Date: 20110525
Dockets: A-188-10
A-187-10
Citation: 2011 FCA 180
CORAM: LÉTOURNEAU
J.A.
TRUDEL J.A.
MAINVILLE J.A.
A-188-10
BETWEEN:
BASSAM CHALATI
Appellant
and
HER MAJESTY THE QUEEN
Respondent
-----------------------------------------------------------
A-187-10
MAHER
MAHROUSE
Appellant
and
HER MAJESTY
THE QUEEN
Respondent
Heard at Montréal, Quebec, on May 25, 2011.
Judgment delivered from the
Bench at Montréal, Quebec, on May 25, 2011.
REASONS FOR JUDGMENT OF THE COURT BY: TRUDEL
J.A.
Date:
20110525
Dockets: A-188-10
A-187-10
Citations: 2011 FCA
180
CORAM: LÉTOURNEAU J.A.
TRUDEL J.A.
MAINVILLE J.A.
A-188-10
BETWEEN:
BASSAM
CHALATI
Appellant
and
HER MAJESTY
THE QUEEN
Respondent
-----------------------------------------------------------
A-187-10
BETWEEN:
MAHER
MAHROUSE
Appellant
and
HER MAJESTY
THE QUEEN
Respondent
REASONS FOR
JUDGMENT OF THE COURT
(Delivered from the Bench at Montréal, Quebec, on May 25, 2011)
TRUDEL J.A.
[1]
These are two appeals from a judgment by the Tax Court of Canada, dated
April 9, 2010 (2010 TCC 124, Boyle J. (the judge)), dismissing the
appeals of Messrs. Chalati and Mahrouse from reassessments made under the Income
Tax Act, R.S.C. 1985, c. 1 (5th supp.) with respect to the 1999, 2000,
2001, 2002 and 2003 taxation years.
[2]
On November 30, 2010, this Court ordered that the two appeals be
joined and heard together. Only the reassessments with respect to the 2001,
2002 and 2003 taxation years are at issue.
[3]
In short, the judge did not believe the version of the facts presented by
the appellants and their witnesses. This is essentially what is being
challenged by the appellants.
[4]
Both are pharmacists who jointly operated two Uniprix pharmacies. During
the years at issue and in the course of operating their pharmacies, the
appellants received kickbacks from manufacturers of generic pharmaceutical
products. Neither the receipt of such kickbacks nor the fact that such benefits
are taxable is being denied.
[5]
Before the Tax Court of Canada, the appellants unsuccessfully attempted to
convince the judge that it would be appropriate to reduce the amount of these
kickbacks to take into account certain deductions. For the 2001 and 2002
taxation years, the appellants submitted that they had paid annual management
fees of $47,000 for the services of Amin Hachem. For the 2003 taxation year,
they submitted that an unconnected deduction related to an adjustment of the
closing inventory for that calendar year should be taken into account.
[6]
With respect to the first argument, the judge was not satisfied with the
quality of the evidence: he noted inconsistencies in the documentary evidence
and the weakness of the appellants’ and Mr. Hachem’s testimony (Reasons of
the Judge at paragraphs 9 and following). With respect to the second argument,
again he noted that insufficient evidence existed in support of the appellants’
position (ibidem, at paragraphs 6 and 7).
[7]
In Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235, the
Supreme Court wrote the following at paragraph 18:
The trial judge
is better situated to make factual findings owing to his or her extensive
exposure to the evidence, the advantage of hearing testimony viva voce,
and the judge’s familiarity with the case as a whole. Because the primary role
of the trial judge is to weigh and assess voluminous quantities of evidence,
the expertise and insight of the trial judge in this area should be respected.
[8]
The standard of review for findings of fact is such that they cannot be
reversed unless the trial judge has made a “palpable and overriding error”. The
appellants have not persuaded us that this was the case here. To the contrary,
we are of the view that the judge’s finding was correct.
[9]
Accordingly, the appeals will be dismissed with costs limited to one set
for the hearing. A copy of these reasons will be placed in docket A-187-10 in
support of the judgment to be rendered therein.
“Johanne Trudel”
Certified true translation
Francie Gow, BCL, LLB
FEDERAL
COUR OF APPEAL
NAMES OF
COUNSEL AND SOLICITORS OF RECORD
DOCKET: A-188-10
STYLE OF
CAUSE: BASSAM
CHALATI v.
HER MAJESTY
THE QUEEN
PLACE OF
HEARING: Montréal, Quebec
DATE OF
HEARING: May 25, 2011
REASONS FOR
JUDGMENT OF THE COURT BY: LÉTOURNEAU J.A.
TRUDEL J.A.
MAINVILLE
J.A.
DELIVERED
FROM THE BENCH BY: TRUDEL
J.A.
APPEARANCES:
|
Dominic Desjarlais
|
FOR THE APPELLANT
|
|
Annick Provencher
|
FOR THE RESPONDENT
|
SOLICITORS OF RECORD:
|
Lamarre Linteau & Montcalm
Montréal, Quebec
|
FOR THE APPELLANT
|
|
Myles J. Kirvan
Deputy Attorney General of Canada
|
FOR THE RESPONDENT
|
FEDERAL
COURT OF APPEAL
NAMES OF
COUNSEL AND SOLICOTORS OF RECORD
DOCKET: A-187-10
STYLE OF
CAUSE: MAHER
MAHROUSE v.
HER MAJESTY
THE QUEEN
PLACE OF
HEARING: Montréal, Quebec
DATE OF
HEARING: May 25, 2011
REASONS FOR
JUDGMENT OF THE COURT BY: LÉTOURNEAU J.A.
TRUDEL J.A.
MAINVILLE
J.A.
DELIVERED
FROM THE BENCH BY: TRUDEL J.A.
APPEARANCES:
|
Dominic Desjarlais
|
FOR THE APPELLANT
|
|
Annick Provencher
|
FOR THE RESPONDENT
|
SOLICITORS OF RECORD:
|
Lamarre Linteau & Montcalm
Montréal, Quebec
|
FOR THE APPELLANT
|
|
Myles J. Kirvan
Deputy Attorney General of Canada
|
FOR THE RESPONDENT
|
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