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"
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
|
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