Background:

• The case revolves around a dispute following the termination of a business partnership in real estate development.
• A key issue was whether a $500,000 payment for management and development services should include sales taxes (TPS and TVQ).

Key Issues:

1. Tax Applicability:

   • The contract was silent on whether the $500,000 was inclusive of taxes.
   • The court ruled taxes were not included, and 9202-3704 could have added $74,875 as TPS and TVQ.

2. Compliance with Tax Laws:

   • 9202-3704's claim for tax recovery was denied as it did not:
     • Clearly state the tax amount or issue a proper invoice per tax laws.
     • Report or remit the full taxes to tax authorities, undermining its ability to recover them.

3. Claims of Procedural Abuse:

   • Both parties accused each other of abusive litigation tactics.
   • The court found neither party's actions constituted abuse under procedural rules.

Court's Decisions:

• Tax Recovery Claim: Denied due to procedural non-compliance by 9202-3704.
• Abuse Claims: Rejected as neither party met the high threshold for proving abuse.
• The court did not award any damages or costs to either party.

No party was fully successful.

• The plaintiff's claim for tax recovery was rejected.
• The defendant's counterclaim for procedural abuse damages was also rejected.
• Both parties were required to bear their own legal costs.

Legal Principles Highlighted:

• In the absence of specific contract terms, sales taxes are not presumed included in payments.
• Compliance with tax laws is crucial for claims of tax recovery.
• Claims of procedural abuse require clear evidence of frivolity or malicious intent.