Date: 20040224
Docket: ITA-32-02
Citation: 2004 FC 278
In the matter of the Income Tax Act,
- and -
In the matter of an assessment or assessments established by the Minister of National Revenue under one or more of the following statutes: the Income Tax Act, the Canada Pension Plan and the Employment Insurance Act,
AGAINST:
HENRI BERTRAND
Judgment Debtor
and
ROMÉO HÉBERT
Garnishee
REASONS FOR ORDER
RICHARD MORNEAU, PROTHONOTARY
[1] This is a motion by the judgment creditor under subparagraph 449(1)(a)(ii) of the Federal Court Rules, 1998 (the Rules) for a garnishee order absolute in respect of any debt that is owing or accruing to the judgment debtor by the garnishee, Roméo Hébert, and more particularly but without limiting the generality of the foregoing, under a promissory note of US$38,000 taken out by the garnishee in favour of the judgment debtor on November 12, 1996, at Saint-Sauveur, Quebec (the note).
Context
[2] The judgment creditor in this case obtained from this Court, on January 3, 2002, a certificate issued pursuant to section 223 of the Income Tax Act, R.S.C 1985, c. 1 (5th Supp.), as amended, attesting that Henri Bertrand (the judgment debtor in this case) was indebted to the judgment creditor in the amount of $1,027,767.66, plus interest compounded daily from January 4, 2002, to the day of payment.
[3] Henri Bertrand was investigated by the Royal Canadian Mounted Police (the RCMP) in a matter involving proceeds of crime related to a case of importation of narcotics.
[4] In the course of its investigation, the RCMP seized property belonging to Henri Bertrand.
[5] One such property was the promissory note. By this note Roméo Hébert (the garnishee in this case, as mentioned previously) acknowledged owing Henri Bertrand a sum of US$38,000 bearing interest at the rate of 10% annually. This note was payable on demand, but no later than November 12, 1997. The parties agree that under article 2925 of the Civil Code of Québec, the prescription date of the note was November 13, 1999, unless it can be established that there is in the record sufficient evidence of interruption of the prescription or a new acknowledgement of the debt once the prescription was acquired.
[6] The outcome of this case revolves around these prescription issues.
[7] On March 26, 2002, the judgment creditor sent Roméo Hébert a letter for the purpose of claiming from him the amount owing on the note.
[8] It appears that following receipt of the letter dated March 26, 2002, Roméo Hébert instructed an American solicitor, Mr. Bernazzoli, to answer the judgment creditor.
[9] Accordingly, a letter in reply was sent to Mr. Pascal Dumaraix, a representative of the judgment creditor, by Mr. Bernazzoli on April 8, 2002. This letter reads, in its relevant passages, as follows:
Dear Mr. Dumaraix:
Please be advised that I am the attorney for Romeo Hebert. I am in response to your letter of March 26, 2002.
I have been dealing with this promissory note over the years. ... First of all, the balance due on the note is not $38,000.00.
[10] On April 18, 2002, the judgment creditor commenced proceedings in this Court with a view to obtaining a garnishee order to show cause on the note. The requested order was obtained on April 24, 2002.
[11] It appears, moreover, from an affidavit dated September 23, 2003, by Annick Bertrand, the brother of the judgment debtor, that the garnishee, at the request of the judgment debtor, gave Annick Bertrand the amount of US$5,000 in March 1997 and a similar amount on or about June 19, 1999.
Analysis
[12] According to the judgment creditor, at the time of the request for a garnishee order to show cause, the note was not prescribed because, as the first submission goes, the two remittances of money to Annick Bertrand interrupted the three-year prescription and, de facto, deferred the prescription to June 19, 2002.
[13] The judgment creditor's second submission is that Mr. Bernazzoli's letter of April 8, 2002, by itself sets up sufficient content to constitute a new acknowledgment of debt once the prescription was acquired.
[14] As to the remittances of money made by Roméo Hébert to Annick Bertrand, the latter's affidavit, obtained as a result of actions taken by the judgment creditor, does not draw any direct connection between these remittances and the note. Indeed, this affidavit does not report that these remittances were viewed by Henri Bertrand or Roméo Hébert as partial repayments of the note. There is no explanation in the evidence as to why no such connection is drawn in this affidavit. Although the judgment creditor wishes to infer from the wording of this affidavit that such a connection is appropriate, the affidavit itself suggests instead that these remittances to Annick Bertrand occurred in the context of the operation of a drug trafficking business carried on jointly by Henri Bertrand and Roméo Hébert and in which Annick Bertrand acted as an employee of his brother. In short, Annick Bertrand's affidavit intimates that he needed money to meet some expenses related to drug trafficking and went to Roméo Hébert to get this money.
[15] Inglorious as this context may be, it nonetheless does not amount to a partial repayment of the debt.
[16] But there is something more in the record that militates against adopting the view that the remittances to Annick Bertrand were an interruption of the prescription.
[17] In an affidavit dated April 25, 2003, a detective of the Saint-Jérôme municipal police force, acting at all relevant times on behalf of the RCMP, states in paragraphs 4 and 6 that in November 1999 and March 2000 Henri Bertrand or his then lawyer contacted Roméo Hébert to claim the amount of $38,000. This affidavit, which emanates from the judgment creditor but was filed in evidence by the garnishee, deals with the note and establishes that in March 2000 the sum still owing on the note was $38,000. Accordingly, this evidence strongly tends to show that the remittances to Annick Bertrand in March 1997 and June 1999 were not at all connected with the note. In November 1999 and March 2000, a time when Roméo Hébert was not sought as garnishee, Mr. Hébert nevertheless had an interest in stating that the balance owing was less than US$38,000.
[18] I therefore consider that the judgment creditor, who alleges interruption of the prescription, has not discharged his onus of establishing that the remittances to Annick Bertrand were connected with the note and that these remittances could therefore be viewed as an acknowledgement of debt sufficient to interrupt the prescription.
[19] I must now assess the appropriate weight to be given to the letter of Mr. Bernazzoli dated April 8, 2002.
[20] As disclosed in paragraph [9] above, this letter clearly establishes that this American attorney acts for Roméo Hébert and has been instructed to answer the letter of the judgment creditor dated March 26, 2002. This letter is addressed to the note and Mr. Bernazzoli says he is acquainted with the history of this note.
[21] The garnishee's present counsel, however, raised a number of arguments as to why the allegation by Mr. Bernazzoli that "... the balance due on the note is not 38 000 $US" could not be used against the garnishee.
[22] The fact that this admission originates from an attorney who is not a member of the Quebec Bar does not prevent this attorney from being considered a valid mandatary of the garnishee. The statements by this attorney cannot be regarded as statements by a third party in relation to the garnishee. This attorney was acting in place of the rights and obligations of the garnishee, as a mandatary, and is indistinguishable from the garnishee.
[23] In an effort to deny any weight to this statement by the garnishee's representative, which implies that if there is a balance owing on the note it is because some payments were made in the past, the garnishee filed a statutory declaration by Mr. Bernazzoli, dated November 24, 2003, in which he states, inter alia, in relation to his letter of April 8, 2002:
My statements first need to be placed in the context in which they were written. Second, at no time did I nor my client ever represent or intend to represent that payments were made on the note, nor were any promises made which would have caused Mr. Bertrand or the present owners of the note to delay in instituting suit during the prescription period. At the time my letters were written and affidavits filed the prescription period had already run.
[24] However, this statement by Mr. Bernazzoli does not say anything more about the so-called context of his statement of April 8, 2002. This statement of November 2003 by Mr. Bernazzoli cannot be accepted. His letter of April 8, 2002, clearly situates his statement on the note; a statement that suggests that some payments had been made on the note.
[25] What weight, then, should be given to this letter?
[26] First, I do not think this letter is sufficient authority to validly state that the remittances to Annick Bertrand must be viewed as payments in partial repayment of the note. This letter of April 8, 2002, does not draw any link between the balance owing on the note and the payments to Annick Bertrand.
[27] Second, it should not be forgotten that this letter of April 8, 2002, arrived at a time that the three-year prescription had elapsed, i.e. on November 12, 1999.
[28] It appears from the judgment in Brosseau v. Valentine, B.E. 99BE-88 (C.Q.) that when prescription is acquired, a new contract and a new promise to pay are required in order to revive the prescribed debt. In this case, the letter of April 8, 2002, does not amount to that.
[29] Accordingly, it must be concluded that the note is prescribed in favour of the garnishee and the garnishee must therefore be relieved of the garnishee order to show cause issued in this Court on April 24, 2002. It appears to me, moreover, that in regard to costs it is reasonable and fair in this case that the order to be issued provide that it is issued without costs since it was only at the actual hearing on the motion for a garnishee order absolute that the garnishee raised some arguments based on the affidavit of April 25, 2003 of the detective with the Saint-Jérôme municipal police, as well as the Brosseau judgment, supra.
"Richard Morneau"
Prothonotary
Montréal, Quebec
February 24, 2004
Certified true translation
Suzanne Gauthier, C.Tr., LL.L.
FEDERAL COURT
SOLICITORS OF RECORD
DOCKET: ITA-32-02
STYLE: In the matter of the Income Tax Act,
- and -
In the matter of an assessment or assessments established by the Minister of National Revenue under one or more of the following statutes: the Income Tax Act, the Canada Pension Plan and the Employment Insurance Act,
AGAINST:
HENRI BERTRAND
Judgment Debtor
and
ROMÉO HÉBERT
Garnishee
PLACE OF HEARING: Montréal, Quebec
DATE OF HEARING: January 30, 2004
REASONS FOR ORDER: RICHARD MORNEAU, PROTHONOTARY
DATED: February 24, 2004
APPEARANCES:
JULIE MOUSSEAU FOR THE JUDGMENT CREDITOR
JEAN DESROSIERS FOR THE GARNISHEE
SOLICITORS OF RECORD:
MORRIS ROSENBERG FOR THE JUDGMENT CREDITOR
JEAN DESROSIERS FOR THE GARNISHEE