Canada v. Zelinski (1999)

Date: 19991210

Docket: A-742-96

A-743-96

A-744-96

CORAM: STONE J.A. ISAAC J.A.

SEXTON J.A.

BETWEEN:

HER MAJESTY THE QUEEN

Appellant,

- and -

ROBERT E. ZELINSKI, KEN A.

WHENT and NICHOLAS J. PUSTINA

Respondents.

Heard at Toronto, Ontario, Monday & Tuesday, November 15 and 16, 1999.

Judgment rendered at Ottawa, Ontario, on Friday, December 10, 1999.

REASONS FOR JUDGMENT BY: SEXTON J.A.

CONCURRED IN BY: STONE J.A.

ISAAC J.A.

Date: 19991210

Docket: A-742-96

A-743-96

A-744-96

CORAM: STONE J.A. ISAAC J.A.

SEXTON J.A.

BETWEEN:

HER MAJESTY THE QUEEN

Appellant,

- and -

ROBERT E. ZELINSKI, KEN A.

WHENT and NICHOLAS J. PUSTINA

Respondents.

REASONS FOR JUDGMENT

SEXTON J.A.

INTRODUCTION

[1] When the Government of Canada introduced the Cultural Property Export and Import Act to Parliament, it announced that "various tax incentives to encourage gifts and the sale of national treasures to appropriate custodial institutions" 1 would be required "in order to encourage the movement of national treasures into those institutions best able to preserve them." 2 The Government explained that the tax incentives "are central to the operation of the whole scheme." 3 Three lawyers enthusiastically embraced the message. They donated approximately 215 paintings of a famous native artist, Norval Morrisseau, to public art galleries in Ontario. These donations meant that this truly Canadian art would be preserved and be accessible for average Canadians. It also meant that the lawyers would reap large tax savings. Although they had only paid $129,350 for the paintings, they had them appraised for almost $1 million. The lawyers deducted the larger amount from their professional income. The Canadian Government disagreed.

[2] The Minister of National Revenue (the "Minister") reassessed the taxpayers" returns. At trial, he argued that they were not exempt from any gain they might have made on the deeme...

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