Lipson Case

2009/01/08 — (SCC) Lipson et al v The Queen

2009 SCC 1;  2009 DTC 5015;  [2009] 1 CTC 314

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HISTORY:

SCC      2009/01/08 Docket:  32041, 32042, 2009 SCC 1, 2009 DTC 5015, [2009] 1 CTC 314, [2009] 1 S.C.R. 3, [2009] S.C.J. No. 1

FCA     2007/03/16 Docket: A-230-06; A-231-06, 2007 FCA 113, [2007] 3 CTC 110, 2007 DTC 5172, [2007] 4 F.C.R. 641, [2007] F.C.J. No. 402, 2007 CarswellNat 2257, 2007 CarswellNat 640, 280 D.L.R. (4th) 714

TCC     2006/04/19 Docket: 2002-1862(IT)G; 2002-1864(IT)G, 2006 TCC 148, [2006] 3 CTC 2494, 2006 DTC 2687, [2006] T.C.J. No. 174, 2006 CarswellNat 982

HEADNOTE:

Appeals raising the issue of what constitutes abusive tax avoidance for the purposes of the general anti-avoidance rule ("GAAR") provided for in the ITA.  More specifically at issue was whether a series of transactions beginning with a wife borrowing money to purchase shares in a family corporation and leading to the husband deducting the interest on the couple's home mortgage loan results in an abuse and misuse of one or more provisions of the Act, as contemplated in s. 245(4) of the ITA. All the transactions were conceded to result in two tax benefits and to be avoidance transactions. The Federal Court of Appeal had dismissed the appellants' appeals from a Tax Court judgment which in turn had dismissed the initial appeals by the appellant taxpayers following assessments by CRA. Appeals dismissed (with three judges dissenting).  Français

REFERENCES:  ITA: 20(1)(c), 20(3), 73(1), 74.1(1), 74.5(11), 245(1), 245(2), 245(3), 245(4), 245(5)

 CASES CITING THIS CASE:

Considered:
Swirsky v The Queen, 2013 TCC 73 (Paris) 
The Queen v Landrus, 2009 FCA 113 (Noël) 
The Estate of the Late Edward S. Rogers v The Queen, 2014 TCC 348 (Hogan) 

Referred to:
Pièces automobiles Lecavalier Inc. v The Queen, 2013 TCC 310 (Bédard) 
Descarries et al v The Queen, 2014 TCC 75 (Hogan) 
Triad Gestco Ltd. v The Queen, 2012 FCA 258 (Noël) 
Lehigh Cement Limited et al v The Queen, 2013 TCC 176 (Paris) 
The Queen v Global Equity Fund Ltd., 2012 FCA 272 (Mainville) 
Spruce Credit Union v The Queen, 2012 TCC 357 (Boyle) 
Sunatori v The Queen, 2010 TCC 346 (Hershfield) 
Lyncorp International Ltd. v The Queen, 2011 FCA 352 (Rothstein)