DUMOULIN, J.:—The above-named firm appeals from the judgment issued on March 11, 1968 in which the Tax Appeal Board confirmed the assessments made by the Minister of National Revenue for the years 1959 ($1,061.52), 1960 ($69,027.18), 1961 ($73,657.90), 1962 ($137,244.55) and 1963 ($21,338.49), and totalling $302,329.64.
in support of its case appellant contends as follows :
1. By contract executed at Montreal on January 12, 1959, Canit Construction Québec Limitée and A. Janin & Compagnie Limitée (the appellant), operating jointly as Canit Janin Joint Venture, jointly and severally undertook to build for Quebec Cartier Mining Company (Canadian subsidiary of United Steel of America), an inland port and allied structures, in conformity with plans and specifications, for an amount of $13,233,467.00.
2. While these structures were being erected it became clear that the plans and specifications were inaccurate and faulty, thereby significantly altering the work to be done, and its cost.
It is alleged in paragraph 3 that the refusal by Quebec Car- tier Mining to modify the contract (Exhibit P-1) or consider the contractors’ offer to continue performance at a loss, compelled the latter ‘after many meetings, and after having gone to considerable expense, to halt the work, although conscious that they were thereby seriously injuring their reputation, and this due to the fault of Quebee Cartier Mining Company’’.
Paragraph 4 goes on to say that when the contract was breached the moneys due to the contractors amounted to $7,047,270.96, ‘‘and damages were estimated at $5,000,000, bringing the debt of Quebec Cartier Mining Company to $12,047,270.96”.
Paragraph 5 of the notice of appeal summarizes the long and rather tedious series of legal actions, negotiations and correspondence, including an expert opinion ordered by Court decree, which ultimatel brought the parties to the following solution of the dispute:
5. In order to compensate the contractors, terminate the action brought in the Superior Court, Rimouski District, Province of Quebec, under No. 24263, and foreclose other suits and claims, Quebec Cartier Mining Company and the contractors (the latter being placed in an extremely precarious position by the reprehensible acts of Quebec Cartier Mining Company, and being in urgent need of liquid funds to survive) agreed by a transaction dated April 3, 1962, to the payment by Quebec Cartier Mining Company of an amount of $4,000,000.00 by way of general and final indemnity.
We may note in passing that while the respondent, admits the transactional act and the amount agreed, he denies the remainder of paragraph 5.
Half the stipulated amount, or $2,000,000 was the share allotted to appellant.
We find the basis of the suit set out as follows in paragraph 12:
12. The sum of $2,000,000.00 received by appellant includes an allowance for the injury done to its name and reputation and compensates in the amount of $881,872.40 for the damages resulting therefrom.
As the Tax Appeal Board dismissed this claim, both in law and on the facts, and ruled that the amount of $2,000,000 did not include any compensation for damage to reputation or loss of prestige, but was only the pro tanto payment for work done and materials supplied, appellant has brought the present appeal.
For all practical purposes, respondent’s reply is set out in paragraphs 8, 9 and 10 of the defence pleadings:
8. The amount of $2,000,000.00 was paid to Appellant, and received by it, solely in payment for the work actually completed at the time of the transaction, and other rights and remedies deriving from the contract and the legislative provisions regarding contractual performance,
i.e. the ultimate liability of the contractor for partial or total loss “of the building within five years of its construction’’, and prescription of this remedy after five years, provided respectively in Articles 1688 and 2259 of the Civil Code of Quebec.
9. Appellant suffered no damage by way of injury to its name and reputation, by the fault of the Owner, through termination of the contract in question, and the decision to suspend the said work was taken of its own accord.
10. No part of this amount of $2,000,000.00 was paid or received on account of the alleged damages to Appellant’s name and reputation, referred to in para. 9.
The issue being thus joined, the parties are agreed that the evidence submitted to the Tax Appeal Board could be used for the same purposes here. This evidence, oral as well as documentary, is contained in four volumes introduced as numbers C-1, C-2, C-3 and C-4.
A few details will serve as an explanatory introduction to the transaction of April 3, 1962.
The contract (Exhibit P-1) provided for a deep-water harbour installation on the north shore of the St. Lawrence, which would connect this seaport with the mining centre of Gagnon, located a good distance inland, by means of a railway.
Appellant’s accounts show that for the years 1959, 1961, 1962 and 1963, operations were greatly in deficit, while for 1960 they showed a profit. The Janin company and its partner, Canit Construction, tried vainly to secure an upward revision of the contract, and then brought an action against Cartier Mining for $7,047,270.96, and ceased operations.
Cartier Mining in its turn responded with a counterclaim for damages for what it would have to pay to complete the work. The contractors returned with a request for an injunction and the present appellant brought an action against Quebec Cartier Mining for $5,000,000 for defamation and loss of business, dated February 15, 1962; notice of this action was however never given to Cartier Mining, possibly in the expectation that agreement could be reached.
This was the situation when the transaction of April 3, 1962 was concluded, a transaction which constitutes the chief point in the argument, and closes off all claims on both sides, whatever their nature or source, aS well as any remedy sought or to be sought, with the sole exception of those already excepted under the provisions of Articles 1688 and 2259.
It is only necessary to quote a few passages from this document to indicate its purport, namely that of a complete and reciprocal release between the parties:
WHEREAS in the course of carrying out said Contract (the contract signed in Montreal on January 12, 1959), as amended, disputes arose between the parties as a result of which Contractor ceased to work under said Contract and brought suit against Owner to set aside said Contract, as amended, on the ground of error, said suit bearing record No. 24263 in the Superior Court of the District of Rimouski and the Owner has brought a crossdemand against Contractor in damages under the said record number ;
WHEREAS Owner, without prejudice to and under reserve of its denial of liability in the circumstances and after negotiations with representatives of Contractor, is prepared to compromise and settle all disputes and matters in contention between it and Contractor in connection with said Contract, as amended, and said suit, the Contractor is prepared to enter into this Contr act of Transaction with Owner;
WHEREFORE, in consideration of the payment by Owner to Contractor of the sum of $4,000,000, in addition to those sums already paid by Owner to Contractor, Contractor hereby releases and discharges Owner, its agents, employees, officers and servants . . . from any and all claims, demands, actions, rights of action, expenses and costs whatsoever arising out of or connected with said Contract, as amended, and all other Contracts between Owner and Contractor as well as all work performed by Contractor for Owner at Port Cartier and all other causes of any nature whatsoever. . . .
And, further on, this stipulation foreclosing any claim “brought or to be brought”:
Contractor recognizes and Owner and Contractor acknowledge that the foregoing payments are being made in full and final settlement of said suits and of all disputed claims both of Owner and Contractor and interest thereon and that neither Owner nor Contractor has any other claim one against the other in connection with said Contract, as amended, or otherwise that has not been disclosed, negotiated, settled and transacted.
This transaction credited appellant, together with its associate Canit Construction, with a total sum of $13,427,047.36, whereas they had previously claimed the sum of $16,473,983.32.
The meaning and effect of the transaction are clearly analyzed in the decision of the learned member of the Tax Appeal Board, Me Maurice Boisvert, Q. C. (vol. 2, p. 44) who concluded that :
Appellant claims in its notice of appeal that “the sum of $2,000,000” which it received “includes an allowance for the injury done to its name and reputation, and compensates in the amount of $881,872.40 for the damages resulting therefrom’’.
Respondent for its part claims that this sum of $2,000,000 was paid to recompense appellant for the cost of all work performed for Cartier at the time the work was halted by appellant, thus terminating its contract.
At first glance it seems a very important question of law is presented; after examining the evidence, it proves to be purely and simply a question of fact, namely whether the sum of $2,000,000 paid by Cartier represented the cost of the work performed. In my opinion there can be no doubt of this. An expert opinion has revealed that the cost of the work performed exceeded by a considerable margin the sum provided in the contract. For this, appellant claimed the sum of $7,047,270.96, and Cartier agreed to pay $4,000,000; $2,000,000 of this went to appellant, who accepted it.
I am also in accord with the following:
It is not contested that damages were suffered on both sides. That is not the issue. If the parties to the suit, in making their settlement, did not allow for the damages that were suffered and waived such claims between themselves, as was in fact the case, these damages cannot now be invoked to deny the assessment. In the first place, these damages were not liquidated during the years under appeal. An assessment is not based on what may occur in the future, but rather on the concrete result of current accounting for each taxable year.
And this final observation (vol. 2, p. 51) :
The evidence has shown that for each of the years in question, appellant deducted the losses which it sustained as a result of the contract. The sum of $2,000,000 which it received affected its financial statements for the years under appeal by reducing its losses or increasing its profits.
Like the learned member, I see no Justification, however vague, for thinking that damages at the duly liquidated rate of $881,872.40 were included in the transactional payment of $2,000,000.
As, moreover, such damages could not have existed on April 3, 1962, what prodigious feat of clairvoyance could estimate such a problematical and conjectural figure?
Having said this, I hasten to add that unless I am mistaken my task has been made unusually simple by the admission by counsel for the Janin company, that the transaction did not include quasi-delictual damages; this admission in the oral pleading has not ceased to amaze me, and I requested it be repeated. If this is so, in appellant’s own opinion, what grounds of compensation must this payment of $2,000,000 be applied to?—if not to that of taxable, ‘‘earned income’’. Any attempt to alter its nature at this late date would be inadmissible.
Such a settlement, though it only reduced the losses sustained, was not duly pleaded at the correct time, and regrettable as such omission may be, it does not concern me.
For these reasons, the appeal is dismissed with costs in favour of respondent.