Canada v. Marchessault, 2007 CAF 345 (2007)

Extract

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Canada v. Marchessault, 2007 CAF 345 (2007)

Date: 20071102

Docket: A-419-06

Citation: 2007 FCA 345

CORAM: LÉTOURNEAU J.A.

PELLETIER J.A.

TRUDEL J.A.

BETWEEN:

HER MAJESTY THE QUEEN

Appellant

and

JACQUES MARCHESSAULT

Respondent

Hearing held at Montréal, Quebec on October 11, 2007 .

Judgment rendered at Ottawa, Ontario on November 2, 2007 .

REASONS FOR JUDGMENT: TRUDEL J.A.

CONCURRED IN BY: LÉTOURNEAU J.A.

PELLETIER J.A.

Date: 20071102

Docket: A-419-06

Citation: 2007 FCA 345

CORAM : LÉTOURNEAU J.A.

PELLETIER J.A.

TRUDEL J.A.

BETWEEN:

HER MAJESTY THE QUEEN

Appellant

and

JACQUES MARCHESSAULT

Respondent

REASONS FOR JUDGMENT

TRUDEL J.A.

[1] Does paragraph 128(2)( d ) of the Income Tax Act , R.S.C. 1985 (5th Supp.) c. 1 (the Act), which provides that a current taxation year shall be deemed to end on the day immediately before an individual became a bankrupt, also apply to a proposal made pursuant to sections 50 et seq. of the Bankruptcy and Insolvency Act , R.S.C. 1985, c. B-3 (BIA)? That is the point at issue.

[2] For the reasons that follow, I propose to give this question a negative answer.

FACTS AND PROCEDURE

[3] On May 20, 2003 Mr. Marchessault made a proposal to his creditors which was accepted by them and then ratified by the Court in a judgment of July 10, 2003.

[4] This proposal provided that a dividend of 100 cents on the dollar would be paid to ordinary creditors, the final and fifth payment being due in June 2008. Those creditors included the Canada Customs and Revenue Agency (CCRA), which proved its claim in the amount of $25,287.36.

[5] Relying on paragraph 128(2)( d ) of the Act, the respondent sent the CCRA two returns for the 2003 taxation year, one taking his pre-proposal income into account and the other his post-proposal income.

[6] The text of paragraph 128(2)( d ) of the Act ...

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