GF Partnership – Federal Court of Appeal confirms that a housing developer did not incur municipal deveopment levies as agent for the home purchasers

A housing developer sought to avoid the requirement to charge GST, on the portion of the home sales prices that represented a recovery of municipal development levies, by inserting a clause in the sales agreements stating that the development levies had been (or would be) paid by it on behalf of the purchasers.  The Federal Court of Appeal has affirmed a finding by Woods J. that this did not work.  She had found that the clause was defectively drafted, so that the development levy on-charges were taxable.  Moreover, even a well drafted clause might not have done the trick given that the development levies often were paid in advance of the sales agreements (i.e., before the supposed principals had even been identified).

Neal Armstrong. Summaries of GF Partnership v. The Queen, 2013 TCC 53, aff’d 2013 FCA 260 under ETA ss. 153(1), 154(1), 254(6) and 296(2).