2011 QCCQ 1669, 2011 QCCQ 1669

Del Corpo c. Québec (Sous-ministre du Revenu) 2011 QCCQ 1669 COURT OF QUEBEC Small Claims Division CANADA PROVINCE OF QUEBEC DISTRICT OF MONTREAL Civil Division No: 500-32-106629-076 DATE: February 23, 2011 ______________________________________________________________________ BY THE HONOURABLE JULIE VEILLEUX, Q.C.J. ______________________________________________________________________ ANTHONY DEL CORPO Appellant v.

SOUS-MINISTRE DU REVENU DU QUÉBEC Respondent ______________________________________________________________________ JUDGMENT ______________________________________________________________________ [ 1 ] On March 29, 2010, Appellant filed an application for revocation of the judgment rendered by default against him on January 25, 2010, by Mr. Justice Martin Hébert. [ 2 ] The judgment by default was served upon Appellant by bailiff on March 12, 2010. [ 3 ] In April 2009, Appellant moved from his residence on Maurice-Duplessis in Montreal to Charron Street in Île-Bizard.

He did not inform the Registry of the Small Claims Division, Cour du Québec, of his new address. Therefore, he was not informed that a hearing date had been set and was not present before Mr. Justice Hébert on January 25, 2010 to present his arguments. [ 4 ] The Court finds the fact that Appellant had not been informed of the date of the hearing because the notice of convocation was sent to him at his previous address, to be a sufficient motive for Appellant’s failure to present his case. [ 5 ] In view of the foregoing and considering the wording of

Section 989 C.p.c., the Court grants Appellant’s application for revocation of judgment. THE CONTEXT [ 6 ] A notice of assessment was sent to Appellant in June of 2006 for the years 2000 and 2001. At the time, the Respondent considered that additional amounts (other income) should be included in the Appellant’s income. Following a notice of objection filed by Appellant, Respondent filed revised notices of assessment dated July 18, 2007. The Respondent’s position was to reduce Appellant’s other income from $5,468 to $4,516 (in 2000), and from $6,400 to $5,455 (in 2001).

Following said revised notices of assessment, Appellant filed his appeal and he now requests the Court to cancel them. [ 7 ] The proof offered by Appellant is based on his testimony as well as the testimony of Victoria Salmon’s, Appellant’s wife, and the documentary proof listed below. [ 8 ] According to Appellant, the amounts considered by Respondent in

Schedule 4 of the “Rapport sur le mouvement de trésorerie” are not accurate and do not represent his life style. The following issues are Appellant’s main concern and deal with the expenses considered by Respondent: - Leisure/Sports : ● $1,062 reduced to $500 by Respondent for 2000 ● $1,104 reduced to $500 by Respondent for 2001 According to Appellant and to his statement of personal expenses provided to Respondent in April of 2004, he incurred no expenses related to leisure and sports in 2000 and in 2001.

At the time, Appellant and his wife just had a baby; they did not have much money and had neither the time nor the revenue to endorse sports, go to movies and participate in any type of hobbies. Mrs. Salmon corroborates Appellant’s testimony in that respect.

- Food/Groceries : ● Respondent indicated $4,812 for the year 2000 and $4,908 for the year 2001. According to Appellant, he and his wife do not spend this amount of money for food, every year. They are vegetarians and grow their own food. In the statement of personal expenses, Appellant referred to an amount of $840 yearly for groceries. - Clothing : ● $1,138 reduced to $569 by Respondent for 2000 ● $1,161 reduced to $580 by Respondent for 2001 According to Appellant, these amounts do not reflect the expenses he incurred.

However, the Court notes that in his statement of personal expenses, Appellant refers to an amount of $500 in 2000 and the same amount in 2001 for clothing. - Hairdo/Esthetics : ● Respondent indicated $405 for the year 2000 and $413 for the year 2001. According to Appellant, these amounts do not correspond to his expenses. Instead, in his statement of personal expenses, Appellant refers to an amount of $150 for this item, both in 2000 and 2001. - Miscellaneous : ● Respondent indicated $1,939 for the year 2000 and $1,978 for the year 2001. According to Appellant, these amounts are not acceptable.

From Appellant’s standpoint, his revenues did not allow any other expenses than the bare minimum and he considers that the amounts calculated by Respondent do not reflect his reality. [ 9 ] Respondent explained, through the testimony of Mr. Mellaz, that when a taxpayer does not provide figures regarding specific expenses, Respondent refers to statistics published by the federal government. In that respect, the amounts which appear in the Leisure/Sports, Food/Groceries, Hairdo/Esthetics, Clothing and Miscellaneous categories were taken from the federal government statistics. [ 10 ] However, Mr.

Mellaz testified that the amount set for Miscellaneous in

Schedule 4, based on those statistics, should be of $925 instead of $1,939 for the year 2000 and of $925 instead of $1,978 for the year 2001. ANALYSIS [ 11 ] According to

section 1014 of the Taxation Act (R.S.Q.,

chapter I-3 ), the notices of assessment sent by Respondent to Appellant are presumed valid: 1014. An assessment shall, subject to being varied or vacated on an objection, appeal or

summary appeal and subject to a reassessment, be deemed to be valid and binding notwithstanding any error, defect or omission in the assessment or in any proceeding relating thereto. However, where a court vacates an assessment on the ground that it has been issued beyond the period during which the Minister may reassess or make an additional assessment under paragraph a, a.0.01 or a.1 of subsection 2 of

section 1010, as the case may be, the assessment replaced by the assessment so vacated remains valid and binding, but any time prescribed by a fiscal law and applicable in regard thereto begins to run from the date of the judgment vacating the last assessment. [ 12 ] In two recent decisions, the Court of Appeal reiterated the burden of the appellant who contests a notice of assessment [1] . Appellant must attack the presumption by offering a prima facie proof that it is not valid. In order to succeed, Appellant must offer documentary and/or circumstantial proof to support his allegations. [ 13 ] Considering Mr.

Mellaz’s testimony regarding the Miscellaneous item, the Court must conclude that Appellant proved, prima facie , that Respondent’s revised notices of assessment are not valid. [ 14 ] With respect to Appellant’s statement of personal expenses regarding the Clothing and Hairdo/Esthetics items, the Court concludes that Appellant has neglected to prove prima facie that the revised notices of assessment are not valid. [ 15 ] With respect to the Food/Groceries item, the proof offered by Appellant relies solely on his testimony and is not sufficient to prove, prima facie , that the revised notices of assessment are not valid. [ 16 ] However, with respect to the Leisure/Sports expenses, considered by Respondent ($500 in 2000 and $500 in 2001), the Court finds that Appellant’s testimony, together with Mrs.

Salmon’s testimony, showed circumstantial proof that in 2000 and 2001, they did not incur expenses which Respondent presumed they have incurred and which were considered in the calculation of their expenses. [ 17 ] In view of the foregoing, the Court considers it is justified to grant part of the arguments put forward by Appellant. Considering the foregoing, the revised notices of assessment are quashed and the file is referred for reassessment. FOR THESE REASONS, THE COURT:

QUASHES notice of assessment no. MW167818C02 dated July 18, 2007 for the year 2000 and notice of assessment no. MU611544C02 dated July 18, 2007 for the year 2001; REFERS the matter to the Minister so that new notices of assessment be prepared according to the terms of the present judgment; THE WHOLE , without costs. __________________________________ Julie Veilleux, Q.C.J. Date of hearing: January 17, 2011