Docket: 2009-2807(GST)I
BETWEEN:
ROSS HENDERSON,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
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Appeal heard on 7 May 2010, at Nanaimo, British Columbia.
Before: The Honourable Justice
Gaston Jorré
Appearances:
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For the appellant:
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The
appellant himself
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Counsel for the respondent:
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Max Matas
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____________________________________________________________________
JUDGMENT
The appeal from the assessment made under
the Excise Tax Act, notice of which is dated 10 October 2008
and bears number 08238509412370002, is
dismissed in accordance with
the attached reasons for judgment.
Signed at Ottawa, Ontario,
this 7th day of January 2011.
"Gaston
Jorré"
Citation: 2011 TCC 8
Date: 20110107
Docket: 2009-2807(GST)I
BETWEEN:
ROSS HENDERSON,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR JUDGMENT
Jorré J.
[1]
The appellant applied
for the 1% GST transitional rebate pursuant to subsection 256.74(5) of the Excise
Tax Act (ETA). On the assessment the Minister denied the rebate. The
appellant elected to proceed under the informal procedure.
[2]
The factual
circumstances of this matter are somewhat unusual. The appellant wished to
acquire a new house, yet to be constructed, in Courtenay, British Columbia. On 7 May 2007 he signed a contract with Benco
Ventures (BC) Ltd.
[3]
The terms and
conditions of that contract are those of a construction contract save for one
exception. For example, the contract states that the appellant, referred to as
the “purchaser”, wishes to construct a project on lot 24. Among other terms the
contract refers to plans and specifications, a payment schedule, a completion
date, possession of the structure and warranties.
[4]
The only term of the
contract which suggests that it is for anything other than a construction
contract is one of the terms of the payment schedule. This term provides that
the appellant is to pay “$132,500 plus GST and PTT to purchase lot by June
28, 2007”. The amount of $132,500 was part of the $415,000 total price of
the contract.
[5]
The appellant never
entered into a contract with anyone else to purchase lot 24 nor did the appellant
ever pay anyone else for lot 24. He did pay the $132,500 to Benco and in August
2007 title to lot 24 was transferred from Silverado Land Corp. to the appellant.
[6]
The exterior of the
house was completed in 2007.
[7]
Benco completed the
house in 2008 and the appellant took possession in 2008.
[8]
The evidence also
showed that there was a contract of purchase and sale dated 8 May 2006
wherein Benco agreed to purchase certain lots including lot 24 from
Silverado.
[9]
Although title to lot
24 was never transferred from Silverado to Benco, a law firm prepared a
statement of adjustments for the sale of lot 24 from Silverado to Benco as of 1 August
2007. The same law firm also prepared a statement of adjustments for the sale
of lot 24 from Benco to the appellant as of 1 August 2007.
[10]
From the exhibits one
can see that the appellant ultimately paid 6% GST on payments totalling
$415,000 that he made to Benco pursuant to the contract of 7 May 2007. He
paid 5% GST on a much smaller invoice of $12,326.08 relating to certain
upgrades.
[11]
The appellant also
tendered into evidence an agreement between himself and Benco entitled “Offer
to Purchase” with respect to the property at lot 24. The appellant
was quite forthright in his direct examination and stated that although this
document was dated 7 May 2007 it was in fact prepared later after the
Canada Revenue Agency questioned his claim for the transitional rebate.
Accordingly, I have not accorded any weight to the “Offer to Purchase”.
[12]
Among other conditions,
subsection 256.74(5) of the ETA requires:
(a) that the supply be by
way of sale pursuant to a contract of purchase and sale and
(b) that the ownership and
possession of the residential complex, in this case the home and underlying
land, be transferred to the appellant after 2007.
[13]
Given that the
appellant never contracted with anyone else other than Benco to buy lot 24,
that the Appellant paid Benco the $132,500, given the one provision in the contract
between the appellant and Benco (Exhibit A-4) regarding the due date for the
$132,500 and given the statement of adjustments between Benco and the
appellant, I conclude that the appellant bought lot 24 from Benco.
[14]
However, the appellant
fails to meet the two conditions enumerated in paragraph 12 above. First, the contract
between the appellant and Benco entered into on 7 May 2007 is not a
contract for the purchase of a house. It is a contract for the construction of
a house on a lot which Benco also sold to the appellant and which lot the
appellant acquired prior to the start of construction.
[15]
Secondly, while the
appellant did not have possession of the house until 2008, he acquired
ownership of the land, as well as the house, to the extent that it had been
built, in 2007. As a result ownership and possession of the residential complex
were not transferred after 2007.
[16]
I regret that I must
dismiss the appeal.
Signed at Ottawa, Ontario, this 7th day of January 2011.
"Gaston Jorré"
CITATION: 2011 TCC 8
COURT FILE NO.: 2009-2807(GST)I
STYLE OF CAUSE: ROSS HENDERSON v. HER MAJESTY THE QUEEN
PLACE OF HEARING: Nanaimo, British Columbia
DATE OF HEARING: 7 May 2010
REASONS FOR JUDGMENT BY: The
Honourable Justice Gaston Jorré
DATE OF JUDGMENT: 7 January 2011
APPEARANCES:
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For the appellant:
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The appellant himself
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Counsel for the respondent:
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Max Matas
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COUNSEL OF RECORD:
For the Appellant:
Name:
Firm:
For the
Respondent: Myles J. Kirvan
Deputy
Attorney General of Canada
Ottawa, Ontario
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