Canada v. Lefebvre et al., (2009) 399 N.R. 364 (FCA)

• Jurisdiction: Federal Jurisdiction (Canada)
• Court: Court of Appeal (Canada)
• Judge: Noël, Nadon and Pelletier, JJ.A.
• Citation: (2009), 399 N.R. 364 (FCA),2009 FCA 307
• Date: 24 September 2009

Can. v. Lefebvre (2009), 399 N.R. 364 (FCA)

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[French language version follows English language version]

[La version française vient à la suite de la version anglaise]

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Temp. Cite: [2009] N.R. TBEd. NO.022

Sa Majesté la Reine (appelante) v. Colette Lefebvre (intimée)

(A-460-08)

Sa Majesté la Reine (appelante) v. Jean-Pierre Desnoyers (intimé)

(A-456-08)

Sa Majesté la Reine (appelante) v. Micheline Bolduc (intimée)

(A-457-08)

Sa Majesté la Reine (appelante) v. Denise Robert Godin (intimée)

(A-458-08)

Sa Majesté la Reine (appelante) v. Linda Diamond (intimée)

(A-459-08)

Sa Majesté la Reine (appelante) v. Michèle Richard Auclair (intimée)

(A-461-08)

Sa Majesté la Reine (appelante) v. Lisette Simard Côté (intimée)

(A-462-08; 2009 FCA 307; 2009 CAF 307)

Indexed As: Canada v. Lefebvre et al.

Federal Court of Appeal

Noël, Nadon and Pelletier, JJ.A.

October 29, 2009.

Summary:

During the relevant period, the seven respondents performed various duties as pastoral agents of the Roman Catholic Church in two of its Quebec dioceses. Section 8(1)(c) of the Income Tax Act, if applicable, would allow them to deduct their housing expenses in an amount not exceeding their remuneration from their employment by the Church. The Minister of National Revenue disallowed the deduction. The respondents appealed the assessments, submitting that, as they acted under the authority of pastoral mandates conferred by a bishop, they were "regular ministers" within the meaning of s. 8(1)(c). The appeals were consolidated.

The Tax Court of Canada, in a judgment reported at 2008 TCC 395, allowed the deduction in each case. The Minister appealed.

The Federal Court of Appeal allowed the appeals, and set aside the tax court judge's decision. The judge confused status with function in finding that the respondents possessed the status of "regular ministers".

Conflict of Laws - Topic 41

Application of foreign law - General - The tax court judge allowed each of the respondents' appeals from assessments by the Minister of National Revenue, thereby allowing them, as pastoral agents of the Roman Catholic Church, to deduct their housing expenses under s. 8(1)(c) of the Income Tax Act - The tax court judge analyzed the issue of whether the respondents were "regular ministers", in light of the rules of the Church (a well established principle) - Accordingly, she referred to canon law that described the role of pastoral agents, as well as a papal document entitled "Instruction on Certain Questions Regarding the Collaboration of the Non-Ordained Faithful in the Sacred Ministry of Priest " - The Federal Court of Appeal noted that the canon law to which the tax court judge referred "must, as foreign law relevant to the disposition of the case, be proven by expert evidence before it can be considered" - However, since the parties raised no objections, the court concluded that they accepted that the canon law on which the judge based her decision "faithfully reflects the applicable law and must be taken as proven" - See paragraphs 10, 21.

Income Tax - Topic 589

Income from office or employment - Deductions - Clergy's residence - Section 8(1)(c) of the Income Tax Act would allow "a member of the clergy or of a religious order or a regular minister" to deduct housing expenses - The term "regular minister" was not defined in the Act - The tax court judge allowed each of the respondents' appeals from assessments by the Minister of National Revenue, thereby allowing them, as pastoral agents of the Roman Catholic Church, to deduct their housing expenses - The judge found that the respondents were "regular ministers", on the rationale that, without the ministry of lay persons, the Church would be unable to go on - The Federal Court of Appeal agreed with the Minister's submission that the judge confused the respondents' status with the functions they exercised, thereby committing an error of law - It was status, rather than function, that served to determine whether a person was a "regular minister" - Section 8(1)(c) set out a status requirement (s. 8(1)(c)(i)), and a function requirement (s. 8(1)(c)(ii)) - Only the respondents' status was being challenged in these appeals - See paragraphs 22, 24 to 30.

Income Tax - Topic 589

Income from office or employment - Deductions - Clergy's residence - The Federal Court of Appeal discussed the historical debate in the House of Commons with respect to the adoption (in 1956) of the function requirement set out in s. 8(1)(c)(ii) of the Income Tax Act, to better understand Parliament's intention with respect to the section as a whole - "In its initial version introduced in 1949, [s.] 8(1)(c) contained no function requirements. Seven years later, following a judgment in which the deduction was granted to a minister of the United Church of Canada whose sole occupation was teaching ... the then Finance Minister proposed that the right to the deduction be limited to persons who, in addition to having the required status [s. 8(1)(c)(i)], fulfilled the functions described at [s.] 8(1)(c)(ii) of the Act" - See paragraph 23.

Income Tax - Topic 589

Income from office or employment - Deductions - Clergy's residence - The respondents, pastoral agents of the Roman Catholic Church, appealed from assessments by the Minister of National Revenue, disallowing them to deduct their housing expenses as regular ministers under s. 8(1)(c) of the Income Tax Act - Although the term "regular minister" was not defined, there was case law which gave meaning to those words - Pereira v. Canada (2006 T.C.C.) had concluded that performing most of the duties of a "regular minister" under a temporary liturgical mandate was insufficient to make a pastoral agent a regular minister - The tax court judge suggested that inconsistent judgments had been issued by her court, and that the more extensive evidence presented to her in this case justified a finding opposite to Pereira - The Federal Court of Appeal took a closer look at the inconsistency identified by the judge and concluded that she erred in refusing to follow Pereira, where, as here, the only doubt was as to status, not function - "In canon law, the distinction between ordained ministers and lay faithful (among whom pastoral agents are recruited) remains as fundamental today as it has always been" - See paragraphs 31 to 39.

Statutes - Topic 1644

Interpretation - Extrinsic aids - Legislative history - Legislative debates - [See second Income Tax - Topic 589 ].

Words and Phrases

Regular ministers - The Federal Court of Appeal considered the meaning of the phrase "regular ministers" within the meaning of s. 8(1)(c) of the Income Tax Act, R.S.C. 1985 (5th Supp.), c. 1.

Cases Noticed:

Noseworthy v. Canada, [1999] T.C.J. No. 209, refd to. [para. 11].

Kolot v. Canada, [1992] T.C.J. No. 673, refd to. [para. 11].

Pereira v. Canada, 2006 TCC 300, refd to. [para. 11].

Hardy v. Canada, [1997] T.C.J. No. 1191, refd to. [para. 11].

Côté v. Québec (Sous-ministre du Revenu), 2008 QCCQ 12517, refd to. [para. 16].

Rivard v. Québec (Sous-ministre du Revenu), 2009 QCCQ 1399, refd to. [para. 16].

Housen v. Nikolaisen et al., [2002] 2 S.C.R. 235; 286 N.R. 1; 219 Sask.R. 1; 272 W.A.C. 1; 2002 SCC 33, refd to. [para. 20].

New Brunswick (Board of Management) v. Dunsmuir, [2008] 1 S.C.R. 190; 372 N.R. 1; 329 N.B.R.(2d) 1; 844 A.P.R. 1; 2008 SCC 9, refd to. [para. 20].

Fabrique de la paroisse de L'Ange-Gardien v. Québec (Procureur général), [1980] C.S. 175 (Que.), refd to. [para. 21].

Guthrie v. Minister of National Revenue (1955), 55 D.T.C. 605 (T.A.B.), refd to. [para. 23].

Saltmarsh v. Adair, [1942] S.C.(J.C.) 58 (Scot. H.C. of Just.), refd to. [para. 25].

Walsh v. Lord Advocate, [1956] 3 All E.R. 129 (C.L.), refd to. [para. 27].

Statutes Noticed:

Income Tax Act, R.S.C. 1985 (5th Supp.), c. 1, sect. 8(1)(c) [para. 4].

Authors and Works Noticed:

Asselin, Anne, Les laïcs au service de leur Église, Le point actual du travail, generally [para. 42].

Borras, Alphonse, À propos des ministères, L'articulation des ministères: de la théologie à la lettre de mission, generally [para. 43].

Canada, Hansard, House of Commons Debates, vol. 5 (1956), p. 6775 [para. 23].

Hansard - see Canada, Hansard, House of Commons Debates.

Counsel:

Benoit Mandeville, for the appellant;

Monique Rhéaume, for the respondent.

Solicitors of Record:

John H. Sims, Q.C., Deputy Attorney General of Canada, Ottawa, Ontario, for the appellant.

These seven appeals (consolidated) were heard at Montréal, Quebec, on September 24, 2009, by Noël, Nadon and Pelletier, JJ.A., of the Federal Court of Appeal. Noël, J.A., delivered the following judgment and reasons for judgment of the Court, at Ottawa, Ontario, on October 29, 2009.