2013 QCCQ 10204, 2013 QCCQ 10204

Walsh c. Wolfe 2013 QCCQ 10204 JV0516 COUR OF QUEBEC « Small Claims Division» CANADA PROVINCE OF QUEBEC DISTRICT OF MONTREAL « Civil Chamber » N° : 500-32-126517-103 DATE : September 13, 2013 ______________________________________________________________________ PRESIDING: THE HONOURABLE SUZANNE VADBONCOEUR, J.C.Q. ______________________________________________________________________ BRIAN WALSH […] Notre-Dame de l'Ile Perrot (Qc) […] Plaintiff c.

LORNE WOLFE and GAYLE WOLFE […] Montréal (Qc) […] Defendants et TRINITY CAPITAL CORPORATION 46 Teddington Park Toronto, Ontario, M4N 2C6 et FRASER MILNER CASGRAIN 77 King ouest Toronto, Ontario, M5K 0A1 Impleaded parties ______________________________________________________________________ JUDGMENT ______________________________________________________________________ [ 1 ] The Plaintiff claims the amount of $7,265 reduced to $7,000 to comply with the monetary jurisdiction of the Small Claims Division. [ 2 ] This claim is based on the Defendants' responsibility as the Plaintiff's accountants in the context of a tax-shelter programme in which the Plaintiff invested. [ 3 ] The Defendants deny owing any money to the Plaintiff, denying having committed any fault towards the Plaintiff. [ 4 ] More particularly, Lorne Wolfe alleges that the claim is prescribed and that, in counselling the Plaintiff, he followed legal advice (D-1) given by Fraser Milner Casgrain, a law firm, to the promoter of the tax-shelter programme in issue, Trinity Capital Corporation (« TRINITY CAPITAL »).

He impleads this law firm in order that the Court may give a complete solution to the case. [ 5 ] He also impleads Trinity Capital who set up this programme in which the Plaintiff invested his money. [ 6 ] Gayle Wolfe, in a joint contestation, also denies owing any money to the Plaintiff, alleging not having given any counsel or

advice to the Plaintiff since she is not an accountant, and never acted as such. THE FACTS [ 7 ] In 2001, the Defendants advised the Plaintiff to participate in a donation tax shelter known as the « 2001 Donation Program for Medical Science and Technology » and promoted by Trinity Capital . [ 8 ] The Plaintiff gave two cheques, one of $6,000 to the order of Fraser Milner Casgrain, a law firm, and the second one of $1,000 to the order of 3978672 Canada inc., as appears from exhibit P-6.

He received his receipts. [ 9 ] Along with many other Canadians, he was reassessed by both the Canadian Revenue Agency (CRA) and Revenu Québec in 2005 (P-4 and P-5) who disqualified his entire charitable donation. Plaintiff did not pay any penalties but had to pay interest on his tax underpayment. [ 10 ] The said programme was declared invalid by the federal Courts in the test case of F.Max E. Maréchaux on November 12, 2009 [1] . In this case, it was decided (at all levels) that no amount advanced to the John McKellar Charitable Foundation, as arranged by Trinity Capital , could be considered to be a gift.

The Honourable Justice Judith Woods wrote as follows : « Even if it is accepted that the appellant's participation in the Program was influenced primarily by a charitable motivation, this would not assist the appellant. Once it is determined that the appellant anticipated to receive, and did receive, a benefit in return for the Donation, there is no gift. » [ 11 ] Therefore, the Plaintiff's objection was disallowed by the appeal division of the CRA and the reassessment was confirmed as more fully appears from the letter issued by the CRA on November 8, 2012 (Exhibit P-9).

DISCUSSION [ 12 ] In any legal action, the Plaintiff must demonstrate to the Court, on the balance of probabilities, that his or her claim is well founded, according to sections 2803 and 2804 of the Quebec Civil Code which read as follows : « 2803. A person wishing to assert a right shall prove the facts on which his claim is based. A person who alleges the nullity, modification or extinction of a right shall prove the facts on which he bases his allegation. 2804.

Evidence is sufficient if it renders the existence of a fact more probable than its non-existence, unless the law requires more convincing proof. » [ 13 ] Furthermore, in any action seeking a Defendant's responsability, a Plaintiff must demonstrate to the Court, by the same means, that the Defendant committed a fault, that the Plaintiff suffered damages and that there is a causal link between the fault and the damages.

Section 1457 Q.C.C. reads as follows : « 1457. Every person has a duty to abide by the rules of conduct which lie upon him, according to the circumstances, usage or law, so as not to cause injury to another. Where he is endowed with reason and fails in this duty, he is responsible for any injury he causes to another person by such fault and is liable to reparation for the injury, whether it be bodily, moral or material in nature.

He is also liable, in certain cases, to reparation for injury caused to another by the act or fault of another person or by the act of things in his custody. » [ 14 ] In the present case, the Plaintiff has not convinced the Court that the Defendants were at fault by counselling the Plaintiff to participate in the tax shelter. [ 15 ] The Court cannot apply to the present case the judgment rendered by the Ontario Superior Court in Lemberg v.

Perris (P-3) because the circumstances were very different in that case, as compared with those in the present case : the amounts invested were much greater and there was no doubt in the Court's mind that the accountant had breached his fiduciary obligations, namely by taking secret commissions on the sale of artwork from the promoter of the tax-shelter arrangement. No such evidence was given to the Court in the present case. [ 16 ] According to an

article filed as Exhibit P-11, charitable donation receipts were provided by the foundation for the full amount of the donation. « Through a series of subsequent transactions, the amounts donated essentially ended up coming back to Trinity with very little being used for charitable purposes ». [ 17 ] The Plaintiff did not offer any evidence showing that Mr. or Mrs Wolfe acted in bad faith and were dishonest towards the Plaintiff. No evidence demonstrated that they knew about the whole scheme and recommended to the Plaintiff to participate in that scheme in 2001. [ 18 ] Mr.

Wolfe could not expect at that time that the CRA's decision in the test case of F.Max E. Maréchaux would be unfavourable to the investors. He cannot be blamed for that decision, he had nothing to do with it. [ 19 ] Due to the lack of evidence on the Plaintiff's part, the Court concludes that the latter did not fulfill his burden of proof and therefore, the Court has no choice but to dismiss his claim. FOR THESE REASONS THE COURT :

DISMISSES the Plaintiff's claim, with costs. __________________________________ SUZANNE VADBONCOEUR, J.C.Q. Hearing date : April, 15 th , 2013