Canada (National Revenue) v. Laquerre

Canada (National Revenue) v. Laquerre

The Court concluded on the evidence that Laquerre exercised control, personally used and mingled corporate and trust assets, and employed schemes to divert sale proceeds to avoid tax liabilities, constituting dissembling of fraud/contravention of public order under art.317 C.C.Q.; accordingly the corporate veil was lifted and, because registered certificates under s.223 are equivalent to judgment and rule 459 permits making an interim charge absolute, the motion for a charging order absolute was granted and not premature.

Citation
2008 FC 460
Parties
Judgment Creditor/applicant: Her Majesty the Queen in Right of Canada; Respondent: Mario Laquerre; Respondent: Fiducie Mario Laquerre; Respondent: Fiducie ML; Respondent: Fiducie MJ; Respondent: 9075-3153 Québec Inc.; Respondent: 9015-7769 Québec Inc.; Respondent: 9067-6388 Québec Inc.; Respondent: 9029-0065 Québec Inc.; Respondent: 9122-9831 Québec Inc.; Third Party: 9011-1345 Québec Inc.
Court
Federal Court
Jurisdiction
Canada
Judgment Date
9 April 2008
Procedural Posture
Income Tax Act Assessments and Collection (jeopardy Collection / Charging Order) / Motion for Charging Order Absolute Under Rule 459 (show Cause Hearing)
Outcome
Motion granted; charging order absolute made; costs awarded to the applicant.
Legal Topics
Charging Order, Lifting the Corporate Veil, Jeopardy Collection Order, Tax Assessment Enforcement, Alter Ego, Rule 459 Federal Courts Rules
Source Language
English
Tax Law Civil Procedure Corporate Law Property Law Trusts and Estates Charging Order Lifting the Corporate Veil Jeopardy Collection Order +3 more

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Parties

Her Majesty the Queen in Right of Canada

Judgment Creditor/applicant

Mario Laquerre

Respondent

Fiducie Mario Laquerre

Respondent

Fiducie ML

Respondent

Fiducie MJ

Respondent

9075-3153 Québec Inc.

Respondent

9015-7769 Québec Inc.

Respondent

9067-6388 Québec Inc.

Respondent

9029-0065 Québec Inc.

Respondent

9122-9831 Québec Inc.

Respondent

9011-1345 Québec Inc.

Third Party

Procedural Posture

Income Tax Act Assessments and Collection (jeopardy Collection / Charging Order) / Motion for Charging Order Absolute Under Rule 459 (show Cause Hearing)

Legal Issues

  1. 1 Whether a charging order absolute under rule 459 is premature while Tax Court appeals are pending
  2. 2 Whether the corporate veil should be lifted to treat multiple entities as one patrimony (alter ego)
  3. 3 Whether non-payment of tax debts constitutes contravention of public order justifying disregard of separate legal personality

Ratio Decidendi

The Court concluded on the evidence that Laquerre exercised control, personally used and mingled corporate and trust assets, and employed schemes to divert sale proceeds to avoid tax liabilities, constituting dissembling of fraud/contravention of public order under art.317 C.C.Q.; accordingly the corporate veil was lifted and, because registered certificates under s.223 are equivalent to judgment and rule 459 permits making an interim charge absolute, the motion for a charging order absolute was granted and not premature.

Court Disposition

Motion granted; charging order absolute made; costs awarded to the applicant.

Orders

  • Motion for a charging order absolute is granted with costs.
  • An absolute charge is made pursuant to rule 459 of the Federal Courts Rules against the immovables described in schedules 1 to 6 attached to the order.