FEDERAL COURT JURISDICTION |
Trial Division |
Gadbois v. Transport H. Cordeau Inc.
ITA-1384-97
2001 FCT 3, Tremblay-Lamer J.
1/2/01
13 pp.
Appeal from decision of Morneau P. allowing motion by Her Majesty the Queen, applicant-respondent (respondent) for garnishee order absolute against Transport H. Cordeau Inc., appellant garnishee (appellant)--Appellant, transportation and snow removal company, ran into serious financial problems in 1995--Borrowed money from several people, including Québec Inc., owned by Gilbert Gadbois--Also borrowed money from J.L. Michon Transport Inc., garnishee (Michon Transport)--On February 17, 1997 Gadbois owed respondent sum of $1,285,674.06--Latter took steps to recover debt in 1996--Matter referred to Morneau P. for hearing on merits of respondent's motion for garnishee order absolute against appellant--Whether Court had jurisdiction to decide case at bar--Under Income Tax Act, s. 224(1), Court may order garnishment against third party liable to make payment to tax debtor--In ITO--International Terminal Operators Ltd. v. Miida Electronics Inc. et al., [1986] 1 S.C.R. 752, S.C.C. adopted test with three essential requirements for deciding on Federal Court's jurisdiction--First test met in case at bar since procedural vehicle used by respondent to obtain garnishee order absolute against appellant Income Tax Act, which gives this Court jurisdiction--Second test requires body of federal law essential to disposition of case and nourishing statutory grant of jurisdiction--If dispute only tangentially related to corpus of federal law, possible that assuming jurisdiction would take Federal Court out of its constitutionally mandated role--Under rules 449 et seq., this Court's jurisdiction limited to ordering garnishment and deciding matters incidental to jurisdiction--Crux of matter validity of transactions challenged by respondent--Validity of those transactions cannot be regarded as incidental to question relating to garnishment--Questions of fraud, simulation and enforceability cannot be fairly and properly resolved solely by reference to evidence and transcripts of examinations on affidavit--Summary procedure for disposing of evidence provided by Federal Court Rules therefore deprives appellant of opportunity to rely on all grounds of defence and rules of evidence open to it in provincial superior court--Only provincial courts competent to try case at bar--Court therefore lacked jurisdiction to do so--Federal Court Rules, 1998 SOR/98-106, rule 449--Income Tax Act, R.S.C., 1985 (5th Supp.), c. 1, s. 224 (am. by S.C. 1994, c. 7, Sch. V, s. 91; idem, Sch. VIII, s. 130; idem, c. 21, s. 101; S.C. 1997, c. 12, s. 128).