Pierre Boyer

The appellants challenged municipal real estate and business tax assessments imposed after public hospital laundries were consolidated into a non-profit community laundry structure overseen by a regional council.

Applying the ordinary and teleological rules of tax interpretation, the Court held that tax exemptions are not automatically subject to strict construction and that substance may prevail over form where consistent with legislative purpose.

Although the appellants were not direct alter egos of the public establishments because the requisite control element was absent, the Court found an almost complete identity of patrimony between them and the member institutions.

The community laundry and the regional council were therefore entitled to the relevant exemptions under the municipal taxation statute, except that the regional council's 1987 claim was prescribed under the one-year limitation period.

The respondent brought an incidental action in warranty against the appellant, a U.S. company with no domicile or place of business in Quebec, based on a contract for the manufacture of glass units.

The appellant filed a declinatory exception, arguing that Quebec courts lacked jurisdiction.

The Superior Court and the Court of Appeal dismissed the exception.

The Supreme Court of Canada dismissed the appeal, holding that under article 71 of the Code of Civil Procedure, an incidental action in warranty must be taken before the court in which the principal action is pending, and this rule of domestic territorial jurisdiction extends to international situations.