2014 QCCQ 3802, 2014 QCCQ 3802

JA0585 Passucci c. Quebec (Attorney General) 2014 QCCQ 3802 COURT OF QUEBEC CANADA PROVINCE OF QUEBEC DISTRICT OF MONTREAL Civil Division No: 500-22-190018-120 DATE: May 20, 2014. ______________________________________________________________________ BY THE HONOURABLE ARMANDO AZNAR, J.C.Q. ______________________________________________________________________ ANTONIO PASSUCCI and CONCETTA PASSUCCI Plaintiffs v.

ATTORNEY GENERAL OF QUEBEC and L'AGENCE DU REVENU DU QUÉBEC Defendants ______________________________________________________________________ JUDGMENT ______________________________________________________________________ [ 1 ] Defendants submit to the Court, for adjudication, a request for the dismissal of the action instituted by Plaintiffs. [ 2 ] The exception to dismiss of Defendants is based article 165 (1) C.C.P. which reads as follows: The defendant may ask for the dismissal of the action if:

(1) There is lis pendens or res judicata ; [ 3 ] This being said, the Court refers to

article 2848 of the Civil Code of Quebec which reads as follows: 2848. The authority of a final judgment ( res judicata ) is an absolute presumption; it applies only to the object of the judgment when the demand is based on the same cause and is between the same parties acting in the same qualities and the thing applied for is the same.

However, a judgment deciding a class action has the authority of a final judgment with respect to the parties and the members of the group who have not excluded themselves therefrom. [ 4 ] Although the allegations contained in the action instituted by Plaintiffs, entitled "Motion", are, with all due respect, difficult to comprehend and follow, a careful examination of the said allegations reveals that Plaintiffs believe that Defendants have not acted fairly n'or in accordance of the law and must therefore reimburse to them an amount of $ 11,200.00.

In fact, this amount represents the monies they entrusted to Defendants in their capacity of mandatary of the Federal fiscal authorities in regard to the payment of the "GST" (Federal goods and sales tax). [ 5 ] In essence, the action instituted by Plaintiffs against Defendants is, in part, an extra-contractual claim for damages for non- respect of various laws including the Constitution Act of 1982 and the Quebec Charter of Human Rights and Freedoms [1] .

In addition, although final judgment has been rendered on this issue, they still maintain that they should not have to pay any "GST". [ 6 ] In the defence filed before the Court, Defendants specifically request that the action instituted by Plaintiffs be dismissed on the grounds of " res judicata ". [ 7 ] In the said defence, supported by exhibits they have filed, Defendants give a clear presentation of the facts having led to the litigation at stake before this Court. More particularly, Defendants allege the following. "Overwiew 14.

Plaintiffs' application for leave to appeal a judgment of the Court of Appeal of Quebec was filed before the Supreme Court of

Canada and dismissed on March 3, 2011 ( Exhibit D-1 ); 15. The Court of Appeal dismissed the Plaintiffs' appeal on September 23, 2010 ( Exhibit D-2 ); 16. On May 28, 2010, the Superior Court dismissed the Plaintiffs' introductory proceeding whereby they were seeking extra- contractual damages and interest from Revenu Quebec, in the amount of $ 9,407,161.20 ( Exhibit D-3 ); Audit and assessment of Restaurant au 7e Ciel 17. In 2003, an audit was conducted by Revenu Québec under an

An Act respecting the Québec Sales Tax, (R.S.Q., ch. T-0.1) and the Excise Tax Act, ( R.S.C. (1985), ch. E-15 with respect to the restaurant operated by the Plaintiff, Concetta Passucci; 18. The audit resulted in assessments being made in the amount of $ 42,396.05 under

An act respecting the Québec Sales Tax (hereinafter the "QST assessment") and in the amount of $ 36,981.14 under the Excise Tax Act (hereinafter the "GST assessment"). 19. Notices of objection were filed against both assessments and they were confirmed by Revenu Québec for the amounts stated in the preceding paragraph; Appeals before the Court of Québec and before the Tax Court of Canada 20. The Plaintiffs filed appeals before the Court of Québec, with respect to the QST assessment, and before the Tax Court of Canada, with respect to the GST assessment; 21.

The appeal with respect to the GST assessment was heard first, on October 14, 2005, by Lamarre T.C.C.J. who took the case under advisement; 22. Meanwhile, the Court of Québec heard the appeal with respect to the QST assessment on June 1 and 2, 2006 and Marengo Q.C.J. rendered her judgment on June 28, 2006 vacating the QST assessment ( Exhibit D-4 ); 23. On july, 5 2006, Lamarre T.C.C.J. rendered her judgment whereby the Plaintiff, Concetta Passucci, was partially successful in having the GST assessment reduced by 25 % ( Exhibit D-5 ); 24.

The Plaintiff, Concetta Passucci, filed an appeal of the Tax Court of Canada judgment which was dismissed by the Federal Court of Appeal on April 19, 2007 ( Exhibit D-6 ); 25. The Plaintiff, Concetta Passucci, seeked leave to appeal the judgment of the Federal Court of Appeal but the Supreme Court of Canada dismissed her motion (docket 32068, September 20, 2007); 26.

The Plaintiffs are therefore in the position were their contestation of the QST assessment has been totally successful while their contestation of the GST assessment has been only successful in a reduction of the GST due of 25%; Grounds for exception to dismiss action 27 Defendant submits that the Plaintiffs' Motion should be dismissed on the grounds that there is res judicata with the provisions of section 165 (1) of the Code of Civil Procedure of Québec (L.R.Q., c. C-25 ); 28. Plaintiffs are contesting that they owe Revenu Quebec any money; 29.

In fact, the trial judge, Justice Lamarre, reduced the GST due by 25 % as appears clearly from the judgment (Exhibit D-5) and was later confirmed by the Federal Court of Appeal (Exhibit D-6); 30. Plaintiffs' main argument that the judgment of the Court of Québec rendered on the QST assessment should prevail over the judgment of the Tax Court of Canada on the GST assessment is unfounded; 31. Plaintiff's pretention that Defendants are liable towards them for applying and respecting the judgments rendered is unfounded; 32.

Both Defendant's liability as well as Plaintiffs' argument that the Court of Québec judgment should prevail over the Tax Court of Canada's judgment were already invoked in their introductory proceeding before the Superior Court and dismissed on May 28, 2010 (Exhibit D-3); 33. The Superior Court's judgment was confirmed by the Court of Appeal on September 23, 2010 (Exhibit D-2); 34. The trial judge found that the Plaintiffs failed to provide any evidence as to fault, damages and causality in their claim against Revenu Québec; 35.

Both Defendant's liability and the validity of the GST assessment have been the subject of previous litigation before the Courts and decisions have been rendered; 36.

There are the same parties, same subjects and same issues therefore, res judicata applies;" [ 8 ] The exhibits filed by Defendants (Exhibits D-1 to D-6) in support of the exception to dismiss consist of judgments involving Plaintiffs rendered by the Supreme Court of Canada, the Court of Appeal, the Superior Court of Quebec, the Court of Québec, the Tax Court of Canada and the Federal Court of Appeal. [ 9 ] Considering the issues raised in the action instituted by Plaintiffs before this Court and considering the contents of the

judgments previously rendered (Exhibits D-1 to D-6), the Court is in the opinion that said action must be dismissed on the basis of " res judicata " as submitted by Defendants. [ 10 ] More particularly, the question of the liability of Plaintiff, Concetta Passucci, for the payment of the "GST" that was collected by Defendants acting as mandatary of the Federal fiscal authorities has been resolved by judgment of the Tax Court of Canada [2] .This judgment was confirmed by the Federal Court of Appeal [3] . [ 11 ] The question of the extra-contractual liability of Defendants in regard to Plaintiffs when acting as mandatary of the Federal fiscal authorities for the purpose of the collection and remittance of the "GST", has been disposed of by judgment of the Superior Court [4] in an action instituted by said Plaintiffs against Defendants.

This judgment was confirmed by the Court of Appeal [5] . Furthermore, leave to appeal to the Supreme Court was dismissed [6] [ 12 ] In view of the preceding, the Court is in the opinion that Defendants' exception to dismiss based on " res judicata " is well founded in fact and in law. Consequently, the action instituted by Plaintiffs is dismissed. FOR THE FOREGOING REASONS, THE COURT: GRANTS Defendants' exception to dismiss; DISMISSES Plaintiffs' action, with costs . __________________________________ ARMANDO AZNAR, J.C.Q.

Antonio Passucci and Concetta Passucci Plaintiffs Me Joëlle Bitton Larivière Meunier Attorney for Defendant Date of hearing: April 30, 2014.