Federal Court of Appeal - Riverin v. Canada

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Date: 19990528

CORAM: MARCEAU

DESJARDINS

NOËL, JJ.A.

Docket: A-48-96

BETWEEN:

ROGER RIVERIN

Appellant

- and -

HER MAJESTY THE QUEEN

Respondent

______________________________________________

Docket: A-582-96

BETWEEN:

LES PLACEMENTS R.I.O. INC.

Appellant

- and -

HER MAJESTY THE QUEEN

Respondent

Hearing held in Québec, Quebec, Friday, May 28, 1999.

Judgment rendered at the hearing, Friday, May 28, 1999.

REASONS FOR JUDGMENT OF THE COURT BY: MARCEAU J.A.

Date: 19990528

CORAM: MARCEAU

DESJARDINS

NOËL, JJ.A.

Docket: A-48-96

BETWEEN:

ROGER RIVERIN

Appellant

- and -

HER MAJESTY THE QUEEN

Respondent

______________________________________________

Docket: A-582-96

BETWEEN:

LES PLACEMENTS R.I.O. INC.

Appellant

- and -

HER MAJESTY THE QUEEN

Respondent

REASONS FOR JUDGMENT OF THE COURT

(Pronounced at the hearing in Québec, Quebec,

Friday, May 28, 1999)

MARCEAU J.A.

[1] We are all of the opinion that these appeals from two decisions of the Tax Court of Canada, appeals that were joined at the parties" request owing to the identity of the problem they raise, cannot succeed.

[2] It is simply not apparent to us that, on the central point they had to consider, and the only one on which we need rule, namely, the application in this case of the provisions of subsection 160(1) of the Income Tax Act, either of the two judges erred. Subsection 160(1) reads as follows:

160. (1) Lorsqu"une personne a, depuis le 1^er mai 1951, transféré des biens, directement ou indirectement, au moyen d"une fiducie ou de toute autre façon,

a) à son conjoint ou à une personne devenue depuis son conjoint,

b) à une personne qui était âgée de moins de 18 ans, ou

c) à une personne avec laquelle elle avait un lien de dépendance,

les règles suivantes s"appliquent:

d) le bénéficiaire et l"auteur du transfert sont conjointement et solidairement responsables du paiement d"une partie de l"impôt de l"auteur du transfert en vertu de la présente Partie pour chaque année d"imposition, égale à l"excédent de l"impôt pour l"année sur ce que cet impôt aurait été sans l"application des articles 74 à 75.1 à l"égard de tout revenu tiré des biens ainsi transférés ou des biens y substitués ou à l"égard de tout gain tiré de la disposition de tels biens, et

e) le bénéficiaire et l"auteur du transfert sont conjointement et solidairement responsables du paiement en vertu de la présente loi d"un montant égal au moins élevé des deux montants suivants:

(i) la fraction, si fraction il y a, de la juste valeur marchande des biens à la date du transfert qui est en sus de la juste valeur marchande à cette date de la contrepartie donnée pour le bien, et

(ii) le total des montants donc chacun représente un montant que l"auteur du transfert doit payer en vertu de la présente loi au cours de l"année d"imposition dans laquelle les biens ont été transférés ou d"une année d"imposition antérieure ou pour une de ces parties,

mais aucune disposition du présent paragraphe n"est réputée limiter la responsabilité de l"auteur du transfert en vertu de toute autre disposition de la présente loi.

160. (1) Where a person has, on or after the l^st day of May, 1951, transferred property, either directly or indirectly, by means of a trust or by any other means whatever, to

(a) his spouse or a person who has since become his spouse,

(b) a person who was under 18 years of age, or

the following rules apply:

(d) the transferee and transferor are jointly and severally liable to pay a part of the transferor"s tax under this Part for each taxation year equal to the amount by which the tax for the year is greater than it would have been if it were not for the operation of sections 74 to 75.1, in respect of any income from, or gain from the disposition of, the property so transferred or property substituted therefor, and

(e) the transferee and transferor are jointly and severally liable to pay under this Act an amount equal to the lesser of

(i) the amount, if any, by which the fair market value of the property at the time it was transferred exceeds the fair market value at that time of the consideration given for the property, and

(ii) the aggregate of all amounts each of which is an amount that the transferor is liable to pay under this Act in or in respect of the taxation year in which the property was transferred or any preceding taxation year,

but nothing in this subsection shall be deemed to limit the liability of the transferor under any other provision of this Act.

[3] Noting the care taken by Parliament to employ more than once the broadest possible terms in its introductory words, no doubt for the purpose of giving its rule a full extension " "either directly or indirectly, by means of a trust or by any other means whatever" " we have no difficulty in concluding that the provision applies once the tax debtor does the act that gives rise to the process by which his property will ultimately end up in the patrimony of any of these persons with whom he has a non-arm"s length relationship. In the particular case of a payment in kind or a payment given as security for the repayment of a loan, it makes no difference whether the payment takes full effect and becomes definitive as a result of some additional intervention of the debtor, a court decision or the mere operation of the Act.

[4] The appeal will therefore be dismissed, with costs.

"Louis Marceau"

J.A.

Certified true translation

Bernard Olivier

IN THE FEDERAL COURT OF APPEAL

Date: 19990528

Docket: A-48-96

BETWEEN:

ROGER RIVERIN

Appellant

- and -

HER MAJESTY THE QUEEN

Respondent

____________________________________

Docket: A-582-96

BETWEEN:

LES PLACEMENTS R.I.O. INC.

Appellant

- and -

HER MAJESTY THE QUEEN

Respondent

REASONS FOR JUDGMENT

OF THE COURT

FEDERAL COURT OF CANADA

APPEAL DIVISION

NAMES OF COUNSEL AND SOLICITORS OF RECORD

FILE NO: A-48-96

STYLE:ROGER RIVERIN v. HER MAJESTY THE QUEEN

FILE NO: A-582-96

STYLE:LES PLACEMENTS R.I.O. INC.

v. HER MAJESTY THE QUEEN

PLACE OF HEARING: QUÉBEC, QUEBEC

DATE OF HEARING: MAY 28, 1999

REASONS FOR JUDGMENT OF THE COURT

(MARCEAU, DESJARDINS, NOËL, JJ.A.)

RENDERED AT THE HEARING ON MAY 28, 1999

APPEARANCES:

Claude Blanchard and Pierre Martin FOR THE APPELLANTS

Jane Meagher FOR THE RESPONDENT

SOLICITORS OF RECORD:

Hickson, Martin, Blanchard

1170, chemin Saint-Louis

Sillery, Quebec

G1S 1E5 FOR THE APPELLANTS

Morris Rosenberg

Deputy Attorney General of Canada FOR THE RESPONDENT