GLEN FRENCH v. the other appellants listed in the “Revised Schedule A”, 2016 FCA 64

Date: 20160229 Docket: A-102-15 Citation: 2016 FCA 64 CORAM: NOËL C.J. SCOTT J.A. DE MONTIGNY J.A. BETWEEN: GLEN FRENCH And the other appellants listed in the “Revised

Schedule A” Appellants and HER MAJESTY THE QUEEN Respondent Heard at Montréal, Quebec, on February 11, 2016. Judgment delivered at Ottawa, Ontario, on February 29, 2016. REASONS FOR JUDGMENT BY: NOËL C.J. CONCURRED IN BY: SCOTT J.A. DE MONTIGNY J.A. Date: 20160229 Docket: A-102-15 Citation: 2016 FCA 64 CORAM: NOËL C.J. SCOTT J.A. DE MONTIGNY J.A. BETWEEN: GLEN FRENCH And the other appellants listed in the “Revised

Schedule A” Appellants and HER MAJESTY THE QUEEN Respondent REASONS FOR JUDGMENT NOËL C.J. [ 1 ] These appeals brought by Glen French (Mr. French or the appellant) and 41 other appellants listed in Revised

Schedule A are from an interlocutory order issued by the Tax Court of Canada ( 2015 TCC 35 ) wherein C. Miller J. (the Tax Court judge) allowed a motion by Her Majesty the Queen (the respondent) to strike a plea in the appellants’ respective Amended Notices of Appeal. The plea in question invokes sections 8.1 and 8.2 of the

Interpretation Act , R.S.C. 1985, c. I-21 (the

Interpretation Act ) and alleges that in assessing

the legal validity of a gift under the Income Tax Act , R.S.C. 1985, c. 1 (5th Supp.) (the ITA ), Parliament intended that a uniform concept of gift in line with the civil law of the Province of Québec be applied across Canada. [ 2 ] The 42 appeals were consolidated by order of this Court issued on April 22, 2015, Mr. French being designated as the lead appellant.

In conformity with this order, the reasons which follow will be filed in docket A-102-15 and copy thereof will be filed as reasons for judgment in each of the consolidated appeals. [ 3 ] The legislative provisions which are relevant to the analysis are set out in Annex I to these reasons. I. BACKGROUND [ 4 ] The assessments in issue disallow in whole the appellant’s claimed tax credits with respect to alleged gifts made to Ideas Canada Foundation, a registered charity, pursuant to

section 118.1 of the ITA . Mr. French contends that he made such gifts during the 2000, 2001 and 2002 taxation years. A portion of Mr. French’s gifts was made from his personal funds while the remainder was funded by loans tied to the gifts. [ 5 ] Mr. French’s primary position is that he is entitled to the full amount of the claimed tax credits. He further maintains in the alternative that he is entitled to the tax credits claimed in respect of the portion of the gifts that exceeded the value of any consideration he would have received in the process. In making the latter argument Mr.

French invokes the civil law of the Province of Quebec even though none of the purported donations were made in that province. The plea in question reads:

PART III – STATUTORY PROVISIONS AND REASONS 18. The Appellant relies, inter alia , on …

article 1810 of the Civil Code of Québec (“ CCQ ”) and sections 8.1 and 8.2 of the

Interpretation Act , R.S.C. 1985, c. I-21 (“

Interpretation Act ”). … Partial Deduction 23. In the alternative, the Appellant should be entitled to a deduction for that portion of each of the Donations that exceeded the value of any benefit or remuneration obtained from each of the Donations (excluding the value of any tax advantage). 24. Under the civil law,

Article 1810 of the CCQ expressly provides that “a remunerative gift … constitutes a gift … for the value in excess of that of the remuneration”. Consequently, to the extent that the Loans or some aspect thereof may have constituted remuneration to the Appellant, the Donations less the remuneration constituted a “gift” in Québec through operation of sections 8.1 and 8.2 of the

Interpretation Act . 25. Had the Appellant been resident of Québec during the Taxation Years, he would unquestionably be entitled under

section 118.1 of the Act to a deduction of the portion of the Donations in excess of the remuneration. 26. Parliament did not intend for

section 118.1 of the Act to produce radically different results for taxpayers in Québec that would not apply to taxpayers in the rest of Canada. …

PART IV – RELIEF SOUGHT 28. For these reasons, the Appellant asks this Court to: ... REFER the matter back to the CRA for reconsideration and reassessment … on the basis that the Appellant was entitled to deduct the portion of the Tax Credits attributable to the portion of the Donations in excess of any benefit or remuneration received by the Appellant for the Donations; [ 6 ] The Tax Court judge struck the above plea pursuant to rule 53(1) (

d) of the Tax Court of Canada Rules (General Procedure) , SOR 90/688a ( TCC Rules ), on the basis that it was doomed to fail. For the reasons which follow, I have come to the view that it is not plain and obvious that the impugned plea cannot succeed and that the appeal should accordingly be allowed. II. DECISION OF THE TAX COURT JUDGE [ 7 ] The Tax Court judge first emphasized the high threshold that must be met before a plea can be struck under rule 53(1) of the TCC Rules , i.e.: it must be plain and obvious that it has no chance of success.

He then went on to examine whether this was the case. [ 8 ] He rejected the proposition that one may resort to the civil law of Quebec to determine when a gift arises for purposes of applying the ITA outside of the Province of Quebec. Sections 8.1 and 8.2 of the

Interpretation Act ensure that civil law is not applied in the rest of Canada and that common law is not applied in Quebec when private law concepts of the two legal systems are called into play, which, the Tax Court judge held, “is the very situation before me” (Reasons at para. 13). He added that nothing in the

preamble to the Federal Law–Civil Law Harmonization Act, No. 1 , S.C. 2001, c. 4, which amended the

Interpretation Act by introducing sections 8.1 and 8.2, “invites one, as an interpreter of federal legislation, to ignore common law in favour of civil law or vice versa : indeed, quite the

opposite” (Reasons at para. 16). [9] In any event, he took the view that there was no need to resort to the civil law, for the common law meaning of “gift” hasbeen clearly established in the case law. In particular, he pointed to the definition set out in Friedberg v. R., (FCA),[1992] 1 C.T.C. 1 (Fed. A.D.) at para. 4 [Friedberg] and taken up in Maréchaux v.

Canada, 2010 FCA 287 at para. 3 [Maréchaux FCA]: … a gift is a voluntary transfer of property owned by a donor to a donee, in return for which no benefit or consideration flows to thedonor. [My emphasis] [10] Accordingly, the Tax Court judge discarded the appellant’s contention that where the requisite intent is present, the commonlaw arguably recognizes as a gift a transfer of property for partial consideration (herein a split or remunerative gift), holding that such aproposition cannot be sustained given the decisions of this Court in Maréchaux FCA, Kossow v. Canada, 2013 FCA 283 [Kossow FCA],and Canada v.

Berg, 2014 FCA 25 [Berg FCA] (Reasons at para. 19): The Appellants suggest that common law has acknowledged the concept of split receipting for a long time (see for example Woolner vCanada, [1997] T.C.J. No. 1395). I presume this is raised to convince me that the common law concept of gift is murky. Reliance onWoolner does not justify looking to Québec law, but goes more to the Appellants’ view of the correctness of the Maréchaux [FCA],Kossow [FCA] and … Berg [FCA] … decisions.

Again, it certainly does not sway me that there is any confusion with respect to thecommon law meaning of “gift”. [11] The Tax Court judge dismissed the idea that bijuralism could entail the principle of uniformity, noting that it is neither itsobjective nor where it is heading as a legal doctrine (Reasons at para. 14): The Appellants’ contention that Parliament did not intend

section 118.1 of the Act to produce radically different results simply has nofoundation in the law, notwithstanding it may be supportable by common sense. It is not an argument. [12] He found support in the December 2002 amendments to the ITA “allowing a tax credit for certain ‘gifts’ that would be invalidunder private law solely because the taxpayer has received a benefit in return for making the gift” (Reasons at para. 23). Theseamendments were enacted in 2013 with an effective date of December 21, 2002 (the 2002 amendments).

The Tax Court judge explainedthat by providing a result more clearly reflecting the civil law concept of remunerative gift, the 2002 amendments “legislativelydissociates the common law meaning of gift from the federal legislation” (Reasons at para. 23). [13] As to the appellant’s argument that the 2002 amendments were meant to clarify the law rather than change it, the Tax Courtjudge relied on the October 2012 Department of Finance’s Explanatory Notes introducing these amendments which recognize that a saleat less than fair market value could be treated in part as a gift pursuant to the civil law, but not the common law.

By identifying situationsin which the charitable donation tax credit will be available, notwithstanding benefits received by the donor taxpayer, Parliament hasclearly changed the law (Reasons at para. 24). [14] Unable to perceive “a glimmer of a legal basis” upon which the appellant could build an argument based on sections 8.1 and8.2 of the

Interpretation Act, the Tax Court judge concluded that allowing the appellant to pursue such an argument would be a waste oftime for all the stakeholders involved (Reasons at para. 26). III. THE POSITION OF THE APPELLANT [15] The appellant argues that the Tax Court judge’s decision is based on a misunderstanding of the purpose and scope of sections8.1 and 8.2 of the

Interpretation Act. He asserts that this Court has repeatedly favoured an

interpretation of federal legislation thataccords with both common law and civil law traditions while still reaching a reasonably uniform result across Canada, citing, inter alia,Grimard v. Canada, 2009 FCA 47 [Grimard] and Canada v. 9101-2310 Québec inc., 2013 FCA 241 [9101-2310 Québec inc.]. [16] Relying on, inter alia, The Queen v. Zandstra, (FC), [1974] C.T.C. 503 (Fed. T.D.) [Zandstra] andWoolner v. R., (TCC), [1999] 4 C.T.C. 2512 (T.C.C.) [Woolner], aff’d (FCA), [2000] 1 C.T.C. 35(Fed. A.D.) [Woolner FCA], the appellant submits that the case law is not as clear as the Tax Court judge found.

Consistent with thisposition, he argues that the purpose of the 2002 amendments was to clarify the state of the law rather than change it. [17] To the extent that prior decisions of this Court preclude split gifting in the common law provinces, the appellant asks that theybe reconsidered as they give rise to a result that is contrary to what Parliament intended. Specifically, these prior decisions did notconsider sections 8.1 and 8.2 of the

Interpretation Act and the impact of the civil law on the construction of the word “gift” as it is usedin subsection 118.1(3) of the Act. [18] The appellant also provides two alternative grounds on which this Court should allow the appeal, at least with respect to theprayer for relief set out in paragraph 28 of Mr. French’s Amended Notice of Appeal. First, in the event that the general anti-avoidancerule applies, the resulting tax consequences pursuant to subsection 245(2) of the ITA would require recognition of the split gift and thetax credits which correspond to the cash portion of the gift.

Second, should the Court determine that the loans constituted a benefit, theappellant submits that the cash portion of the transfer should be treated separately as a gift, on the basis of the rule set out in BarclaysBank Ltd. v. Quistclose Investments Ltd., [1968] 3 All. E.R. 651 (H.L.), thereby allowing the appellant to claim the corresponding taxcredits. IV. THE POSITION OF THE RESPONDENT

[19] The respondent submits that the Tax Court judge’s decision to strike portions of the appellant’s pleadings is discretionary,involves a question of mixed fact and law, and should not therefore be interfered with absent a palpable and overriding error, unless itcontains an extricable error of law. [20] The respondent contends that the Tax Court judge applied the correct test and arrived at the right conclusion. Specifically, hewas correct in holding that sections 8.1 and 8.2 of the

Interpretation Act, in this case, called for the applicable private law concept of“gift”, which for the appellant means the common law concept of “gift”. Indeed,

section 118.1 of the ITA does not direct the use of civillaw in the common law provinces for the purpose of the definition of “gift”. [21] Relying on Maréchaux FCA, Kossow FCA, Berg FCA, and McNamee v. McNamee, 2011 ONCA 533, the respondent arguesthat, contrary to the civil law concept of remunerative gift permitting a transaction to be split into a gift component and a non-giftcomponent, “in the common law, generally speaking any material benefit received by the donor in return for a gift will vitiate the gift”(respondent’s memorandum of fact and law at para. 33). [22] The respondent rejects the appellant’s proposition that uniformity is a principle codified in the

Interpretation Act. On thecontrary, sections 8.1 and 8.2 of the

Interpretation Act acknowledge that the recognition of bijuralism and complementary can lead todifferent results in applying federal legislation. Indeed, these sections ensure the integrity not only of the civil law tradition, but also ofthe common law tradition. [23] The respondent disagrees with the contention that Courts have taken an interpretative approach melding common law andcivil law concepts so as to achieve uniform results across Canada. In so arguing, the respondent cites, inter alia, Caisse populaireDesjardins de l’Est de Drummond v.

Canada, 2009 SCC 29, Grimard, and 9101-2310 Québec inc., arguing that these decisions actuallyundermine the appellant’s submissions. [24] While Parliament can derogate from the private law of the provinces, by way of dissociation, it has not done so with respect tothe meaning of “gift” in

section 118.1 of the ITA. This changed as a result of the 2002 amendments. Reiterating the Tax Court judge’sreasons, the respondent argues that the Department of Finance, in the Explanatory Notes relating to these amendments, recognized thatprior to the effective date of the amendments, any consideration would have vitiated a gift at common law. As the 2002 amendmentswere not in effect when Mr. French’s purported gifts were made, it follows that the appeal must be dismissed. V. ANALYSIS [25] On a motion to strike pursuant to rule 53(1)(

d) of the TCC Rules, the question which arises is whether it is plain and obviousthat the argument has no reasonable prospect of success (R. v. Imperial Tobacco Canada Ltd., 2011 SCC 42 at para. 17). [26] The Tax Court judge’s decision allowing the motion to strike is discretionary in nature. Absent a legal error or an error in legalprinciple, the appellant must show a readily apparent error that could change the result of the case (Turmel v. Canada, 2016 FCA 9;Imperial Manufacturing Group Inc. v. Decor Grates Incorporated, 2015 FCA 100, applying Housen v. Nikolaisen, 2002 SCC 33).

In myview, such a readily apparent and determinative error has been demonstrated. [27] The issue in the present appeal is whether it is arguable when regard is had to sections 8.1 and 8.2 of the

Interpretation Actthat Parliament intended the word “gift” as it is used in subsection 118.1(3), to encompass split gifts, in line with the notion recognizedby the civil law. The task in ascertaining Parliament’s intent is always the same.

One must read the provision in context and give thewords a meaning that is harmonious with the scheme of the act, its object and the intention of Parliament (Rizzo & Rizzo Shoes Ltd. (Re), (SCC), [1998] 1 S.C.R. 27). [28] The Tax Court judge correctly postulated that the starting point of the analysis pursuant to sections 8.1 and 8.2 of theInterpretation Act is that effect be given to the private law governing a transaction “unless otherwise provided by law”.

He went on todiscard as “hopeless” the contention that prior to the 2002 amendments Parliament could have intended to exclude the common lawmeaning of “gift” in favour of the civil law definition (Reasons at para. 22).

Only as a result of these amendments can it be said thatParliament provided otherwise by recognizing split gifts, wherever made (Reasons, para. 24). [29] In so holding, the Tax Court judge reasoned that if the purpose and effect of the 2002 amendments was to change the law inorder to allow for split gifts, it necessarily followed that no such gift could be recognized prior to the coming into force of theseamendments.

Hence the conviction with which he found that the appellant’s plea had no chance of success (Reasons, paras. 25 and 26). [30] The Tax Court judge found support in his assessment of the purpose of the 2002 amendments in the Explanatory Notes whichaccompanied the 2002 amendments. In his view, these notes make it clear that the purpose was to recognize a form of gift which had novalidity under the prior law.

His exact words are as follows (Reasons at para. 24): Even in the Department of Finance’s own Explanatory Notes introducing the [2002] amendments it is recognized that a sale at less thanfair market value could be treated in part as a gift in civil law, but not in common law.

The [2002] amendments have clearly changed thelaw by identifying situations in which the charitable donation tax credit will be available, notwithstanding benefits received by the donortaxpayer. [31] Consistent with this reading of the Explanatory Notes and his assessment of the purpose of the 2002 amendments, the TaxCourt judge rejected any suggestion that the prior jurisprudence could be read as recognizing the validity of split gifts or was in any way“murky” in this regard (Reasons at para. 19). [32] I will first address the Tax Court judge’s reading of the Explanatory Notes.

These notes, after recognizing that “[a]t commonlaw the presence of a consideration of any value whatsoever makes a gift impossible” and that “[a]s such, at common law a contract todispose of a property to a charity at a price below fair market value would not generally be considered to include a gift”, go on to state

that “[n]evertheless, there have been certain decisions made under the common law where it has been found that a transfer of property toa charity was made partly in consideration for services and partly as a gift”.

That is the context in which it is later stated that“[s]ubsections 248(30), (31) and (32) are added to that Act to clarify the circumstances under which taxpayers and donees may beeligible for tax benefits available under the Act in respect of the impoverishment of a taxpayer in favour of a donee” [my emphasis]. [33] On a plain reading, the Explanatory Notes suggest that the state of the jurisprudence in the common law provinces was not ascertain as the Tax Court judge held and that there was a need for clarification.

An examination of the case law supports that view. [34] I begin by noting that the often-cited definition of “gift” set out in Friedberg does not exclude the possibility that Parliamentintended the meaning of “gift” to extend to split gifts.

While the Court did state that “a gift is a voluntary transfer of property owned by adonor to a donee, in return for which no benefit or consideration flows to the donor” (at para. 4), Friedberg was not a split gifting case.At no point did the Court address the question whether, in the presence of the requisite donative intent, partial consideration necessarilyvitiates a gift. [35] In fact, neither Zandstra nor The Queen v. McBurney, (FCA), [1985] 2 C.T.C. 214 (Fed.

A.D.)[McBurney], which are both referred to in Friedberg (at para. 4), stand for the proposition that consideration received by a donor vitiatesthe whole gift.

On the contrary, the Court in McBurney acknowledged the existence of a split gift (McBurney at para. 19) and the Courtin Zandstra indicates, without expressing any form of disagreement, that the underlying assessments recognize the validity of a split gift(Zandstra at paras. 9 and 10). [36] It is noteworthy that the ratio decidendi of Zandstra and McBurney was more recently adopted by this Court in Woolner FCA.In that case, the Tax Court concluded that donations made over and beyond the secular tuition fees were “gifts” within the meaning ofsubsection 118.1(3) of the ITA, thereby recognizing what was in effect a split gift.

While the issue on appeal turned on whether thedisallowed portion for secular tuition fees should be treated as a gift, at no point did this Court question the Tax Court’s recognition ofthe gift component (Woolner FCA at paras. 2, 6 and 14). [37] The Tax Court judge viewed the appellant’s reliance on Woolner as an attempt to question “the correctness of the Maréchaux[FCA], Kossow [FCA] and … Berg [FCA] … decisions” (Reasons at para. 19).

According to him, these three cases which postdateWoolner did away with any possibility that a split gift be recognized in applying the ITA in the common law provinces (Reasons at paras.19, 23 and 24). Again, this requires that we take a closer look at these decisions. [38] The decision of this Court in Maréchaux FCA involved a leveraged charitable donation scheme whereby Mr. Maréchauxtransferred $100,000 to a registered charity and received the corresponding charitable donation tax receipt.

Out of the $100,000transferred, $20,000 came from his own money while the remaining $80,000 came from an interest-free loan. In upholding the TaxCourt’s decision, denying the tax credit claimed, this Court endorsed paragraph 49 of Woods J.’s reasons holding that the $20,000portion of the transfer lacked the requisite donative intent (Maréchaux FCA at para. 12): There is just one interconnected transaction here, and no part of it can be considered a gift that the appellant gave in expectation of noreturn. [My emphasis] [39] Therefore, it is not clear that the decision of the Tax Court in Maréchaux v.

R., 2009 TCC 587 [Maréchaux TCC], asconfirmed by this Court, rejected split gifting. On the contrary, Woods J.’s statement, which this Court did not comment on one way orthe other, appeared to leave the question open in stressing that “[i]n some circumstances, it may be appropriate to separate a transactioninto two parts, such that there is in part a gift, and in part something else” (Maréchaux TCC at para. 48). [40] Maréchaux FCA was later discussed in Kossow v. Canada, 2012 TCC 325 [Kossow TCC] where a similar leveraged charitabledonation scheme was before the Court.

The issue was whether Maréchaux FCA was dispositive of the appeal. Like Mr. Maréchaux, Ms.Kossow argued, among other things, that a gift should be recognized for the $10,000 cash portion of her transfer to the registered charity.At the Tax Court, V. Miller J. dismissed this argument concluding that, as in Maréchaux FCA, “[n]o part of the Donation was given as agift without expectation of a return” [my emphasis] (Kossow TCC at para. 75). This Court upheld that decision on the same basis.

Again,the Court made no firm pronouncement on the question whether a split gift could validly be made. [41] Lastly, in Berg FCA, the issue of split gifting was not raised. The Court simply found that Mr. Berg had receivedconsideration for his alleged gift (Berg FCA at para. 28) and that he did not have the required donative intent (ibidem at para. 29). [42] In short, it cannot be said with certainty that the meaning of “gift” prior to the 2002 amendments excluded the notion of splitgift in the common law provinces and that the effect of these amendments was to change that state of affairs.

Indeed, it is equallyplausible that these amendments clarified an area of the law that was uncertain. [43] Finally, the Tax Court judge found that a quest for uniformity in the application of federal legislation is not, in and of itself, asufficient reason for disregarding the applicable private law. I agree. The objective of sections 8.1 and 8.2 of the

Interpretation Act is torecognize the role of the civil law and the common law in the application of federal legislation which necessarily entails the possibility ofdiverging results. [44] However, the appellant does not invoke uniformity for the sake of uniformity. The appellant’s plea is based on the broaderproposition that Parliament intended to recognize split gifts, wherever made, in line with the civil law.

Given that it would have beenopen to Parliament to attribute to the word “gift” a meaning which coincides with the civil law and that it is arguable that this is whatParliament intended, there is no basis for striking the appellant’s plea at this stage of the proceedings. [45] Having reached the conclusion that the Tax Court judge could not strike the impugned plea, it is not necessary to address thealternative grounds advanced by the appellant in support of maintaining the relief sought in paragraph 28 of the Amended Notice ofAppeal.

[ 46 ] For these reasons, I would allow the appeals with one set of costs in the lead appeal, and giving the order which the Tax Court judge ought to have given, I would dismiss the respondent’s motion to strike, with one set of costs. “Marc Noël” Chief Justice “I agree A. F. Scott J.A.” “I agree Yves de Montigny J.A.” ANNEX I Relevant legislative provisions Income Tax Act , R.S.C. 1985 (5th Supp.), c. 1, as amended Loi de l’impôt sur le revenu , L.R.C. 1985 (5 e supp.), c. 1, telle que modifiée Deduction by individuals for gifts Crédits d’impôt pour dons 118.1

(3) For the purpose of computing the tax payable under this Part by an individual for a taxation year, there may be deducted such amount as the individual claims not exceeding the amount determined by the formula 118.1

(3) Un particulier peut déduire dans le calcul de son impôt payable en vertu de la présente

partie pour une année d’imposition un montant qui ne dépasse pas le montant calculé selon la formule suivante : (A × B) + [C × (D - B)] (A × B) + [C × (D - B)] where où : A is the appropriate percentage for the year; A représente le taux de base pour l’année; B is the lesser of $200 and the individual’s total gifts for the year; B le moins élevé de 200 $ et du total des dons du particulier pour l’année; C is the highest percentage referred to in subsection 117(2) that applies in determining tax that might be payable under this Part for the year; and C le taux le plus élevé, mentionné au paragraphe 117(2), applicable au calcul de l’impôt qui pourrait être payable en vertu de la présente

partie pour l’année; D is the individual’s total gifts for the year. D le total des dons du particulier pour l’année.

Interpretation Act , L.R.C. 1985, c. I-21, as amended Loi d’interprétation , L.R.C. 1985, c.

I-21, telle que modifiée Duality of legal traditions and application of provincial law Tradition bijuridique et application du droit provincial 8.1 Both the common law and the civil law are equally authoritative and recognized sources of the law of property and civil rights in Canada and, unless otherwise provided by law, if in interpreting an enactment it is necessary to refer to a province’s rules, principles or concepts forming part of the law of property and civil rights, reference must be made to the rules, principles and concepts in force in the province at the time the enactment is being applied. 8.1 Le droit civil et la common law font pareillement autorité et sont tous deux sources de droit en matière de propriété et de droits civils au Canada et, s’il est nécessaire de recourir à des règles, principes ou notions appartenant au domaine de la propriété et des droits civils en vue d’assurer l’application d’un texte dans une province, il faut, sauf règle de droit s’y opposant, avoir recours aux règles, principes et notions en vigueur dans cette province au moment de l’application du texte.

Terminology Terminologie 8.2 Unless otherwise provided by law, when an enactment contains both civil law and common law terminology, or terminology that has a different meaning in the civil law and the common law, the civil law terminology or meaning is to be adopted in the Province of Quebec and the common law terminology or meaning is to be adopted in the other provinces. 8.2 Sauf règle de droit s’y opposant, est entendu dans un sens compatible avec le système juridique de la province d’application le texte qui emploie à la fois des termes propres au droit civil de la province de Québec et des termes propres à la common law des autres provinces, ou qui emploie des termes qui ont un sens différent dans l’un et l’autre de ces systèmes.

Tax Court of Canada Rules (General Procedure) , SOR/90-688a, as amended Règles de la Cour canadienne de l’impôt (procédure générale) , DORS/90-688a, telles que modifiées Striking out a Pleading or other Document Radiation d’un acte de procédure ou d’un autre document 53.

(1) The Court may, on its own initiative or on application by a party, strike out or expunge all or part of a pleading or other document with or without leave to amend, on the ground that the pleading or other document 53.

(1) La Cour peut, de son propre chef ou à la demande d’une partie, radier un acte de procédure ou tout autre document ou en supprimer des passages, en tout ou en partie, avec ou sans autorisation de le modifier parce que l’acte ou le document : … […] (

d) discloses no reasonable grounds for appeal or opposing the appeal.

d) ne révèle aucun moyen raisonnable d’appel ou de contestation de l’appel.

REVISED

SCHEDULE A No. Appellant Court File No. Appeal Court File No. 1. ARNOLD, Mark 2014-3347 (IT) G A-79-15 2. BERNSTEIN, Harry 2014-3423 (IT) G A-77-15 3. BERNSTEIN Martin 2014-3422 (IT) G A-75-15 4. BERTOLACCI, Maria 2014-3588 (IT) G A-73-15 5. BERTOLACCI, Paolo 2014-3590 (IT) G A-70-15 6. BRAGANZA, Christabel G. 2014-2879 (IT) G A-68-15 7. BROWN, David 2014-3083 (IT) G A-67-15 8. CAVANAGH-WILLIAMS Suzanne 2014-2880 (IT) G A-65-15 9. CLARK, David 2014-2878 (IT) G A-92-15 10. CLARK, Elena 2014-3432 (IT) G A-96-15 11. COOK, Steve 2014-1243 (IT) G A-97-15 12. COUTURE, Daniel 2014-1384 (IT) G A-99-15 13.

ELLIS, John K. 2014-3498 (IT) G A-100-15 14. GADZIK, Theodore 2014-1242 (IT) G A-103-15 15. GOLDMAN, Barry 2014-3288 (IT) G A-104-15 16. HAMILTON, Alan J. 2014-1375 (IT) G A-105-15 17. HENNICK, Darryl 2014-3431 (IT) G A-107-15 18. HUNTER, Ronald 2014-3428 (IT) G A-106-15 19. KADEY, Moss 2014-3289 (IT) G A-108-15 20. KHUBYAR, Edna 2014-3427 (IT) G A-95-15 21. LABERGE, Sirkka 2014-2652 (IT) G A-94-15 22. LIBURDI, Joseph 2014-3346 (IT) G A-91-15 23. MacINTOSH, Ronald E. 2014-1373 (IT) G A-90-15 24. MARTEL, Jean 2014-3287 (IT) G A-84-15 25. MASON, Wesley 2014-1382 (IT) G A-83-15 26.

MATHESON, Brian 2014-1383 (IT) G A-81-15 27. McCORMICK, John 2014-1904 (IT) G A-80-15 28. McCORMICK, Mary 2014-2649 (IT) G A-78-15 29. McMILLAN, Shane 2014-1376 (IT) G A-76-15 30. PEDDIE, Melvin 2014-3424 (IT) G A-74-15 31. PEMBERTON, Arthur 2014-3348 (IT) G A-72-15 32. PITCH, Harvin 2014-3349 (IT) G A-71-15 33. PRUTIS-MISTERSKA, Krystyna 2014-2299 (IT) G A-69-16 34. RASHID, Suleiman 2014-3430 (IT) G A-66-15 35. REDMOND, Andrew 2014-1380 (IT) G A-93-15 36. RINGEL, Ian 2014-1379 (IT) G A-87-15 37. ROSS, Stephen 2014-2773 (IT) G A-88-15 38. RUSSET, James P. 2014-1378 (IT) G A-89-15 39.

SAUGSTAD, Gregory 2014-1177 (IT) G A-86-15 40. SOLWAY, Stephen H. 2014-3429 (IT) G A-85-15 41. TABAC, Ivan 2014-2651 (IT) G A-82-15 FEDERAL COURT OF APPEAL NAMES OF COUNSEL AND SOLICITORS OF RECORD DOCKET: A-102-15 STYLE OF CAUSE: GLEN FRENCH And the other appellants listed in the “Revised

Schedule A” v. HER MAJESTY THE QUEEN PLACE OF HEARING: Montréal, Quebec DATE OF HEARING: February 11, 2016 REASONS FOR JUDGMENT BY: NOËL C.J. CONCURRED IN BY: SCOTT J.A. DE MONTIGNY J.A.

DATED: february 29, 2016 APPEARANCES : Guy Du Pont Michael H. Lubetsky A. Christina Tari Leonard S. Puterman For The AppellantS Arnold Bornstein John Grant For The Respondent SOLICITORS OF RECORD : Davies Ward Phillips & Vineberg LLP Montréal, Quebec Tari Law – Tax Dispute Resolution North York, Ontario For The AppellantS William F. Pentney Deputy Attorney General of Canada For The Respondent