dated September 12, 2003, which confirms that Moncan Inc. is a shareholder in Carrefour Langelier Inc. and that Mr. Glassman is the secretary and "principal dirigeant".
[7] I therefore see no reason to support the request and oblige the respondent to file the written mandate given to Mr. Feher. While it is true that the transcript reveals that this witness seems to be confused, it is evident that he has a clear mandate to find a fair market value of the shares held by Mr. Glassman in Grands Horizons (pp.12, 18, 19).
[8] Rothstein J.(as he then was) said in AGT Ltd. v. Canada (Attorney General of Canada), [1996] 3 F.C. 505 (T.D.):
4. It is not necessary that a requirements notice set out the grounds or particulars for which the documents sought are required.
5. As long as the documents pertain to a genuine inquiry into the tax liability of a person, they may be the subject of a requirements notice under subsection 231.2(1).
[9] I would add that it is not necessary that the mandate given to Mr. Feher in the case at bar be provided to the applicant. Therefore the objection is maintained.
[10] The following four objections were raised:
1. At page 33 of the transcript: counsel for the respondent objected to the relevancy of where the witness obtained the documents. The answers were given under reserve and since they have already been answered, the applicant now knows where the documents came from. The objection is therefore academic, but I would have allowed the question.
2. At page 48 of the transcript: the applicant's solicitors wanted to know from Mr. Feher if he had sent the same request about the company 2466. This company is a third party to the applicant. Therefore, the objection is sustained, because it is irrelevant. The numbered company, 2437-2666 Quebec Inc., is another entity and is completely separate from Carrefour Langelier Inc.
3. At page 56 of the transcript: the objection concerned questions posed to Mr. Feher on a document prepared by someone else. I agree with counsel for the respondent that the witness is not obliged to comment on a figure (as the one in the case at bar, $138,371) when he is not the person who wrote the document. The objection is maintained.
4. At page 62 of the transcript: the objection concerned the following question, "What other qualifications would you have to give if you couldn't get the information listed in your paragraph 9?". In his Affidavit, at page 9, Mr. Feher stated:
In order to value the said investment in Carrefour Langelier Inc., it is necessary to obtain the following information from or about Carrefour Langelier Inc.,:
a) The Minute Book of Carrefour Langelier Inc.;
b) A copy of the partnership agreement related to the "investment in partnership" mentioned in Carrefour Langelier Inc.'s Financial Statements of 2002;
c) The Financial Statements of that partnership, from 1997 to 2002;
d) Details (copy of the contract, name of the "individual", name of the "company" which is controlled by that "individual", description of securities involved) regarding the "balance of sale receivable" mentioned in the Financial Statements of 2002;
e) Details (name of those companies, shares of those companies, etc...) regarding the amount "due from related companies" and due from "parent company" totalling $6,736,176 mentioned in the Financial Statements of 2002 under "assets";
f) Details as to the loans payable of $7,540,876 mentioned in the Financial Statements of 2002;
I am of the opinion that this question is irrelevant, moreover speculative. At paragraph 11 of his Affidavit, Mr. Feher explains what the consequences would be if he cannot get the information:
If I do not get this information, I will not be able to give an unqualified opinion pertaining to the fair market value of the said shares held by the debtor, Harry Glassman.
At paragraph 12, he added:
I have made the assumption that facts obtained by Financial Statements in corporate income tax returns are true.
I cannot find any reason to allow such a question because it is up to Mr. Feher to make the evaluation and give an opinion on the value of the shares owned by Mr. Glassman in Grands Horizons. This has nothing to do with the applicant. Therefore, this objection is maintained.
ORDER
THE COURT ORDERS that the motion is dismissed with costs in the cause.
"Michel Beaudry"
Judge
FEDERAL COURT
NAMES OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: T-1606-03
STYLE OF CAUSE: CARREFOUR LANGELIER INC.
and
THE CANADA CUSTOMS AND REVENUE AGENCY
PLACE OF HEARING: Montreal, Quebec
DATE OF HEARING: October 27, 2003
REASONS FOR ORDER AND ORDER : The Honourable Mr. Justice Beaudry
DATED: October 28, 2003
APPEARANCES:
Me Aaron Rodgers FOR APPLICANT
Me Chantal Comtois FOR RESPONDENT
SOLICITORS OF RECORD:
SPIEGEL SOHMER FOR APPLICANT
Montreal, Quebec
MORRIS ROSENBERG FOR RESPONDENT
Deputy Attorney General of Canada
Montreal, Quebec
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