A-171-06
LÉTOURNEAU J.A.
NOËL J.A.
A-170-06
BETWEEN:
and
HER MAJESTY THE QUEEN
A-171-06
BETWEEN:
NORMA MAEGE
Appellant
and
HER MAJESTY THE QUEEN
Respondent
Hearing held at Montréal, Quebec, on March 28, 2007.
Judgment delivered from the bench at Montréal, Quebec, on March 28, 2007.
REASONS FOR JUDGMENT OF THE COURT: NOËL J.A.
Date: 20070328
Dockets: A-170-06
A-171-06
Référence : 2007 FCA 125
CORAM : DESJARDINS J.A.
LÉTOURNEAU J.A.
NOËL J.A.
A-170-06
BETWEEN:
LAZAR JEVREMOVIC
Appellant
and
HER MAJESTY THE QUEEN
Respondent
A-171-06
BETWEEN:
NORMA MAEGE
Appellant
and
HER MAJESTY THE QUEEN
Respondent
REASONS FOR JUDGMENT OF THE COURT
(Delivered from the bench at Montréal, Quebec, on March 28, 2007)
[1] These are two appeals against a decision rendered by Rip J. of the Tax Court of Canada (2006 TCC 117), dismissing the appeals lodged by the appellants and denying their claim for deductions on the ground that the property with respect to which these deductions were claimed was a “tax shelter” within the meaning of section 237.1 of the Income Tax Act, R.S.C. 1985, c. 1 (5th Supp.) (the ITA).
[2] Paragraph 237.1(8) of the ITA provides that no amount can be claimed in respect of a tax shelter unless it has been duly registered with the Minister, and the evidence shows that it was not.
[3] The appellants submit that they did not invest in a tax shelter. They argue that their decision to invest was not made on the basis of “statements or representations” to the effect that, should the venture turn out to be unprofitable, the investor would recover his investment as a deductible loss, in addition to profiting from the federal and provincial investment tax credits. According to them it is the quality of the project, which after analysis, led them to invest.
[4] In this respect, Rip J. explained in his reasons that the existence of a tax shelter does not depend on the motivation of the investor, but rather on the equation provided for in section 237.1 of the Act (reasons, at paragraph 30). In this case, the product of this equation shows that the requirements of section 237.1 were met. We detect no error in this regard.
[5] As for the appellant Maege, counsel submitted that, although she was, as a promoter of the venture the author of “statements or representations” within the meaning of section 237.1, no statement was made to her. In this respect, we agree with Rip J., when he says that the fact that the appellant Maege did not make statements to herself is irrelevant. What is relevant is that she knew that beneficial tax consequences would arise as a result of her investment, as had been announced.
[6] The appeals will therefore be dismissed with only one set of costs. In accordance with the order consolidating both appeals, these reasons will be filed in the record of Lazar Jevremovic (A‑170-06) and a copy thereof will be filed in the record of Norma Maege (A-171-06).
“Marc Noël”
Judge
Certified true translation
François Brunet, LLB, BCL
FEDERAL COURT OF APPEAL
SOLICITORS OF RECORD
DOCKETS: A-170-06 and A-171-06
(APPEAL AGAINST A JUDGMENT RENDERED BY THE TAX COURT OF CANADA DATED MARCH 24, 2006 IN DOCKETS 2000-245(IT)G and 2003-2332(IT)G)
STYLE OF CAUSE: Lazar Jevremovic v. Her Majesty the Queen
Norma Maege v. Her Majesty the Queen
PLACE OF HEARING: Montréal, Quebec
DATE OF HEARING: March 28, 2007
REASONS FOR JUDGMENT BY: Desjardins J.A.
Létourneau J.A.
Noël J.A.
Delivered from the bench BY: Noël J.A.
APPEARANCES:
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FOR THE APPELLANTS
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FOR THE RESPONDENT
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SOLICITORS OF RECORD:
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Montréal, Quebec |
FOR THE APPELLANTS
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