Executive Summary: Key Legal and Evidentiary Issues

• The plaintiff retained the defendant to prepare his personal income tax returns for the years 2015 to 2021.
• Errors in the 2019, 2020, and 2021 returns included deducting unsupported expenses and failing to account for taxable benefits received from the plaintiff's management company.
• Tax authorities issued reassessments significantly increasing the plaintiff's taxable income for each of the three years at issue.
• After the defendant failed to respond to tax authority inquiries as agreed, the plaintiff was forced to hire a new accounting firm to file notices of objection.
• Accountant Hélène Boucher testified that the defendant's errors reflected a poor application of known accounting principles regarding expense computation and the tax treatment of advances.
• Applicable law under Article 2100 C.c.Q. requires a service provider to act in the client's best interests, with prudence, diligence, and in accordance with professional standards.

Facts of the case

Yves Lagacé retained 9283-9869 Québec inc. to prepare his personal income tax returns for the years 2015 to 2021. Following the filing of the 2019, 2020, and 2021 returns, the Canada Revenue Agency (CRA) and Revenu Québec requested explanations concerning dividends, certain advances received from Services financiers Yves Lagacé inc., and expenses claimed in Lagacé's capacity as a self-employed worker. The defendant undertook to provide the necessary explanations to the tax authorities, but failed to do so. As a result, Lagacé received reassessments that substantially increased his taxable income for each of the three years. His originally declared taxable income of $107,482, $112,049, and $106,416 for 2019, 2020, and 2021 respectively was reassessed upward before being partially corrected following notices of objection filed by a new accounting firm. Because the defendant did not collaborate, Lagacé had no choice but to engage another firm to review the files, gather supporting documentation, and submit the necessary explanations.

Applicable legal framework

The central legal provision is Article 2100 of the Civil Code of Québec (C.c.Q.), which requires a service provider to act in the client's best interests, with prudence and diligence, and in conformity with applicable professional usages and standards.

Court's reasoning and analysis

The court found that the preponderance of evidence established that the defendant had not acted in Lagacé's best interests and had not delivered services conforming to professional standards. Accountant Hélène Boucher — who held the title of Chartered Professional Accountant at the time of her review, though she ceased using that title as of January 7, 2026 — testified that the defendant committed flagrant errors: it deducted expenses unsupported by receipts and failed to include certain taxable benefits arising from payments made by Lagacé's management company on his behalf. These errors reflected a faulty application of accounting principles relating to expense calculation and the proper tax treatment of advances received from a corporation. Furthermore, the defendant failed to respond to the tax authorities' inquiries despite having committed to do so. The court accepted that, but for the defendant's errors, Lagacé would not have incurred the additional interest charges on the extra taxes assessed, nor the increased 2023 tax burden resulting from the correction of previously unrecognized advances. In 2023, the previously untaxed advance balance of $171,961.18 was added to that year's advances, raising the federal tax rate by 4% (from 29% to 33%), generating an additional federal tax charge of $6,878.45, and raising the provincial rate by 1.75% (from 24% to 25.75%), generating an additional provincial charge of $3,009.32.

Ruling and overall outcome

The court allowed the claim in full. Lagacé was awarded $13,779, comprising $1,222.27 in interest paid to the CRA, $2,668.96 in interest paid to Revenu Québec, $6,878.45 for the additional 2023 federal tax burden, and $3,009.32 for the additional 2023 provincial tax burden. The defendant was ordered to pay this amount together with legal interest at the legal rate and the additional indemnity provided under Article 1619 C.c.Q., running from the formal demand of March 31, 2025, plus court costs.