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Docket: 2002-440(GST)I
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BETWEEN:
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LISE THOMPSON,
GINETTE THOMPSON
and DIANE ROY,
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Appellants,
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and
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HER MAJESTY THE QUEEN,
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Respondent.
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_______________________________________________________________
Appeal on September 17, 2002 at Montréal, Quebec
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Before: The Honourable Judge François Angers
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Appearances:
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For the Appellants:
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Lise Thompson
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Counsel for the Respondent:
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François Marcoux
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_______________________________________________________________
[OFFICIAL ENGLISH TRANSLATION]
JUDGMENT
The appeal from the assessment made under the Excise Tax Act, notice of which is dated February 19, 2001, is dismissed.
Signed at Edmundston, New Brunswick, this 11th day of March 2003.
J.T.C.C.
Translation certified true
on this 28th day of January 2004.
Carol Edgar, Translator
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Citation: 2003TCC119
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Date: 20030311
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Docket: 2002-440(GST)I
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BETWEEN:
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LISE THOMPSON,
GINETTE THOMPSON
and DIANE ROY,
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Appellants,
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and
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HER MAJESTY THE QUEEN,
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Respondent.
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[OFFICIAL ENGLISH TRANSLATION]
REASONS FOR JUDGMENT
Angers, J.T.C.C.
[1] Before the Court is an appeal from an assessment made under the Excise Tax Act ("the Act") disallowing the rebate of the Goods and Services Tax ("the GST") on new housing claimed by the appellants. Lise Thompson appealed first but, with the consent of the respondent, Ginette Thompson and Diane Roy were added as appellants.
[2] The appellants admitted the facts on which the Minister relied in making the assessment, that is, that the appellants are particular individuals who had a complex constructed and that this complex is a triplex. The respondent disallowed the rebate claimed by the appellants on the ground that the residential complex constructed was not a single unit residential complex as defined in subsection 256(1) of the Act.
[3] On August 8, 2000, the three appellants purchased a lot in undivided ownership, in the proportion of 33 1/3 per cent each. They wished to purchase it in divided ownership but were obliged to wait before making this change, and it was only in October 2000 that they took steps to convert their property to a complex in divided co-ownership.
[4] The appellants had previously signed a contract with the vendor of the lot for the construction of a triplex. According to this contract, the work began on June 15, 2000 and ended on November 1, 2000. The November 1, 2000 certificate of execution of the work indicates that the building was not held in divided co-ownership. The appellants therefore took steps to convert the triplex into a complex in divided co-ownership; on January 15, 2001, they obtained the required location certificates; and finally, on March 7, 2001, the act constituting the divided co-ownership was registered. On March 8, 2001, the appellants signed the deed of transfer of each unit to its respective owner, giving each person her private portion and a share of the common portion as set out in the March 7 act constituting the divided co-ownership.
[5] The respondent stated that, when the work was completed, the complex did not correspond to the definition of "single unit residential complex" set out in subsection 256(1) of the Act. The amount of the rebate is not at issue.
[6] Under subsection 251(1) the appellants would be eligible for a rebate if they satisfied the requirements of subsection 256(2). Subsection 256(2) reads as follows:
256.(2) Where
(a) a particular individual constructs or substantially renovates, or engages another person to construct or substantially renovate for the particular individual, a residential complex that is a single unit residential complex or a residential condominium unit for use as the primary place of residence of the particular individual or a relation of the particular individual,
[...]
the Minister shall [...] pay a rebate to the particular individual [...]
[7] The definition of the expression "single unit residential complex" is found in subsection 123(1) of the Act and reads as follows:
"single unit residential complex" means a residential complex that does not contain more than one residential unit, but does not include a residential condominium unit;
[8] Did the appellants have a single unit residential complex constructed? Before the March 7, 2001 act constituting the divided co-ownership was established, the complex the appellants had constructed contained more than one residential unit. According to article 1038 of the Civil code of Québec, divided co-ownership of an immovable is established by publication of a declaration under which ownership of the immovable is divided into fractions belonging to one or several persons. Thus what was involved is not the construction of a single unit residential complex. Nor is it a residential condominium unit until the space of each residential unit is bounded as a separate unit, as is provided for in the definition of "residential condominium unit":
"residential condominium unit" means a residential complex that is, or is intended to be, a bounded space in a building designated or described as a separate unit on a registered condominium or strata lot plan or description, or a similar plan or description registered under the laws of a province, and includes any interest in land pertaining to ownership of the unit;
[9] It appears clear to me from the evidence that the appellants' intent was indeed to have a single unit residential complex constructed for each of them; however, that same evidence also shows that that is not what happened. It is also true, in my opinion, that Parliament's intent was to ensure the rebate of part of the GST when a particular individual has a single unit residential complex constructed or substantially renovated for use as the primary place of residence of the particular individual (see definition). Therefore, if the co-owners had each had a single unit residential complex constructed, they would have been eligible for the rebate. In this case, that is not what happened.
[10] We therefore find ourselves in a situation where the wording of the Act does not allow a rebate of the tax, although it is evident that Parliament's intent was to allow this rebate. I am therefore unable, according to the facts and on reading the Act, to grant the appellants' request. However, I am able to suggest that the appellants take advantage of the legal provisions set out in section 23 of the Financial Administration Act, which I reproduce here:
23.(1) In this section,
[...]
"tax" includes any tax, impost, duty or toll payable to Her Majesty, imposed or authorized to be imposed by any Act of Parliament.
(2) The Governor in Council may, on the recommendation of the appropriate Minister, remit any tax or penalty, including any interest paid or payable thereon, where the Governor in Council considers that the collection of the tax or the enforcement of the penalty is unreasonable or unjust or that it is otherwise in the public interest to remit the tax or penalty.
[11] For these reasons, the appeal is dismissed.
Signed at Edmundston, New Brunswick, this 11th day of March 2003.
J.T.C.C.
Translation certified true
on this 28th day of January 2004.
Carol Edgar, Translator
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