Date: 20030204
Docket: ITA-691-02
Neutral Citation: 2003 FCT 122
IN THE MATTER OF THE INCOME TAX ACT
- and -
IN THE MATTER OF AN ASSESSMENT OR ASSESSMENTS
ESTABLISHED BY THE MINISTER OF NATIONAL REVENUE
UNDER ONE OR MORE OF THE FOLLOWING ACTS:
THE INCOME TAX ACT, THE CANADA PENSION PLAN,
THE EMPLOYMENT INSURANCE ACT
AGAINST
THE ESTATE OF THE LATE LAWRENCE CORRIVEAU
Judgment debtor
and
BENOÎT PROULX
Garnishee
REASONS FOR ORDER
RICHARD MORNEAU, PROTHONOTARY:
[1] This is a motion by the judgment creditor, Her Majesty the Queen, for the purposes of obtaining a garnishee order absolute against the garnishee, Benoît Proulx.
Principal context
[2] It appears that the judgment debtor is the creditor of the garnishee for out-of-court fees and disbursements payable to the estate of his lawyer, the late Lawrence Corriveau, carrying on business under the name of Corriveau, Avocats and/or Corriveau et associés, for services rendered in the context of an action for damages brought against the Attorney General of Quebec in docket number 200-05-000709-936 which the garnishee won by final decision of the Supreme Court of Canada on October 18, 2001.
[3] On October 18, 2001, the Supreme Court restored the judgment of the Superior Court concerning the liability of the provincial Crown and the damages awarded by Letarte J., which amounted to the sum of $1,154,747.86, plus interest and additional compensation from the institution of the proceedings.
[4] The garnishee consequently received about $2,126,196.55 from the provincial Crown as damages and interest.
[5] In view of the tax indebtedness of the late Mr. Lawrence Corriveau, an indebtedness that is technically payable by the judgment debtor, and in view of the sums owing by the garnishee to the judgment debtor as fees, a garnishee order to show cause was issued on March 25, 2002, by which it was ordered that all sums due or becoming due by the garnishee to the judgment debtor, including in particular 30 per cent of the amount received by the garnishee from the Government of Quebec, be garnished in response to the certificates dated December 22, 1994, and January 17, 2002, filed against the judgment debtor by Her Majesty the Queen in right of Canada on the sum of $473,951.31.
[6] It appears that since then some interest has been added to the $473,951.31 and that a payment of $44,661.25 has been applied to the account since March 25, 2002. The balance of the tax owing now amounts to $456,327.36.
Analysis
[7] It is apparently not disputed that the judgment creditor is justified in wishing to garnish the fees owed by the garnishee to the judgment debtor.
[8] The difficulty lies in the amount that the judgment creditor may claim from the garnishee.
[9] The judgment creditor argues that it is entitled to garnish 30% of the sums received by the garnishee from the Attorney General of Quebec, pursuant to a fees agreement executed on August 6, 1997, between the garnishee and his solicitor (the 30% agreement).
[10] The garnishee, for his part, argues that he is only liable to the judgment debtor for a sum representing 10% of what he received from the Attorney General of Quebec less some fees paid to Mr. Christian Trépanier ($22,630.07), who acted as senior counsel, pursuant to a fees agreement dated on its face March 20, 1993, but which the garnishee testifies was actually executed in March 1999 (the 10% agreement).
[11] The language of both agreements is similar except that, as mentioned previously, the one dated on its face March 20, 1993, is for 10% of the fees while the one dated August 6, 1997, covers 30% of the fees.
[12] Here is the text of the latter agreement:
[translation]
FEES AGREEMENT
BETWEEN: MR. LAWRENCE CORRIVEAU, Q.C.
AND: BENOÎT PROULX
This agreement reproduces the content of the agreement made at the commencement of this case between Mr. Lawrence Corriveau Q.C. and Mr. Benoît Proulx concerning the terms and conditions of professional fees.
It was agreed that Mr. Benoît Proulx instructed Mr. Lawrence Corriveau to initiate proceedings in damages and claim against the Attorney General. For the purpose of carrying out these instructions, Mr. Benoît Proulx agreed to give Mr. Lawrence Corriveau an amount equivalent to 30% of any sum of money that will be obtained.
Mr. Lawrence Corriveau further agreed to assume directly from the 30% all relevant fees and disbursements.
AND THE PARTIES HAVE SIGNED, DATED AUGUST 6, 1997, AT QUÉBEC.
(signed)
LAWRENCE CORRIVEAU, Q.C.
(signed)
BENOÎT PROULX
[13] Article 2863 of the Civil Code of Québec (the C.C.Q.) provides that the parties to a juridical act set forth in a writing may not contradict or vary the terms of the writing by testimony unless there is a commencement of proof.
[14] In this case, it appears to me beyond dispute that the garnishee is attempting by his testimony to contradict or vary the terms of the agreement that bears clearly and unambiguously the date of March 20, 1993, i.e. the 10% agreement which, judging from this date of 1993, was the first agreement to have been signed.
[15] Article 2865 of the C.C.Q. provides as follows:
A commencement of proof may arise where an admission or writing of the adverse party, his testimony or the production of a material thing gives an indication that the alleged fact may have occurred.
[Emphasis added]
[16] The annotation G.P. (introduced by the coming into force of the Regulation respecting the Application of the Act respecting the legal publicity of sole proprietorships, partnerships and legal persons, on January 1, 1994), which appears on the letterhead paper used for the 10% fees agreement, cannot itself constitute a commencement of proof giving an indication that the alleged fact may have occurred, i.e. that the said agreement was executed not in 1993 but rather in 1999.
[17] I in fact agree with the judgment creditor that even if the annotation gives an indication that the said 10% agreement was in fact executed after January 1, 1994, it does not necessarily indicate that it may have been executed subsequent to the 30% agreement, i.e. after August 6, 1997.
[18] Since, under article 2865 of the C.C.Q., the G.P. annotation does not give an indication that the alleged fact, that the 10% agreement was executed in 1999 and not in 1993, may have occurred, we cannot go within the very parameters of article 2863 of the C.C.Q. and weigh the testimony of the garnishee.
[19] Now, the garnishee argues that he never received any invoice from the judgment debtor and that consequently he owes nothing to it.
[20] The judgment creditor argues that the fees agreements suffice in themselves to create an obligation to pay in the garnishee.
[21] As mentioned earlier, the fees agreements provide that the garnishee agrees to give Mr. Lawrence Corriveau a certain percentage (10% or 30% depending on the agreement) of any money that is obtained.
[22] I agree with the submission that for the purposes of the judgment creditor, the implementation itself of the term by which the garnishee was receiving money sufficed to create an obligation to pay the late Lawrence Corriveau (see articles 1497, 1506 and 1507 of the C.C.Q.). The invoicing may be a significant factor between a solicitor and his client for the purpose of setting in motion the possible mediation and arbitration procedures. However I do not believe that this need for invoicing affects the situation from the standpoint of the judgment creditor.
[23] Consequently, for present purposes, once the garnishee received some money in the context of the litigation between him and the Attorney General of Quebec, he had an obligation to give a percentage of that money to Lawrence Corriveau.
[24] On the other hand, the garnishee contends that the fees of Mr. Christian Trépanier should be deducted from the fees payable to the judgment debtor, irrespective of either agreement.
[25] But there is no support for this thesis in either of the fees agreements in evidence. Furthermore, this conclusion cannot reasonably be drawn from anything in the evidence.
[26] Moreover, I do not share the opinion of the garnishee's counsel that to implement the 30% agreement would tend to give the legal profession the character of a market-driven, profit-oriented undertaking since fees equivalent to 30% of the sum received by the garnishee would be disproportionate to the services rendered. Nothing conclusive was put in evidence in this regard.
[27] For the preceding reasons, I consider that the judgment creditor is entitled to garnish 30% of the sum that the garnishee received from the Attorney General of Quebec, since the most recent of the written fees agreements on its face, the one dated 1997, executed by the garnishee and the late Lawrence Corriveau, is the one providing for the 30% fees.
[28] A garnishee order absolute will therefore be issued in this regard, in accordance with the draft order submitted by counsel for the judgment creditor.
[29] In view of the preceding reasons, I need not consider the additional problem raised by the actual date of the 10% agreement, that is, the first agreement dated March 20, 1993. Since this date precedes the coming into force on January 1, 1994, of the C.C.Q., section 141 of the Act respecting the implementation of the reform of the Civil Code, S.Q. 1992, c. 57, could make article 1234 of the Civil Code of Lower Canada applicable to the dynamics of this situation.
"Richard Morneau"
Prothonotary
Montréal, Quebec
February 4, 2003
Certified true translation
Suzanne M. Gauthier, C. Tr., LL.L.
FEDERAL COURT OF CANADA
TRIAL DIVISION
Date: 20030204
Docket: ITA-691-02
IN THE MATTER OF THE INCOME TAX ACT
- and -
IN THE MATTER OF AN ASSESSMENT OR ASSESSMENTS ESTABLISHED BY THE MINISTER OF NATIONAL REVENUE
UNDER ONE OR MORE OF THE FOLLOWING ACTS: THE INCOME TAX ACT, THE CANADA PENSION PLAN, THE EMPLOYMENT INSURANCE ACT
AGAINST
THE ESTATE OF THE LATE LAWRENCE CORRIVEAU
Judgment debtor
and
BENOÎT PROULX
Garnishee
REASONS FOR ORDER
FEDERAL COURT OF CANADA
TRIAL DIVISION
NAMES OF COUNSEL AND SOLICITORS OF RECORD
DOCKET NO: ITA-691-02
STYLE: IN THE MATTER OF AN ASSESSMENT OR ASSESSMENTS ESTABLISHED BY THE MINISTER OF NATIONAL REVENUE UNDER ONE OR MORE OF THE FOLLOWING ACTS: THE INCOME TAX ACT, THE CANADA PENSION PLAN, THE EMPLOYMENT INSURANCE ACT
AGAINST
THE ESTATE OF THE LATE LAWRENCE CORRIVEAU
and
BENOÎT PROULX
PLACE OF HEARING: Montréal, Quebec
DATE OF HEARING: January 20, 2003
REASONS FOR ORDER OF MR. RICHARD MORNEAU, PROTHONOTARY
DATED: February 4, 2003
APPEARANCES:
Nadine Dupuis for the judgment creditor
Pierre Fournier for the garnishee
SOLICITORS OF RECORD:
Morris Rosenberg for the judgment creditor
Deputy Attorney General of Canada
William Noonan for the judgment debtor
Sillery, Quebec
Fournier et Associés for the garnishee
Montréal, Quebec