Canada (National Revenue) v. Lachapelle

Canada (National Revenue) v. Lachapelle

On the evidence as a whole the Court found that Her Majesty had completed the burden of proof to establish, at least on the prima facie record and considering the weight to be assigned to hearsay affidavits and cross-examination, that Animation JL Inc. functioned as an instrument/nominee/alter ego of Pierre Lachapelle; accordingly the Interim Garnishment Order was confirmed and converted into a Final Garnishment Order garnishing the specified sums and authorizing realization of shares to satisfy the tax certificate.

Citation
2007 FC 1161
Parties
Judgment Creditor: Her Majesty the Queen; Judgment Debtor: Pierre Lachapelle; Garnishee: B.M.T. 06 Capital Corporation (Bull Market Trading); Garnishee: TD Waterhouse Canada Inc.; Mis En Cause: Animation JL Inc.
Court
Federal Court
Jurisdiction
Canada
Judgment Date
9 November 2007
Procedural Posture
Income Tax Act Garnishment Proceeding / Final Garnishment Order Motion/hearing
Outcome
Final Garnishment Order granted in favour of Her Majesty the Queen
Legal Topics
Final Garnishment Order, Alter Ego/nominee Doctrine, Fraudulent Conveyance/simulation, Admissibility and Weight of Hearsay, Burden of Proof on Garnishment
Source Language
English
Tax Law Civil Procedure Corporate Law Trusts and Nominees Final Garnishment Order Alter Ego/nominee Doctrine Fraudulent Conveyance/simulation Admissibility and Weight of Hearsay +1 more

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Parties

Her Majesty the Queen

Judgment Creditor

Pierre Lachapelle

Judgment Debtor

B.M.T. 06 Capital Corporation (Bull Market Trading)

Garnishee

TD Waterhouse Canada Inc.

Garnishee

Animation JL Inc.

Mis En Cause

Procedural Posture

Income Tax Act Garnishment Proceeding / Final Garnishment Order Motion/hearing

Legal Issues

  1. 1 Whether the $287,419.75 held by the garnishee belongs to the judgment debtor or to Animation JL Inc.
  2. 2 Whether Animation JL Inc. is a nominee/alter ego/instrument of Pierre Lachapelle used to shield assets
  3. 3 Whether hearsay evidence and affidavits on motion are admissible and what weight to assign them

Ratio Decidendi

On the evidence as a whole the Court found that Her Majesty had completed the burden of proof to establish, at least on the prima facie record and considering the weight to be assigned to hearsay affidavits and cross-examination, that Animation JL Inc. functioned as an instrument/nominee/alter ego of Pierre Lachapelle; accordingly the Interim Garnishment Order was confirmed and converted into a Final Garnishment Order garnishing the specified sums and authorizing realization of shares to satisfy the tax certificate.

Court Disposition

Final Garnishment Order granted in favour of Her Majesty the Queen

Orders

  • All sums due or to become due by B.M.T. 06 Capital Corporation and TD Waterhouse Canada Inc. to Pierre Lachapelle and/or Animation JL Inc., including but not limited to $287,419.75 held in portfolio AJL190110, are garnished to satisfy the tax certificate filed March 13, 2006
  • The garnishees are ordered to pay to Her Majesty the Queen in Right of Canada the amounts described in the garnishment order and/or realize the proceeds of the shares held by Pierre Lachapelle in Animation JL Inc. and pay those proceeds to Her Majesty up to the limit of the tax liability attested in the Certificate