Case information
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30382
Deputy Minister of Revenue of Quebec v. Richard Moufarrège
(Quebec) (Civil) (By Leave)
Docket
Judgments on applications for leave to appeal are rendered by the Court, but are not necessarily unanimous.
| Date | Proceeding | Filed By (if applicable) |
|---|---|---|
| 2005-12-13 | Appeal closed | |
| 2005-12-13 | Certificate of taxation issued to, S. Roussel | |
| 2005-12-06 | Decision on the bill of costs, taxed at the amount of $6,501.62, Reg | |
| 2005-12-05 | Submission of the bill of costs, Reg | |
| 2005-11-18 | Bill of costs, Completed on: 2005-11-18 | Deputy Minister of Revenue of Quebec |
| 2005-11-14 | Record returned to the Registrar of the Court of Appeal | |
| 2005-10-24 | Transcript received, (42 pages) | |
| 2005-10-13 | Formal judgment sent to the registrar of the court of appeal and all parties | |
| 2005-10-13 | Judgment on appeal and notice of deposit of judgment sent to all parties | |
| 2005-10-12 |
Decision on miscellaneous motion, (Justice Fish not on the bench), CJ Ma Ba Bi LeB De F Cha, (See decision on motion of June 6/05) Dismissed |
|
| 2005-10-12 |
Judgment on the appeal rendered, CJ Ma Ba Bi LeB De Cha, The appeal from the judgment of the Court of Appeal of Quebec (Montreal), Number 500-09-012318-028, dated April 13, 2004, was heard on October 12, 2005 and the Court on that day delivered the following judgment orally: [translation] Deschamps J. — Section 128 of Quebec's Taxation Act, R.S.Q. c. I-3, authorizes the deduction of expenses relating to a business or property, provided that they were incurred to gain income. Section 160(a) adds that a taxpayer may deduct the interest paid on a loan used to earn income from a business or property. In the case at bar, the Deputy Minister disallowed two deductions claimed by the respondent. The first was for interest paid on a loan initially contracted to purchase real property. The property had been sold by the time the deduction was disallowed. The second disallowed deduction related to interest on a loan that had initially been contracted to purchase shares in a company that went bankrupt before the deduction was claimed. Bronfman Trust v. The Queen, [1987] 1 S.C.R. 32, established that it is the current rather than the original use that is relevant in assessing the deductibility of interest payments (see to the same effect Tennant v. M.N.R., [1996] 1 S.C.R. 305; Shell Canada Ltd. v. Canada, [1999] 3 S.C.R. 622; and Ludco Enterprises Ltd. v. Canada, [2001] 2 S.C.R. 1082, 2001 SCC 62). Stewart v. Canada, [2002] 2 S.C.R. 645, 2002 SCC 46, did not alter the principle that when a reasonable expectation of income disappears, so does the right to a deduction. In that decision, the Court stated that "the deductibility of expenses presupposes the existence of a source of income" (at para. 57). In the instant case, once the properties were sold, the source of income ceased to exist and the loan was no longer being used to earn income from property in accordance with ss. 128 and 160. With regard to the shares, the company in question is bankrupt, and nothing in the record indicates a possibility of a resumption of activities, so here too the source of income has disappeared even though the company has not been dissolved. For these reasons, the appeal is allowed, the judgment of the Court of Appeal is reversed, and the judgment of the Court of Québec is restored, with costs. The motion for costs is dismissed. Allowed, with costs |
|
| 2005-10-12 |
Hearing of the appeal, 2005-10-12, CJ Ma Ba Bi LeB De Cha Judgment rendered |
|
| 2005-10-12 | Acknowledgement and consent for video taping of proceedings, from all parties | |
| 2005-09-30 | Notice of appearance, Alain François Meunier and Jean Lepage will be present for the hearing. | Deputy Minister of Revenue of Quebec |
| 2005-09-14 | Notice of appearance, François A. Barette and Nicolas X. Cloutier will be present at the hearing. | Richard Moufarrège |
| 2005-08-15 | Notice of hearing sent to parties | |
| 2005-08-11 |
Appeal hearing scheduled, 2005-10-12, Previously Oct. 18 and Nov. 8/05 Judgment rendered |
|
| 2005-07-05 | Transcript received, on Motion hearing (18 pages) | |
| 2005-06-21 | Respondent's book of authorities, Completed on: 2005-06-21 | Richard Moufarrège |
| 2005-06-21 | Respondent's factum, CD rec'd Aug. 24/05, Completed on: 2005-06-21 | Richard Moufarrège |
| 2005-06-06 |
Decision on miscellaneous motion, (Original motion before - Binnie, Lebel, Deschamps, Fish, Charron), CJ Ma Ba Bi LeB De F Cha, BINNIE J. - The Court defers until the hearing of the appeal its decision on the motion for an order that the appellant pay the respondent his costs on the appeal on a solicitor and client basis regardless of the outcome of the appeal. The Court extends for a period of fifteen days from today the time for filing the respondent's factum, record and book of authorities. The Court authorizes the respondent to argue the appeal if he files his factum in accordance wih this decision. A decision regarding costs on the motion will follow. Referred |
|
| 2005-06-06 |
Hearing of miscellaneous motion, 2005-06-06, DEFERRED until the hearing of the appeal, CJ Ma Ba Bi LeB De F Cha Decision reserved |
|
| 2005-06-02 | Supplemental document, Act Respecting the Ministère du Revenu to be inserted at tab 1 of the authorities on motion | Deputy Minister of Revenue of Quebec |
| 2005-06-02 | Book of authorities, on the motion (sent to the judges June 2/05), Completed on: 2005-06-03 | Deputy Minister of Revenue of Quebec |
| 2005-05-30 | Book of authorities, Authorities on the Motion, Completed on: 2005-05-30 | Richard Moufarrège |
| 2005-05-30 | Notice of appearance, Stéphane Eljarrat will be present at hearing. | Richard Moufarrège |
| 2005-05-26 |
Submission of miscellaneous motion, 2005-06-06, (Original motion before Binnie, Lebel, Deschamps, Fish, Charron), CJ Ma Ba Bi LeB De F Cha Decision reserved |
|
| 2005-05-06 | Appeal perfected for hearing | |
| 2005-05-02 | Response to miscellaneous motion, that respondent's costs on appeal be paid by the appellant and to extend time (bookform) (sent to the judges May 26/05), Completed on: 2005-05-04 | Deputy Minister of Revenue of Quebec |
| 2005-04-22 | Notice of miscellaneous motion, that respondent's costs on appeal be paid by the appellant (joint with a motion to extend time to file the respondent's record, factum and authorities)(bookform) (sent to the judges May 26/05), Completed on: 2005-04-28 | Richard Moufarrège |
| 2005-03-10 | Appellant's record, (motifs signés reçus le 30 mars 2005 and inserted in original record), Completed on: 2005-03-31 | Deputy Minister of Revenue of Quebec |
| 2005-03-10 | Appellant's book of authorities, (Service rec'd Mar. 30/05), Completed on: 2005-03-31 | Deputy Minister of Revenue of Quebec |
| 2005-03-10 | Appellant's factum, (Service rec'd Mar. 30/05 / CD rec'd Aug. 24/05), Completed on: 2005-03-31 | Deputy Minister of Revenue of Quebec |
| 2004-12-17 | Notice of appeal, Completed on: 2004-12-17 | Deputy Minister of Revenue of Quebec |
| 2004-12-07 | Letter advising the parties of tentative hearing date and filing deadlines (Leave granted) | |
| 2004-12-03 | Appeal court record, (1 box - joint with Trial Court record) | |
| 2004-11-19 | Judgment on leave sent to the parties | |
| 2004-11-18 |
Judgment of the Court on the application for leave to appeal, The application for leave to appeal from the judgment of the Court of Appeal of Quebec (Montreal), Number 500-09-012318-028, dated April 13, 2004, is granted without costs. Granted, without costs |
|
| 2004-10-18 | All materials on application for leave submitted to the Judges, Ba LeB De | |
| 2004-08-09 | Respondent's response on the application for leave to appeal, Completed on: 2004-08-09 | Richard Moufarrège |
| 2004-07-08 | Letter acknowledging receipt of an incomplete application for leave to appeal | |
| 2004-06-10 | Application for leave to appeal, (reasons and order of C.A. not signed)(received on July 22, 2004 - add in leave book), Completed on: 2004-07-22 | Deputy Minister of Revenue of Quebec |
Parties
Please note that in the case of closed files, the “Status” column reflects the status of the parties at the time of the proceedings. For more information about the proceedings and about the dates when the file was open, please consult the docket of the case in question.
Main parties
| Name | Role | Status |
|---|---|---|
| Deputy Minister of Revenue of Quebec | Appellant | Active |
v.
| Name | Role | Status |
|---|---|---|
| Moufarrège, Richard | Respondent | Active |
Counsel
Party: Deputy Minister of Revenue of Quebec
Counsel
Alain-François Meunier
Secteur D186LC, 18e étage
3, Complexe Desjardins
Montréal, Quebec
H5B 1A7
Telephone: (514) 287-8260
FAX: (514) 873-8992
Email: jean.lepage@mrq.gouv.qc.ca
Agent
111, rue Champlain
Gatineau, Quebec
J8X 3R1
Telephone: (819) 771-7393
FAX: (819) 771-5397
Email: s.roussel@noelassocies.com
Party: Moufarrège, Richard
Counsel
François A. Barette
Stéphane Eljarrat
26e étage
1501, avenue McGill Collège
Montréal, Quebec
H3A 3N9
Telephone: (514) 841-6400
FAX: (514) 841-6499
Email: ncloutier@dwpv.com
Agent
2600 - 160 Elgin St
P.O. Box 466, Stn "D"
Ottawa, Ontario
K1P 1C3
Telephone: (613) 233-1781
FAX: (613) 788-3433
Email: henry.brown@gowlings.com
Summary
Keywords
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Summary
Case summaries are prepared by the Office of the Registrar of the Supreme Court of Canada (Law Branch). Please note that summaries are not provided to the Judges of the Court. They are placed on the Court file and website for information purposes only.
The Respondent took out two loans. An initial loan of $155,000 was used to purchase four condominium units in Vancouver, while the second loan, of $300,000, was used to acquire shares in 2628-8225 Québec inc. It is common ground that the money was borrowed to earn income and that there was no personal or hobby element to the investments.
In 1991, 2628-8225 Québec inc. went bankrupt. In 1992 and 1993, the Vancouver real estate market collapsed and the Respondent sold his four condominium units at a loss. The entire sale proceeds were used to repay the loan, which has not yet been fully repaid.
In respect of 1993, 1994, 1995 and 1996, the Respondent claimed tax deductions for the interest paid on the balance of the two loans. In 1997, the Appellant issued new notices of assessment to the Respondent and disallowed the deductions. On April 19, 2002, the Court of Québec dismissed the Respondent’s appeal. On April 13, 2004, the Court of Appeal reversed that judgment, set aside the notices of assessment and referred the matter back to the Appellant to issue notices of reassessment allowing the deductions claimed by the Respondent.
Lower court rulings
Court of Quebec
500-02-073392-990
Requête de l'intimé pour annuler des avis de cotisation à l'égard des années d'imposition 1993, 1994, 1995 et 1996, rejetée
Court of Appeal of Quebec (Montréal)
500-09-012318-028
Appel accueilli
Filed documents
The memorandums of argument on an application for leave to appeal will be posted here 30 days after leave to appeal has been granted unless they contain personal information, information that is subject to a publication ban, or any other information that is not part of the public record. You may also obtain copies of the memorandum by filling out the Request for Court records form or by contacting the Court’s Records Centre either by email at records-dossiers@scc-csc.ca or by telephone at 613‑996‑7933 or at 1‑888‑551‑1185.
If you have questions about a memorandum of argument or want to use a memorandum of argument, please contact the author of the memorandum of argument directly. Their name appears at the end of the memorandum of argument. The contact information for counsel is found in the “Counsel” tab of this page.
Downloadable PDFs
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Related links
The factums of the appellant, the respondent and the intervener will be posted here at least 2 weeks before the hearing unless they contain personal information, information that is subject to a publication ban, or any other information that is not part of the public record. You may also obtain copies of factums by filling out the Request for Court records form or by contacting the Court’s Records Centre either by email at records-dossiers@scc-csc.ca or by telephone at 613‑996‑7933 or at 1‑888‑551‑1185.
If you have questions about a factum or want permission to use a factum, please contact the author of the factum directly. Their contact information appears on the first page of each factum.
Downloadable PDFs
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Related links
The condensed books of the appellant, the respondent and the intervener will be posted here upon receipt of the electronic version, 2 days prior to the scheduled appeal hearing. You may also obtain copies of condensed books by filling out the Request for Court records form or by contacting the Court’s Records Centre either by email at records-dossiers@scc-csc.ca or by telephone at 613‑996‑7933 or at 1‑888‑551‑1185.
If you have questions about a condensed book or want permission to use a condensed book, please contact the author of the condensed book directly. Their contact information appears on the first page of each condensed book.
Downloadable PDFs
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