Context:

• Issue: Dispute over the application of Quebec's Sales Tax Law (LTVQ) to security deposits and a "Protection Plus" plan. Revenu Québec issued tax assessments claiming owed amounts totaling $304,289.36 (including interest and penalties).

Key Issues:

1. Security Deposits:

   • Revenu Québec argued these are subject to Quebec Sales Tax (QST) under section 318 of LTVQ if seized by Autonum.
   • Autonum challenged this, claiming the deposits are either not consideration for a taxable supply or are financial instruments exempt under section 169.3 LTVQ.

2. Defense Modification:

   • Revenu Québec sought to modify its legal argument two weeks before the hearing, shifting the basis from section 92 to section 318 of the LTVQ. The request was denied at multiple judicial levels.

Rulings:

• Allegations & Judicial Admissions:

  • Autonum argued that Revenu Québec admitted section 92 LTVQ is inapplicable, effectively conceding the tax assessment is baseless.
  • The court ruled no judicial admission occurred as admissions in law (as opposed to facts) are not binding.

• Radiation of Allegations:

  • Autonum sought to strike parts of Revenu Québec’s defense related to security deposits, arguing they were legally irrelevant.
  • The court rejected this, stating that the facts must be proven or admitted at trial.

Outcome:

• The court deferred the case for a full trial to resolve the factual and legal disputes.
• Revenu Québec retains the ability to argue alternative legal provisions (e.g., section 318 LTVQ) during the trial.
• No monetary award at this stage.

Successful Party: Both Autonum and Revenu Québec had partial successes in procedural rulings:

• Autonum: Prevented Revenu Québec from modifying its defense.
• Revenu Québec: Successfully defended against the motion to strike allegations.