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Citation: 2010 TCC 76
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Date: 20100219
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Docket: 2009-2399(IT)I
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BETWEEN:
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KENNETH I. RENAUD,
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Appellant,
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and
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HER MAJESTY THE QUEEN,
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Respondent.
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REASONS FOR JUDGMENT
(Edited from the transcript of Reasons for Judgment
delivered orally from the Bench on December 4, 2009 in Windsor, Ontario)
Campbell J.
[1] This is an appeal respecting the 2007
taxation year of the Appellant. The facts are, for the most part, undisputed.
The Appellant owned a property at 518 Arquette Street
in McGregor, Ontario as his principal residence until he took a new
position in 2007 with his employer, Canadian National Railways.
[2] The Appellant started work at this new location in April, 2007 and
built a new residence at 47 Anderson Street, Cache Bay, Ontario.
[3] In July, 2007 the Appellant rented his former principal residence
located on Arquette Street in
McGregor. Therefore, during the 2007 taxation year, although the Appellant
changed the use of the Arquette residence to an income producing property,
he did not, in fact, sell it. In computing his income for the 2007 taxation
year, the Appellant claimed amounts related to moving expenses.
[4] The issue is whether the Appellant is
entitled to deduct moving expenses beyond the amount allowed by the Minister of
National Revenue (the “Minister”). The Minister denied the claim for the
amounts of $583.00 in legal fees and $1,897.13 in land transfer taxes on a new
home purchase on the basis that they were not deductible amounts within the
meaning of paragraph 62(3)(f).
[5] The Appellant’s position is that he is entitled to deduct these
amounts under paragraph 62(3)(f) because he did sell his former principal
residence at Arquette Street within the meaning of paragraph 45(1)(a) of
the Income Tax Act (the “Act”) because in 2007 there was a change
of character from a principal residence to a rental and, therefore, the
property was considered a deemed disposition of the Arquette property. He submits that
the amounts are selling costs in respect of the Arquette residence within the
meaning of paragraph 62(3)(f). Because the dictionary meaning of the word
“sold” references the “past tense of sell” as well as the phrase “to dispose of”,
this includes, according to the Appellant, a deemed disposition.
[6] The Appellant’s Agent referred to the
opening words of subsection 45(1) which state:
For the purposes of this subdivision the
following rules apply:
to propose that since paragraph 62(3)(f) is part of this section in the Act,
this provision should also be applied where, in addition, paragraph 62(3)(f)
does not specifically exclude subsection 45(1).
[7] The Minister’s position is that, since the Arquette residence never
sold in 2007, the expenses claimed by the Appellant cannot be allowed pursuant
to the wording of paragraph 62(3)(f) which refers to a “sale” but does not
encompass a deemed disposition.
[8] The wording contained in paragraph 62(3)(f)
of the Act states, and I will read that into the record:
62.(3) In subsection (1), “moving expenses”
includes any expense incurred as or on account of
…
62.(3)(f) where the old residence is sold
by the taxpayer or the taxpayer’s spouse or common-law partner as a result of
the move, the cost to the taxpayer of legal services in respect of the purchase
of the new residence and of any tax, fee or duty (other than any goods and
services tax or value‑added tax) imposed on the transfer or registration
of title to the new residence,
…
[9] The wording contained in paragraph 62(3)(f)
is straightforward and unambiguous. It clearly refers to a sale of a residence
which, according to the Shorter Oxford English Dictionary, defines the word “sold”
as “disposed of by sale”. The only word employed in this provision is the word
“sold” and in applying a plain language interpretation to paragraph 62(3)(f),
it would be inappropriate to extend the word beyond what the provision clearly
purports to do and what Parliament intended. A variety of other words could
have been used in paragraph 62(3)(f) to extend the meaning to be given to the
provision but, since it does not do so, it is inappropriate to extend the
meaning of sold to include a deemed disposition as the Appellant would have me
do. The language contained in each of these provisions is entirely different
and there is no intent or specific language in either provision that directs
one to reference or incorporate in any way the other provision.
[10] Counsel for the Respondent referred me to
the case of Havlik Enterprises Ltd. v. M.N.R., 89 D.T.C. 159, where
Justice Rip, as he then was, in discussing the words “deemed to have paid” quotes
J. Beetz in The Queen v. Verrette, [1978] 2 S.C.R. page 845, as follows:
A deeming provision is a statutory fiction;
as a rule it implicitly admits that a thing is not what it is deemed to be but
decrees that for some particular purpose it shall be taken as if it were that
thing although it is not or there is doubt as to whether it is. A deeming
provision artificially imports into a word or an impression an additional
meaning which they would not otherwise convey beside the normal meaning which
they retain where they are used …
[11] Pursuant to subsection
45(1), where the Arquette
residence changed its use from a principal residence to a rental income
producing property, while title to the asset remained with the Appellant, it is
not a sale as contemplated by paragraph 62(3)(f) except where subsection 45(1)
has deemed it to be disposed of and therefore a transaction attracting tax
consequences which it otherwise would not. However, paragraph 62(3)(f)
contains straightforward language by employing the word “sold” and the facts
which were agreed upon disclose that the Appellant did not sell the Arquette
residence in 2007 when he acquired his new residence in Cache Bay. Therefore,
the amounts claimed cannot be selling costs in respect of the sale of the
Arquette residence within the meaning of paragraph 62(3)(f) and, as such,
are not deductible.
[12] For these reasons, the appeal is dismissed
without costs.
Signed at Ottawa, Canada, this 19th day of February 2010.
“Diane Campbell”
CITATION: 2010 TCC 76
COURT FILE NO.: 2009-2399(IT)I
STYLE OF CAUSE: Kenneth I. Renaud and
Her
Majesty The Queen
PLACE OF HEARING: Windsor, Ontario
DATE OF HEARING: December 3, 2009
REASONS FOR JUDGMENT BY: The
Honourable Justice Diane Campbell
DATE OF ORAL JUDGMENT: December 4, 2009
APPEARANCES:
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Agent for the
Appellant:
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Richard J. Masse
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Counsel for the
Respondent:
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Jack Warren
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COUNSEL OF RECORD:
For the Appellant:
Name:
Firm:
For the
Respondent: John H. Sims, Q.C.
Deputy
Attorney General of Canada
Ottawa, Canada
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