[OFFICIAL ENGLISH TRANSLATION]
96-3633(GST)I
BETWEEN:
SERGE TOUSSAINT,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Appeal heard on January 8, 1998, at Québec, Quebec, by
the Honourable Judge G. Tremblay
Appearances
Counsel for the Appellant: The Appellant himself
Counsel for the Respondent: Christian Hacquin
JUDGMENT
The appeal from the assessment made pursuant to the Excise Tax Act, notice of which is dated August 22, 1995, and bears number 4056211, is dismissed in accordance with the attached Reasons for Judgment.
Signed at Québec, Canada, this 28th day of January 1998.
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"Guy Tremblay" |
J.T.C.C.
Translation certified true
on this 4th day of June 2003.
Sophie Debbané, Revisor
[OFFICIAL ENGLISH TRANSLATION]
Date: 19980128
Docket: 96-3633(GST)I
BETWEEN:
SERGE TOUSSAINT,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR JUDGMENT
G. Tremblay, J.T.C.C.
Point at issue
[1] According to the Notice of Appeal and the Reply to the Notice of Appeal, the issue is whether the appellant is entitled to the Goods and Services Tax ("GST") new housing rebate. The appellant apparently owned a four-unit property in Hâvre-St-Pierre.
[2] The respondent argued that the rebate applies only to an owner of a single unit residential complex, which includes a multiple unit residential complex containing two residential units.
Burden of proof
[3] The appellant has the burden of showing that the respondent's assessment is incorrect. This burden of proof results from a number of judicial decisions, including a judgment of the Supreme Court of Canada in Johnston v. Minister of National Revenue.[1]
[4] In that judgment, the Court decided that the facts assumed by the respondent in support of his decision are also deemed true until there is evidence to the contrary. In the case at bar, the facts assumed by the respondent are set out in subparagraphs (a) to (d) of Paragraph 5 of the Reply to the Notice of Appeal. This paragraph reads as follows:
[TRANSLATION]
5. In assessing the appellant, the Minister relied, inter alia, on the following conclusions and assumptions of fact:
(a) the appellant applied for a rebate of the sales tax on a four-unit residential complex; [denied]
(b) the civic address of this property is 1223 and 1225 Boréale Street, Hâvre-St-Pierre; [admitted]
(c) the property is divided into four separate units, namely, 1223A, 1223B, 1225A and 1225B; [admitted]
(d) the appellant is not a registrant for the purposes of the Excise Tax Act (R.S.C. 1985, c. E-15); [denied]
Facts produced in evidence
[5] In addition to the above admissions, the evidence was completed by the appellant's testimony and the filing of Exhibits A-1 to A-3 and I-1 and I-2.
[6] In 1994, the appellant, who is a teacher at L'Eau Vive school in Québec, lived on Boréale Street in Hâvre-St-Pierre (Iles de la Madeleine) where he also taught. He lived in a house owned by him. However, since he had three children and his wife was expecting a fourth, he decided to build a second house. Construction work on the house began in November 1994 and ended in April 1995.
[7] Construction of the house was made possible through a loan from the Caisse populaire Desjardins de Hâvre-St-Pierre and the application for loan insurance was accepted by the Canadian Mortgage and Housing Corporation ("CMHC"). [TRANSLATION] "The application had been made in accordance with the insurance criteria for an owner-occupant." According to the letter from CMHC (Exhibit A-1), the loan requested was $117,420.
[8] According to the contract entered into between the appellant and M. A. Richard, Contractor, (Constructions RICOR Inc.) on November 8, 1994 (Exhibit A-2), the contractor promised to:
[TRANSLATION]
To supply and deliver on the customer's foundations in Hâvre-St-Pierre, a 26' x 52' single family semi-detached Domicilex house, 2 electrical boxes, baseboard heating in basement, 2 hot water tanks, 2 basement steps, 2 full bathrooms, melamine vanity, 2 kitchens, melamine cupboards, 2 5' patio doors, PVC crank window frames, vinyl siding exterior, 2 front doors, combined frames, 6 basement windows, 2 melamine vanities, 2 premoulded bathtubs, 2 toilets, 2 washstands and fitting, all according to Domicilex standard specifications.
The price agreed was $74,200. The customer, Mr. Toussaint, was responsible for some of the work, however, including foundations, plumbing, and connections to municipal services. According to the appellant, what was involved was in fact a duplex.
[9] In his Notice of Appeal, Mr. Toussaint described what follows as being his [TRANSLATION] "fixed objectives": "I was to live in the property at number 1223 and rent the other property at number 1225, which consisted of two units. On about April 15, 1995, I claimed an amount of $2,625.26 as a GST rebate for the property (at number 1223) that I was to live in." The application for the GST rebate was filed as Exhibit I-2 and states the following information:
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D- Rebate calculation (complete only Part I, II or III) |
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PART I Rebate calculation for housing where GST has been paid on new or substantially renovated housing, a new mobile home or floating home (this part must be completed by claimants who checked Box 1A, 2 or 4 in Section B) |
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Total GST paid or payable on the home or dwelling unit or for the construction or renovation of a house |
A |
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$7, 292.38 |
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Purchase price/ Fair market value (GST not included) |
B |
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$104,414.84 |
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A: $7,292.38 x 36% (maximum $8,750) |
C |
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$2,625.26 |
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1) If B is $350,000 or less, enter C. Total rebate amount
2) If B is more than $350,000, enter the result of the following calculation:
$2,625.26 ($450,000 - B X C: $ = $ (If negative, enter 0.)
[10] Construction of the house was completed in April 1995. Being informed shortly before that his teaching services would no longer be needed in Hâvre-St-Pierre, the appellant moved to Drummondville, Quebec, in April 1995 to look for another job.
[11] In his Notice of Objection of November 10, 1995, Mr. Toussaint explained the facts but in greater detail:
[TRANSLATION]
When I had the immovable properties built at 1223 and 1225 Boréale Street, Hâvre-Saint-Pierre, my intention was to rent number 1225 (1 X 4½ and 1 X 3½) and make 1223 my residence (ref: CMHC and the Hâvre-Saint-Pierre Caisse Populaire). In April 1995, I lost my job; I was forced to sell the two properties before I could occupy the unit (1223) and to move to Drummondville to look for another job.
[12] Before leaving the Iles-de-la-Madeleine, the appellant had rented the units in the new house to four tenants: Luc Petitpas, Dany Tremblay, Daniel Vigneault and Gilles Choudusse (Exhibit I-1). Gilles Choudusse later purchased from the appellant the two houses he owned, that is, the one that he was already occupying and the new four-unit property.
[13] The appellant's application is for a "single unit residential complex". The definition is found in subsection 256(1) of the Excise Tax Act:
256(1) Definitions In this section,
"single unit residential complex" includes a multiple unit residential complex that does not contain more than two residential units.
[14] Although in his Notice of Objection (para. [11]) as well as in his Notice of Appeal (para. [9]), the appellant claimed that his intention was to subsequently live in the property situated at 1223 Boréale Street in Hâvre-St-Pierre, it is clear, nevertheless, from the rebate application (para. [9], Exhibit I-2) that the fair market value of the property on which he based his claim was $104,414.84, i.e., the price for 1223 Boréale Street, and that he occupied both dwelling units at number 1225.
[15] This confirms, then, that the property was taken as a whole and that, although the appellant had lived in 1223 Boréale Street, the entire property consisted of more than two residential units. The definition of a "single unit residential complex" in subsection 256(1) of the Excise Tax Act is therefore not met.
Conclusion
[16] The appeal is dismissed.
|
"Guy Tremblay" |
J.C.C.I.
Québec, Canada, this 28th day of January 1998.
Translation certified true
on this 4th day of June 2003.
Sophie Debbané, Revisor