Coopérative fédérée de Québec v. Ministre du Revenu national, (1995) 96 F.T.R. 257 (TD)

• Judge: Pinard, J.
• Court: Federal Court (Canada)
• Case Date: June 06, 1995
• Jurisdiction: Canada (Federal)
• Citations: (1995), 96 F.T.R. 257 (TD)

Co-op fédérée de Qué. v. MNR (1995), 96 F.T.R. 257 (TD)

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Dans l'affaire de la Loi de l'impôt sur le revenu

Coopérative fédérée de Québec (demanderesse) v. Sa Majesté la Reine (défenderesse)

(T-3460-90, T-3461-90)

Indexed As: Coopérative fédérée de Québec v. Ministre du Revenu national

Federal Court of Canada

Trial Division

Pinard, J.

June 6, 1995.

Summary:

Coopérative fédérée claimed an inventory allowance for cheese it had on hand on the first day of six consecutive taxation years. The Minister disallowed the claim. Coopéra­tive fédérée appealed.

The Tax Court of Canada dismissed the appeal. Coopérative fédérée appealed again.

The Federal Court of Canada, Trial Divi­sion, dismissed the appeals.

Income Tax - Topic 1145

Income from a business or property - Deductions - Inventory allowance - Income Tax Act, s. 20(1)(gg) - Coopé­rative fédérée acquired cheese for resale to wholesalers and stored it on their behalf - The cheese was aged and classified - The wholesalers then received a written monthly confirmation of the precise quan­tity of cheese manufactured, retained, classified and stored on their behalf during the preceding month - The wholesalers were invoiced upon delivery of the cheese - Coopérative fédérée claimed an inven­tory allowance for cheese it had on hand on the first day of the relevant taxation years - The Federal Court of Canada, Trial Division, affirmed the disallowance of the claim because ownership of the subject cheese had been transferred to the whole­salers when the monthly confirmation was delivered.

Quebec Nominate Contracts - Topic 3052

Sale - Title and transfer of ownership - When transfer occurs - Coopérative fé­dérée acquired cheese for resale to whole­salers and stored it on their behalf - The cheese was aged and classified - The wholesalers then received a written monthly confirmation of the precise quan­tity of cheese manufactured, retained, classified and stored on their behalf during the preceding month - The wholesalers were invoiced upon delivery of the cheese - The Federal Court of Canada, Trial Division, held that the resale of the cheese was a sale "by weight, number or measure" and that transfer of ownership occurred when the wholesalers received the monthly written confirmation individualiz­ing the cheese attributed to each - See paragraphs 13 to 22.

Cases Noticed:

Saskatchewan Wheat Pool v. Canada, [1985] 1 C.T.C. 31; 56 N.R. 149 (F.C.A.), consd. [para. 4].

Burrard Yarrows Corp. v. Minister of National Revenue, [1986] 2 C.T.C. 313; 5 F.T.R. 101 (T.D.), affd. [1988] 2 C.T.C. 90 (F.C.A.), refd to. [para. 6].

Dresden Farm Equipment Ltd. v. Minister of National Revenue (1989), 2 F.T.R. 92; 89 D.T.C. 5019 (T.D.), refd to. [para. 7].

Statutes Noticed:

Civil Code of Lower Canada, art. 1059 [para. 24]; art. 1474 [para. 18].

Food and Drugs Act Regulations (Can.), Food and Drug Regulations, C.R.C. 1978, c. 870, sect. B.08.044, sect. B.08.045 [para. 24].

Income Tax Act, S.C. 1970-71-72, c. 63, sect. 10(1), sect. 10(2), sect. 20(1)(gg), sect. 248(1) [para. 3].

Reform of the Civil Code, Act respecting the implementation of the, L.Q. 1992, c. 57, sect. 9 [para. 13].

Authors and Works Noticed:

Baudouin, Jean-Louis, Les obligations, p. 280 [para. 20].

Pourcelet, Michel, La vente, 5 e éd., pp. 5 [para. 15]; 80 [para. 17]; 87 [para. 19]; 89 [para. 16].

Counsel:

Serge Gloutnay, for the plaintiff;

Henri Bédirian, for the defendant.

Solicitors of Record:

Desjardins Ducharme Stein Monast, s.e.n.c., Montreal, Quebec, for the plain­tiff;

Deputy Attorney General of Canada, Montreal, Quebec, for the defendant.

These appeals were heard at Montreal, Quebec, on May 23 and 24, 1995, by Pinard, J., of the Federal Court of Canada, Trial Divi­sion, who delivered the following deci­sion at Ottawa, Ontario, on June 6, 1995.