Case information

Constitutional law — Courts — Jurisdiction — Jurisdiction of Court of Québec — Taxation — Income tax — Computation of income — Business income from sale of lands not reported for 2005, 2007 and 2008 taxation years — Judgment on constitutional jurisdiction of Court of Québec rendered in course of proceeding — Taxpayer alleging absence of monetary limit on appeals from assessments under Tax Administration Act — Appeal from judgment on Court of Québec’s jurisdiction improperly initiated and out of time — Constitutional limits on jurisdiction of Court of Québec — Whether Court of Québec had jurisdiction in this case — Whether courts below correctly applied s. 80 of Taxation Act and/or Victuni v. Minister of Revenue of Quebec, [1980] 1 S.C.R. 580 — Whether courts below correctly applied rules on deduction for doubtful debts — Constitution Act, 1867, s. 96 — Tax Administration Act, R.S.Q., c. A 6.002, s. 93.1.10 — Taxation Act, CQLR, c. I 3, ss. 80 and 140.

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 applicant, André Delorme, appealed notices of assessment for 2005, 2007 and 2008 that had been issued and confirmed by the respondent, the Agence du revenu du Québec (ARQ). The assessments had the effect of adding $1,647,362.00 in business income to the computation of Mr. Delorme’s total income. The business income was related to five real estate transactions allegedly carried out by Mr. Delorme. For certain transactions, he claimed deductions, including a deduction for a portion of a sale price that he considered a doubtful debt. For others, he argued that any gain had to be attributed to 104600 Canada Inc., one of the corporate vehicles used for part of his business. In a first judgment, the Court of Québec refused to decline jurisdiction and to refer the case to the Superior Court. In a second judgment, the Court of Québec found that Mr. Delorme had failed to rebut the presumption that the assessments were valid. The appeals from both judgments were dismissed, first by way of a motion to dismiss the appeal on the constitutional question and then, following a hearing, from the bench on the taxation issue.