Christian Boutin

These consolidated tax-planning appeals concerned errors in transactional documents that failed to reflect the parties’ common contractual intentions under Quebec civil law.

The Court held that, where parties mutually recognize drafting or implementation errors and amend their acts to align with their true agreement, courts may interpret and recognize those amendments under art. 1425 C.C.Q. The Court emphasized the distinction between exchange of consents and written expression, and rejected any acquired right of tax authorities to benefit from contractual errors once corrected by mutual consent, subject to third-party rights.

It also clarified that civil courts in such proceedings do not adjudicate the validity of tax assessments, which remain for competent tax forums.

The appeals were dismissed with costs throughout.

In a tax enforcement appeal, the Court considered whether a statutory requirement to pay issued to a bank lost priority after the tax debtor later filed a notice of proposal under federal insolvency legislation.

The Court endorsed the Federal Court of Appeal's reasoning that the subsequent insolvency filing did not displace the earlier requirement to pay under the tax statute.

The appeal was dismissed.

No costs were awarded.