Date: 20100910
Dockets:
A-407-09
A-406-09
Citation:
2010 FCA 228
CORAM: NOËL J.A.
NADON J.A.
TRUDEL J.A.
A-407-09
BETWEEN:
MAURICE
BOIVIN, IN HIS CAPACITY AS LIQUIDATOR
OF THE SUCCESSION OF THE LATE GABRIELLE
GAUTHIER
Appellant
and
HER MAJESTY IN RIGHT OF CANADA
Respondent
A-406-09
BETWEEN:
VINCENT BOIVIN
Appellant
and
HER MAJESTY IN RIGHT OF CANADA
Respondent
REASONS FOR JUDGMENT
NOËL J.A.
[1]
These are appeals from
two judgments rendered by Justice Paris of the Tax Court of Canada (the
TCC judge) confirming, in a single set of reasons, the validity of the
assessments made by the Minister of National Revenue (the Minister) under
section 160 of the Income Tax Act, R.S.C. 1985, c. 1, (5th Supp.)
(the Act).
[2]
The two appeals have
been consolidated, following an order by Justice Nadon dated
November 24, 2009. Pursuant to that order, these reasons will be filed in
the lead file (A‑407-09), and a copy thereof will be filed as Reasons for
Judgment in file A-406-09.
[3]
The assessments in this
appeal were made following the transfer of $203,075.54 from Maurice Boivin to
the succession of his late spouse Gabrielle Gauthier (the Succession), and also
following the subsequent transfer of the amount of $40,000 from the Succession
to Vincent Boivin, son of Maurice Boivin. The Minister assessed the Succession
on the basis of the transfer from Maurice Boivin to the Succession, without
consideration, at a time when Mr. Boivin’s tax debt had amounted to
$160,257.91. The assessment of Vincent Boivin was established on the grounds
that the transfer was made without consideration at a time when the Estate had,
pursuant to section 160 of the Act, a tax debt from the transfer made by
Maurice Boivin to the Succession.
[4]
The only point at
issue, according to the Memorandum of Fact and Law filed by the appellants, is
the unseizability of the funds transferred by Maurice Boivin to the Succession,
and by the Succession to Vincent Boivin. At the hearing, counsel for the
appellants attempted to raise several additional issues of a totally different
nature. Counsel for the respondent objected to the late and unannounced
submissions, thus there is no need to address those issues.
[5]
The appellants contend
that the funds transferred to them were unseizable under Quebec law, because
they derived from the sale of property bequeathed to Maurice Boivin under a
stipulation of unseizability, which extended under the terms of the will to
property [translation] “acquired by reinvestment” of the bequeathed
immovable. (Appeal Book, page 220).
[6]
The provisions of the Civil
Code of Québec, R.S.Q., c.
C-1991 (C.C.Q.) and of the Québec Code of Civil Procedure,
R.S.Q,. c. C-25 (C.C.P.) on which the appellants base their argument are as
follows:
|
2649. A stipulation of
unseizability is without effect, unless it is made in an act by gratuitous
title and is temporary and justified
by a serious and legitimate interest. Nevertheless, the property remains
liable to seizure to the extent provided in the Code of Civil Procedure
(chapter C-25).
It may be set up against
third persons only if it is published in the appropriate register.
|
2649. La stipulation d'insaisissabilité est sans
effet, à moins qu'elle ne soit faite dans un acte à titre gratuit et qu'elle
ne soit temporaire et justifiée par un intérêt sérieux et légitime;
néanmoins, le bien demeure saisissable dans la mesure prévue au Code de
procédure civile (chapitre C-25).
Elle n'est opposable aux
tiers que si elle est publiée au registre approprié.
|
|
553. The following are exempt from seizure:
…
(3) Property
declared by a donor or testator to be exempt from seizure, which may however
be seized by creditors posterior to the gift or to the opening of the legacy,
with the permission of the judge and to the extent that he determines;
(4) Judicially
awarded support and sums given or bequeathed as support, even if not declared
to be exempt from seizure by the instrument evidencing the gift or bequest;
…
|
553. Sont insaisissables:
[…]
3. Les biens donnés
ou légués sous condition d'insaisissabilité; néanmoins, ces biens peuvent
être saisis à la poursuite des créanciers postérieurs à la donation ou à
l'ouverture du legs, avec la permission du juge et pour la portion qu'il
détermine;
4. Les aliments
accordés en justice, de même que les sommes données ou léguées à titre
d'aliments, encore que le titre qui les a constituées ne les ait pas
déclarées insaisissables;
[…]
|
[7]
The TCC judge dismissed
the appeals principally on the basis of the Supreme Court’s decision in Poulin v. Serge Morency et Associés Inc.,
[1999] 3 S.C.R. 351 (Poulin). In that case, the Supreme Court held that
seizability was the rule and unseizability the exception, so that the statutory
provisions ordering unseizability were to be narrowly construed. In this case,
the TCC judge concluded that
the power to stipulate the unseizability of property under article 2649 of
the C.C.Q. does not extend to property acquired by reinvestment of bequeathed
property.
[8]
In support of their appeals, the appellants
point out that the Poulin decision relates to an interpretation of
section 222 of the Act respecting the Government and Public Employees
Retirement Plan, R.S.Q., c. R-10 (Retirement Plan Act) and not to
article 2649 of the C.C.Q. According to them, the principle established by
the Supreme Court in Poulin only applies in the specific context of that
case. They argue that the TCC judge failed to make the distinction between
legal unseizability and conventional unseizability under article 2649 of
the C.C.Q.
[9]
It is true that the Poulin case is related to
unseizability under the Retirement Plan Act. However, it seems clear that the
underlying principle may have a broader application.
[10]
In Poulin, the Supreme Court refers to
articles 2644 and 2645 of the C.C.Q. to state the principle by which
seizability is the rule and unseizability the exception (Poulin,
paragraph 18). Specifically, the Court indicates that (idem):
Provisions that depart from the
principle must be narrowly construed: . . . . In addition, given that [they]
affect the rights of the creditors, they may be expected to be worded clearly
and precisely.
[11]
Like section 222 of the Retirement Plan Act, article 2649
of the C.C.Q. overrides the principle of seizability of property, but only to
the extent provided. On its face, this exception thus created extends only to
property transferred by the legatee (or the donee) because no mention is made
of its reinvestment.
[12]
In order for the stipulation of unseizability
under article 2649 of the C.C.Q. to extend to reinvestment, it would have
had to be provided in clear and precise terms, which is not the case.
[13]
In my opinion, the TCC judge correctly concluded
that the stipulation of unseizability outlined in the will of the late
Gabrielle Gauthier can not extend to property acquired by reinvestment.
[14]
Counsel for the respondent asserted that, in any
event, Parliament is not bound by the unseizability enacted by the laws of the
provinces (Marcoux v. Canada (Attorney General), 2001 FCA 92, 2001
CarswellNat 568 (FCA), paragraph 10; Bouchard v. Canada (Attorney General),
2009 FCA 321, 2009 CarswellNat 3505 (FCA), paragraph 20; see also Canada v.
Rose., 2009 FCA 93, 2009 CarswellNat 5699 (FCA), paragraphs 29 and 30).
Because the amounts assessed are not protected from seizure according to Quebec
law, there is no need to address this question.
[15]
I would dismiss the appeal with costs in the lead
file only.
“Marc Noël”
“I agree.
M. Nadon J.A.”
“I agree.
Johanne Trudel J.A.”
Certified true
translation
Michael Palles
FEDERAL COURT OF APPEAL
SOLICITORS OF RECORD
DOCKETS: A-407-09
and A-406-09
(APPEAL FROM
JUDGEMENTS OF THE HONOURABLE MR. JUSTICE PARIS OF THE TAX COURT OF CANADA DATED
SEPTEMBER 3, 2009, DOCKETS NO. 2007-3503(IT)G
and 2007-3623(IT)G.)
STYLE OF
CAUSE: A-407-09
Maurice Boivin, in his capacity as liquidator of the succession of
the late Gabrielle Gauthier and Her Majesty in Right of Canada
A-406-09
Vincent
Boivin and Her Majesty in Right of Canada
PLACE OF HEARING: Ottawa, Ontario
DATE OF HEARING: September 8, 2010
REASONS FOR JUDGEMENT: NOËL J.A.
CONCURRED IN BY: NADON J.A.
TRUDEL J.A.
DATED: September 10, 2010
APPEARANCES:
|
Darquise Jolicoeur
|
FOR THE
APPELLANTS
|
|
Pascal
Tétrault
|
FOR THE
RESPONDENT
|
SOLLICITORS
OF RECORD:
|
Beaudry, Bertrand,
s.e.n.c.r.l.
Gatineau, Québec
|
FOR THE
APPELLANTS
|
|
Myles J.
Kirvan
Deputy Attorney General of Canada
|
FOR THE
RESPONDENT
|
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