Date: 200001123

Docket: 97-3485-IT-G

BETWEEN:

ALAIN BRAULT,

Appellant,

and

HER MAJESTY THE QUEEN,

Respondent.

Reasons for Judgment

(Delivered orally from the bench at Québec, Quebec, on October 20, 1999 and revised on January 13, 2000)

P.R. Dussault, J.T.C.C.

[1] Mr. Bouchard, I am going to render my decision immediately because you have not convinced me of the merit of your position at all. I adopt Ms. Payette's remarks. I believe that the Civil Code provision to which we are referring, namely article 1953 of the Civil Code of Lower Canada or rather article 2359 of the Civil Code of Québec, does not create a claim in the appellant's favour such that he can claim a loss by relying on paragraphs 50(1)(a) and 39(1)(c) of the Income Tax Act. You have absolutely not convinced me that such a claim is created. I think that the case law cited by Ms. Payette and the academic commentary indicate exactly the opposite. You have given me absolutely no authority on which I could rely to find in your favour.

[2] In revising these brief oral reasons for judgment I would add that, even if I had accepted the appellant's counsel's position, the new claim created in the appellant's favour would in any event have had an adjusted cost base of zero, since he paid nothing. The application of paragraphs 50(1)(a) and 39(1)(c) of the Income Tax Act would thus have had no consequences.

[3] The appeal for 1994 is therefore dismissed.

[4] The appeal for 1995 is allowed only to the extent of removing the late filing penalty. The whole with costs to the respondent.

Signed at Ottawa, Canada, this 13th day of January 2000.

"P.R. Dussault"

J T.C.C.

[OFFICIAL ENGLISH TRANSLATION]

Translation certified true on this 13th day of December 2000.

Erich Klein, Revisor