Date: 20130314
Docket: A-434-11
Citation: 2013 FCA 80
CORAM: BLAIS C.J.
EVANS J.A.
STRATAS J.A.
BETWEEN:
JOHN HARE
Appellant
and
HER MAJESTY THE QUEEN
Respondent
Heard at Toronto, Ontario, on March 14, 2013.
Judgment delivered from the Bench at Toronto, Ontario, on March 14, 2013.
REASONS FOR JUDGMENT OF THE COURT BY: BLAIS C.J.
Date: 20130314
Docket: A-434-11
Citation: 2013 FCA 80
CORAM: BLAIS C.J.
EVANS J.A.
STRATAS J.A.
BETWEEN:
JOHN HARE
Appellant
and
HER MAJESTY THE QUEEN
Respondent
REASONS FOR JUDGMENT OF THE COURT
(Delivered from the Bench at Toronto, Ontario, on March 14, 2013)
BLAIS C.J.
[1] Mr. Hare, the appellant, was reassessed by the Minister of National Revenue for the 2005 taxation year.
[2] The appellant was co-owner of two properties subject of this appeal with Mr. Mark Garrett and his wife. Mr. Garrett was the sole witness testifying at the hearing.
[3] Both properties were vacant when the appellant took possession, and they remain vacant up until renovations were completed.
[4] Major renovations including windows, building envelope, floor replacement, kitchen, doors, electrical, bathrooms were completed for approximately $24,000.00.
[5] The Minister refused the deduction on the basis that the expenditures were attributable to the period of renovation of the properties and, therefore, should be incurred on account of capital; not deducted from income.
[6] The trial judge agreed with the Minister and concluded that the renovation expenses were incurred and I quote: “To ready the property for rental”.
[7] The appellant argued that the trial judge erred in considering the expenses collectively rather than individually, nevertheless, took a different approach at the hearing, when he argued that we should look at the asset as a whole. (p. 379 of the transcript)
[8] The appellant also argues that the trial judge made an error in finding that the apartments were not ready to rent prior to the repairs.
[9] Our Court may not disturb the trial judge’s decision absent an error of law or, regarding questions of facts a palpable and overriding error.
[10] The trial judge made a finding of credibility with respect to the appellant’s partner and primary witness, Mr. Garrett. In fact, he concluded that the witness was “disingenuous”, referring to the assertions that there was potential asbestos in the insulation, that plumbing and wiring were not up to the code, and many other significant needed repairs, but that the property was in rentable condition prior to the renovation.
[11] The assessment of those renovations is a question of facts. The trial Judge is in a better position to deal with that.
[12] This Court has adopted a collective approach to the evaluation of property repairs, see: Fiore v. HMQ, 93 D.T.C. 5158 (FCA) and Mbénar v. Canada, 2012 FCA 180, in which a series of itemized repairs were considered collectively rather than individually.
[13] Justice Hershfield went through an extensive consideration of the facts and legal analysis. It was open to him to arrive to his conclusion. That the expenditures should be incurred on account of capital rather than deducted from income.
[14] The appellant failed to convince us that the judge made an overriding and palpable error that could justify the intervention of our Court.
[15] This appeal should be dismissed with costs.
"Pierre Blais"
Chief Justice
FEDERAL COURT OF APPEAL
NAMES OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: A-434-11
(APPEAL OF THE AMENDED JUDGMENT OF THE HONOURABLE JUSTICE J.E. HERSHFIELD OF THE TAX COURT OF CANADA, DATED JUNE 8, 2011, FILE NUMBER: 2010-2234 (IT) I)
STYLE OF CAUSE: JOHN HARE v. HER MAJESTY THE QUEEN
DATE OF HEARING: MARCH 14, 2013
PLACE OF HEARING: TORONTO, ONTARIO
REASONS FOR JUDGMENT
OF THE COURT BY: BLAIS C.J.
EVANS J.A.
STRATAS J.A.
DELIVERED FROM THE BENCH BY: BLAIS C.J.
APPEARANCES:
|
Mr. James Rhodes
|
FOR THE APPELLANT
|
|
Mr. Ernesto Caceres Mr. Bobby Sood |
FOR THE RESPONDENT
|
SOLICITORS OF RECORD:
|
Taxation Lawyers Kitchener, ON
|
FOR THE APPELLANT
|
|
William F. Pentney Deputy Attorney General of Canada |
FOR THE RESPONDENT
|