Date: 20010515
Docket: A-3-00
Neutral citation: 2001 FCA 152
CORAM: STONE J.A.
ROTHSTEIN J.A.
SEXTON J.A.
BETWEEN:
CHRISTOPHER DEGEER
Appellant
- and -
HER MAJESTY THE QUEEN
Respondent
Heard at Toronto, Ontario, Monday, May 14, 2001
Judgment delivered at Toronto, Ontario,
on Tuesday, May 15, 2001
REASONS FOR JUDGMENT BY: ROTHSTEIN J.A.
CONCURRED IN BY: STONE J.A.
SEXTON J.A.
[1] Despite the able argument of counsel for the appellant, we are not persuaded that Bell J.T.C.C. erred in finding that there was no disposition of the appellant's farm on August 15, 1992 by the appellant to his parents and that no capital loss arose therefrom. The appellant relies on Browne v. Dunn, [1894] 6 R. 67 (H.L.) in respect of the evidence of Mrs. Watson, the appellant's mother, to argue that the Crown cannot treat her evidence as not credible without cross-examining her and giving her an opportunity to explain. However, the pleadings are replete with allegations by the Crown that there was no disposition. There was clear notice that the facts in respect of the purported disposition and therefore purported reconveyance were in issue. In any event, there is no indication that the Tax Court Judge disbelieved Mrs. Watson. Even believing her testimony that she offered to reconvey the farm to the appellant, the Tax Court Judge had concluded that she would do whatever the appellant asked her to do with respect to legal transactions involving the farm. This is all consistent with a scheme whereby the Appellant would appear to be disposing of the farm to crystalize a capital loss while, in the non-arms length circumstances of the relationship between him and his mother and stepfather, he retained the beneficial ownership of the farm.
[2] The purported transfer of the farm from the appellant to his parents was made without any cancellation or adjustment of the promissory note for $1,275,000.00 that the appellant had given his parents when the farm was transferred to him originally. There is simply no credible explanation as to why, if he genuinely was disposing of the farm to his parents, no adjustment to the promissory note was made. In my view, this was a key piece of evidence which the Tax Court Judge was entitled to take into account in determining that the appellant's evidence to the effect that he intended to dispose of the farm in August, 1992 was not credible.
[3] All the facts surrounding the purported transactions caused the learned Tax Court Judge to conclude that there was no disposition by the appellant and no capital loss. There is no basis upon which this Court should interfere with that finding.
[4] With respect to the penalties assessed, the Tax Court Judge found that the appellant knowingly made false statements in his returns and found that he was subject to the penalties that were assessed. Again there is no basis for this Court interfering with that finding.
[5] I would dismiss the appeal with costs.
"Marshall Rothstein"
J.A.
"I agree
A. J. Stone"
"I agree
"J. E. Sexton"
FEDERAL COURT OF CANADA
Names of Counsel and Solicitors of Record
DOCKET: A-3-00
STYLE OF CAUSE: CHRISTOPHER DEGEER
Appellant
- and -
HER MAJESTY THE QUEEN
Respondent
DATE OF HEARING: MONDAY, MAY 14, 2001
PLACE OF HEARING: TORONTO, ONTARIO
REASONS FOR JUDGMENT BY: ROTHSTEIN J.A.
CONCURRED IN BY: STONE J.A.
SEXTON J.A.
DATED: TUESDAY, MAY 15, 2001
APPEARANCES: Mr. William Innes, and
Mr. Matthew Williams, and
Mr. Michael Colborne
For the Appellant
Mr. Gordon Bourgard
For the Respondent
SOLICITORS OF RECORD: Thorsteinssons
Barristers & Solicitors
Box 611, BCE Place, 36th Floor
161 Bay Street
Toronto, Ontario
M5J 2S1
For the Appellant
Morris Rosenberg
Deputy Attorney General of Canada
For the Respondent
FEDERAL COURT OF APPEAL
Date: 20010515
Docket: A-3-00
BETWEEN:
CHRISTOPHER DEGEER
Appellant
- and -
HER MAJESTY THE QUEEN
Respondent
REASONS FOR JUDGMENT
Date: 20010515
Docket: A-3-00
Toronto, Ontario, Tuesday, the 15th day of May, 2001
CORAM: STONE J.A.
ROTHSTEIN J.A.
SEXTON J.A.
BETWEEN:
CHRISTOPHER DEGEER
Appellant
- and -
HER MAJESTY THE QUEEN
Respondent
JUDGMENT
The appeal is dismissed with costs.
"A. J. Stone"
J.A.
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