Executive Summary: Key Legal and Evidentiary Issues

• Dispute centered on the municipal right to recover tax reductions after a golf course ceased operations.

• Court interpreted article 213 of the Loi sur la fiscalité municipale to determine responsibility for repayment.

• Determined that cessation of golf activities—not property sale—triggers the municipality’s right to claim.

• Concluded that the new owner, not the previous one, was liable as it was the party that ceased operations.

• Prior jurisprudence on similar tax regimes was distinguished due to different factual and legal contexts.

• Absence of a formal tax bill or demand letter did not invalidate the municipality’s right to recover the amount.

Facts and procedural context

The Ville d’Estérel filed a claim against two parties: Club de Golf Estérel inc. (CGE), the previous owner of a golf course, and 9025-1950 Québec inc. (Québec inc.), the new owner. From 2012 to 2021, CGE operated a public golf course on municipal land and benefited from a special reduced property tax regime established by articles 211 to 213 of the Loi sur la fiscalité municipale (LFM). In March 2022, CGE sold the property and all related equipment to Québec inc. Shortly after the sale, the golf course was permanently closed.

The City sought to recover $103,489.34 in tax reductions granted over the prior ten years, claiming that the cessation of golf operations triggered its right under article 213 LFM to retroactively reclaim the tax benefit. The City demanded payment from both CGE and Québec inc., arguing that either or both were liable under the statute.

Arguments of the parties

The City argued that Québec inc. was the party responsible because it made the decision to cease operating the golf course after acquiring it. Alternatively, it claimed that if CGE were held liable, Québec inc. remained solidarily responsible under tax law principles and the Civil Code.

Québec inc. countered that only CGE benefited from the tax reductions and should be liable. It claimed that since it never received a tax bill or formal notice, the claim against it should fail procedurally. CGE argued it should bear no liability, as it maintained the golf course in continuous operation up until the sale and had no role in the decision to shut it down.

Legal analysis and court’s reasoning

The court examined article 213 of the LFM, which allows a municipality to recover the difference between reduced taxes paid and regular taxes that would have applied for up to ten years preceding the end of a golf course’s operation. The triggering event, the court found, is not the sale of the property but the actual cessation of golf activities.

Applying a modern approach to statutory interpretation, the court concluded that Québec inc. was the party responsible for ending the golf course’s operations, as evidenced by testimony from its representative and corroborated by the course’s former superintendent. CGE had, despite some underinvestment, kept the course open and qualified for the regime. The court rejected Québec inc.’s argument that CGE had de facto abandoned the course.

The court further ruled that although the City had not sent a formal tax bill or a prior demand letter to Québec inc., this did not bar its claim. It determined that the judicial demand itself sufficed as formal notice under the Civil Code and that article 252.1 LFM imposed a legal duty to pay regardless of pending litigation. The claim was also not invalid for lack of a tax notice, as the amount sought was not a tax per se, but a statutory amount arising from a past tax benefit.

Judgment and outcome

The court concluded that Québec inc. was solely responsible for the tax repayment under article 213 LFM. The claim against CGE was dismissed. Québec inc. was ordered to pay $103,489.34 to the Ville d’Estérel, along with interest at the legal rate and an additional indemnity under article 1619 of the Civil Code, calculated from the date of the formal notice (November 16, 2022). The City was also awarded costs against Québec inc., while it was ordered to pay CGE’s legal costs due to the unsuccessful claim against it. The case confirms that liability under municipal tax recovery regimes hinges on who ceases the qualifying activity—not who historically benefited from the tax advantage.