September 08, 2017
Savard, Marcotte, Schrager
Application for leave to appeal and appeal from a judgment of the Court of Quebec granting an application to strike out paragraphs of an originating application appealing from a tax assessment. Application for leave to appeal allowed; appeal dismissed.
Following a tax audit, the Agence du Revenu du Québec (ARQ) issued notices of assessment to the appellant for the years 2010 to 2012. In his originating application appealing from the tax assessments, he claimed to be entitled to a reversal of the burden of proof as a procedural remedy because of the “reasonable apprehension of bias” arising from the compensation scheme applicable to the ARQ’s auditors, which provides a bonus or benefit in the event of recovery. The trial judge ordered the striking out of these allegations. She found, inter alia, that the evidence concerning the bonus scheme was not relevant on its own because the Court of Quebec sitting in appeal of a notice of assessment does not have jurisdiction to rule on whether or not the respondent committed a fault. The appellant seeks leave to appeal from the striking-out order.
The ends of justice require that leave to appeal be granted. The judgment goes beyond mere case management measures and decides the issue in part. It directly addresses the argument the appellant intends to make concerning the reversal of the burden of proof as a result of the fear of bias arising from the compensation scheme applicable to ARQ employees. Moreover, the question is new. Nevertheless, on its merits, the appeal must be dismissed. Although the Court has reservations in regard to the scope of the judge’s comments on the lack of jurisdiction of the Court of Quebec on the issues raised in the paragraphs that were struck out, she did not err in finding that evidence regarding the bonus system was insufficient on its own to reverse the burden of proof. The appellant may discharge his burden of proof by presenting prima facie evidence that the assessments are inaccurate. Once this step is completed, the presumption of validity of the assessments is set aside and the tax authority has the burden of establishing the accuracy of the facts on which it relies. The judge did not err in stating that the appellant’s burden cannot be discharged based solely on the evidence of a bonus scheme related to tax audits. Such evidence does not establish that the facts on which the ARQ relies to issue its assessments are inaccurate and does not therefore constitute prima facie evidence of their inaccuracy.
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