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Citation: 2004TCC434
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Date: 20040618
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Docket: 2003-2480(IT)I
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BETWEEN:
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NORMAN CARR,
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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
Lamarre, J.
[1] This is an appeal from an
assessment under the Income Tax Act
("Act") made by the Minister of National Revenue
("Minister") for the appellant's 1999 taxation
year. The appellant claimed, among other things, a non-refundable
tax credit pursuant to subsections 118.1(1) and 118.1(3) of the
Act with respect to the gift of a Sabre 27 sailboat
("boat") to Formation L'Équipage Inc., a
registered charity ("Charity") within the meaning of
the Act. On October 27, 1999,
André Roegiers, N.A., advised the Charity that he had
been requested by the owner of the boat to survey and value it.
Mr. Roegiers established the value at $40,710[1] (Exhibit R-4). In reassessing
the appellant, the Minister revised the value of the boat down to
$27,000.
[2] The only issue before me is
whether the value of the boat exceeds the amount of $27,000
determined by the Minister for the purposes of computing a
non-refundable tax credit with respect to the gift of the boat to
the Charity.
[3] The appellant did not call Mr.
Roegiers to testify on the value that he assigned to the boat as
at October 27, 1999. He chose to rely on his own testimony and on
the Analysis of Sailboat Values provided by the respondent in
Schedule A to the Reply to the Notice of Appeal ("Schedule A
to the Reply"). The respondent called two witnesses: the
first witness was Ms. Nathalie Locas, a real estate appraiser
working for the Canada Customs and Revenue Agency
("CCRA"), who saw the boat in the course of the audit
and made some notes and took some photographs of it; the second
was Mr. Doug Dawson, an expert witness on the valuation of
boats in the marine industry, who evaluated the boat for the
respondent.
[4] The appellant explained that the
boat was constructed in Great Britain in 1975 and that the
prototype was built in 1969 by Eric White of Marine Construction
(U.K.) (Marcon). Between 1969 and 1979, 400 hulls were moulded
for this boat (see the History of the Sabre 27, in Exhibit A-1,
Tab 5). According to the appellant, the stay (the steel line that
is attached to the mast) is about four times as thick as a normal
stay found on many boats. It is attached to a double-sided
steel plate, which means that the boat is built to a much higher
level and standard of quality than an average sailboat in North
America. The boat is built for the ocean and meets the stringent
criteria of the Lloyd's Register of Shipping
("Lloyd's") classification society. According to
the appellant, the Lloyd's certification means that a boat is
built to withstand the worst storm recorded in the previous
hundred years. He said that most boats are not Lloyd's
certified, as that is not a requirement, but his boat was so
certified. The appellant also said that the boat had an inboard
Volvo Penta diesel motor, which gave the boat a higher value than
a gas motor would have, and that the interior was finished in
teak.
[5] The appellant, who grew up in
England and has been sailing since boyhood, purchased the boat in
1987 for $24,000 from a friend who had had it shipped over to
Canada from the U.K. This friend was the sole owner of the boat
prior to the appellant. It had never seen salt water, having
always been in the Ottawa River. The appellant moved the boat to
the Nepean Yacht Club, added equipment to it and sailed it for 12
years. In 1999, he decided to sell it. He approached Robert
Blain, president of Nautilus Yachting, the broker who had in the
past sold for him another, smaller boat, a Tanza 22, for a price
close to the asking price. Mr. Blain had never had a Sabre 27 to
sell in his 20 years of selling boats (see Exhibit A-1, Tab
10). Mr. Blain was not in Court to testify as neither
counsel for the respondent nor the appellant was able to contact
him. It would seem, however, that Mr. Blain told the
appellant that, according to his own experience, nobody in the
Ottawa market would recognize the value of the boat, and
convinced the appellant that he would not get for it what he felt
it was worth. They therefore both came up with a value of $27,000
for the purposes of selling it locally (see appellant's
testimony, page 32 of the transcript).
[6] The boat was put up for sale in
July 1999 and remained on sale for three months without a single
offer being made. The appellant said that Mr. Blain then
suggested that there was a viable way of disposing of the boat
that might enable him to realize fair market value. This was to
give the boat to a charity recommended by Mr. Blain (see
questionnaire filled in by the appellant, Exhibit R-1, Tab 1
and page 32 of the transcript). The appellant was under the
impression that Mr. Blain made the arrangements to have Mr.
Roegiers, the independent marine surveyor for the Charity, come
in and evaluate the boat. The appellant assumed that he would
have been a "reasonable expert". The appellant thought
that, after the boat was valued, Mr. Blain had it shipped to
Halifax, N.S. It was shipped at the appellant's expense, and
the appellant then received a tax receipt (see pages 34-35 of the
transcript). At that time, the boat was, in the appellant's
words, in pristine condition.
[7] The appellant said that he had no
reason to believe that the boat was overvalued at $40,710.
Indeed, he identified on the Internet a few similar boats in the
U.K. that were advertised for sale at anywhere from $32,000 to
$50,000 (see Exhibit A-1, Tab 8). However, those figures are
asking prices for boats in 2004. He also relies on the Analysis
of Sailboat Values provided by the respondent in Schedule A to
the Reply, which shows asking prices for boats similar to his
ranging from 10,500 to 16,950 pounds, or from $25,000 to $40,700
(according to the conversion rate given by the respondent).
[8] The respondent called Ms. Nathalie
Locas, a real estate appraiser with the CCRA. Her assistance had
been requested by Mr. Jean Lavallée, a tax avoidance
auditor, and by headquarters for real estate appraisals in
Ottawa. They were auditing 100 taxpayers that had, between 1996
and 2000, donated boats to the Charity in exchange for tax
receipts. Ms. Locas's mandate was to verify that the
amount indicated as the fair market value of the boats on the tax
receipts was appropriate. Although she has personal experience in
sailing and had personally owned a sailboat in the past, she did
not appraise the boats herself. Her role was limited to handling
the files with respect to the valuation of the boats. She was
asked to inspect the boats with Mr. Lavallée and to
give the relevant information to the boat appraiser, Mr. Doug
Dawson, who was hired by the CCRA to give a fair evaluation of
the 100 boats under scrutiny, including the appellant's boat.
Mr. Dawson, who runs a business under the name of Computer Boat
Values, had provided Ms. Locas with a Sail Boat Evaluation
Request Form and had asked her to fill in part of it after having
seen the boats (see Exhibit R-1, Tab 2).
[9] Ms. Locas said that she and the
auditor, Mr. Lavallée, spent four days in
New Brunswick in October 2000 inspecting most of the 100
boats (including the appellant's).[2] To start with, she and Mr.
Lavallée spoke to Mr. Régis Lévesque, the
person in charge at the Charity, and to Mr. Roegiers, their
appraiser. The latter explained that the boats were appraised by
adding up the value of each different part of the boat (the sail,
the mast, the keel, the hull, etc.), instead of appraising the
boat as a whole. In other words, he assumed that each of the
boat's parts would be sold separately for its full value and
that they would all be sold at the same time. Mr. Roegiers told
them that he had appraised all the boats. He explained that he
usually received a phone call from the owner or the broker, who
would provide him with the information on the boat by phone. He
then determined the value of the boat without having seen it. Ms.
Locas understood that the boat was then transported to the
Charity's site in New Brunswick. Ms. Locas was not aware
whether that was how Mr. Roegiers appraised the
appellant's boat in particular, but she did not have any
indication that it was treated differently than the other
boats.
[10] Ms. Locas and Mr. Lavallée spent
an average of 15 minutes looking at each boat. She took
photographs from outside and inside the boat (Exhibit R-2). When
she herself visited the boats, the masts, the sails and all
electronic equipment had been taken out for security reasons.
Nevertheless, for many boats she could use the description given
by Mr. Roegiers in the notes he made at the time he did the
appraisals, regarding such things as the equipment and the sails
that were on the boat at the time of the gift. However, in the
case of the appellant's boat, it seems that Mr. Roegiers did
not make a complete appraisal; at least, Ms. Locas did not have
the benefit of a full description of the boat provided by
Mr. Roegiers. She therefore relied on the questionnaire
filled in by the appellant at the request of the CCRA, in which
he gave a description of his boat and its equipment (see Exhibit
R-1, Tab 1). Most of this information is found in the Evaluation
Request Form filled out by Ms. Locas and Mr. Dawson (see Exhibit
R-1, Tab 2) and in the note filled out by her and attached
to the form sent to Mr. Dawson (Exhibit R-3). Ms. Locas indicated
that the boat was in average condition when she saw it. In so
evaluating the condition of the boat, she did not look at the
exterior of it because it had been sitting uncovered and exposed
to bad weather conditions for a year. She determined the boat to
be in average condition on the basis of the state of the interior
(the wood finish, the cushions and the curtains inside the boat)
and by comparing it to that of other boats. She said that of the
100 boats she inspected, there were only a few that were extra
clean. Most of them were in average and some were in rough
condition.
[11] In cross-examination, she recognized
that she had indicated that the boat had an alcohol stove, but
did not dispute that it could have been a propane stove. She also
admitted that she did not smell diesel from the engine, which,
according to the appellant, is indicative of the condition of the
boat with respect to the cleanliness of the motor. Ms. Locas said
that in any case the boat had remained unused for one year.
[12] Ms. Locas also said that she did not
notice the hull certification stamped in the fibreglass of the
boat, but said that she saw such certification on most of the
boats constructed after 1980. Nor did she see the mark on the
exterior of the hull or get the model name, which in the
appellant's view was because she did not allot enough time to
each boat. However, she certified that she inspected the
appellant's boat, as each boat bore a tag with a number
corresponding to the number appearing on the tax receipt
pertaining to each taxpayer.
[13] Ms. Locas finally said in
cross-examination that she was aware that approximately five
boats out of the 100 donated to the Charity were sold to
different purchasers for a price established on the basis of the
value of the whole boat (as opposed to the value of the sum of
its parts). She said that the selling price in each of those
cases was less than the value assigned to the boat by
Mr. Roegiers, the Charity's appraiser (see pages 109 and
110 of the transcript). She recognized, however, that in the case
of the appellant's boat, she did not have a list of inventory
that would show how Mr. Roegiers came up with his valuation.
[14] The respondent also called Mr. Doug
Dawson to testify regarding his appraisal report (Exhibit R-5).
Mr. Dawson explained that he is the fifth generation of his
family to work in the marine industry. He said he was born and
raised at a marina, and was vice-president of Dawson's Marina
Ltd., a family boat sales business in Ontario. From 1967 to 1983,
he was responsible for sales and marketing in that business. They
were selling 500 boats a year, of which 10 per cent
were sailboats. He said that 49 per cent of the boating in Canada
is done in Ontario.
[15] In 1983, Mr. Dawson left the family
business and started up, along with his wife, a boat brokerage
business under the name of Computer Boat Values. They created the
concept of computer boat search, which is a multiple listing
service for all the boats for sale by the brokers or marinas
around the province that asked Mr. Dawson's firm to advertise
for them. Mr. Dawson said that they had 4,000 boats listed on
their database, which provided information on the size range, the
price range and the age range of the boats and on who had listed
them for sale. This database was available to Mr. Dawson's
clients, that is, the marinas and the brokers who paid him to
advertise their boats.
[16] In 1985, he and his wife created the
Boat Value Book ("Book") for the Canadian marine
industry, which supplied all the above-mentioned information but
provided the prices for which the boats sold in addition to the
asking prices. Since then, the Book has been reworked to give
only the average value of boats, which value is based on
thousands of actual selling prices reported by marinas and
brokers across Canada on a regular basis as part of the updating
process. These selling prices are posted to the database adjacent
to the appropriate boat, so the values in the Book are based on
actual sales in the market place (see Appraisal Report, Exhibit
R-5, page 13 of 14).
[17] Excerpts from the 1999 Book, which
contained over 27,000 retail values, were filed in evidence (see
Exhibit R-1, Tab 9 and Exhibit R-5, page 12 of 14). The Book
gives the retail price (which is the average selling price) and
the average trade-in value of about 4,000 boats that are
classified according to the name of the manufacturer, the model,
the size and the year of construction going back to 1970. The
Book also indicates the boat material (all are fibreglass) and
whether the motor is gasoline - or diesel - powered and whether
it is inboard or outboard.
[18] Mr. Dawson explained how he calculates
the retail value. Every three months, he gathers from the brokers
and marinas the selling prices of boats of the same size and age
range and he establishes the average value of a boat. If one
model is sold at a higher or lower price than the average, he
will verify with the broker who sold it to find out whether there
were improvements on the boat or, conversely, whether there might
be a particular problem with the boat. In such cases, he would
simply discount the extremes. Indeed, the retail value refers to
the boat as it was originally built, as far as the major
equipment is concerned. Mr. Dawson said that his Book covers 40
to 50 per cent of what is sold by marinas and brokers in Ontario.
He stated that out of the 4,000 selling prices that he gets, 80
per cent of them are within five points of his forecast value
from the previous year. In his view, this is indicative of a
solid, reliable database (see pages 126-27 and 168-70 of the
transcript). The Book reflects sales made by marinas and brokers
within Canada. It does not reflect sales made outside the country
in currencies other than the Canadian dollar.
[19] In 1991, Mr. Dawson's firm started
a boat evaluation service for financial institutions and
insurance companies, for financing and insurance purposes. Since
then, they have done about 12,000 boat evaluations (such as the
one at issue in this appeal). He explained that there is no need
to see the boat to do an evaluation as boats are built by
brand-name manufacturers to a specific length and marketed for a
specific year, in a fashion similar to cars (see Appraisal
Report, Exhibit R-5, page 6 of 14). Consequently,
boats fit easily into different categories (year, model, size,
type of motor). As long as all the pertinent information is
there, Mr. Dawson can, with the help of the Book, evaluate a
boat on the basis of the information provided, and then make
adjustments for new equipment added and further take into
consideration factors such as the condition of the boat, load
hours, etc. (see pages 130-31 of the transcript).
[20] With respect to the appellant's
boat, Mr. Dawson acknowledged that it was not listed in the Book.
Indeed, when a boat, like the Sabre 27 (of which there are very
few in Canada), is thinly traded and there are insufficient sales
data for that type of boat, it is not included in the Book. To
evaluate such a boat, he does a direct comparison analysis of
other boats of the same size and age. The boat has to fit in
somewhere close to similar major brands that are in the Book.
Here, Mr. Dawson took the average value of eight boats
similar in size and age and came up with an average retail value
of $13,700. The Sabre's quality and construction were factors
taken into consideration by adding seven per cent to
the average value of those eight boats to arrive at a value of
$14,700 for the appellant's boat (see pages 157-61 of the
transcript, where Mr. Dawson explains page 9 of his
Appraisal Report). In so doing, Mr. Dawson took into account the
higher quality of the British-built Sabre. He then added $400 for
the 1999 retail value of the electronic equipment listed on the
appellant's questionnaire attached to the Sail Boat
Evaluation Request Form. He explained that an accessory is worth
45 per cent of its initial value once it has been
installed on the boat and further depreciates by ten per cent
annually. The retail value of the equipment in 1999 ($400) is
based on a grid created using a long list of accessories, which
is reproduced in the Book. By adding that $400 to the base value,
he came up with a fair market value of $15,100 for the boat (see
pages 172-73 of the transcript).
[21] At the hearing, Mr. Dawson admitted
that he evaluated the boat on the basis that it had a gas motor.
He acknowledged that a diesel motor would have raised the value
of the boat by approximately $1,000 back in the 1970s. As half of
the boats used for comparison purposes had gas engines and half
of them had diesel, he determined that the value of the boat
should be increased by an extra $500 (half of $1,000), thus
bringing the base price up to $15,600 (see
pages 174-77 of the transcript).
[22] Furthermore, on the basis of the
appellant's testimony that the boat was in extra clean
condition when it was transferred to the Charity, Mr. Dawson
concluded that would add a further $900 to the boat's value.
He explained this by saying that for a boat in extra clean
condition five and a half per cent is added to the base price,
which in this case is $15,600 (see page 182 of the
transcript).
[23] He also determined that the value
should be raised by another $575 to take into account the fact
that the boat had a propane stove and a genoa (foresail), which
information he did not have at the time he did the evaluation. He
thus came up with a value of $17,100 (see pages 179-82 of
the transcript).
[24] As the value of a boat can fluctuate by
five per cent either way, he added an extra five per cent to come
up with the highest potential value of the boat, namely $18,000
(page 186 of the transcript). In cross-examination, Mr.
Dawson said that he did not spend much time looking for
equivalent values on the Internet. He admitted that he went to
only one or two sites but said that, in any event, the prices
indicated there would be asking prices in 2004, which do not
reflect the real value of a boat in 1999. Furthermore, he had to
determine the value of the boat in relation to the Canadian
market, i.e. the price it would be sold at in Canada, not in the
U.K. as suggested by the appellant. He added that in the case of
someone in Canada who wanted to sell a boat outside Canada, one
would have to add the transportation cost (said by Mr. Dawson to
be $7,000 for shipping to the U.K.), which would reduce the value
of a boat sold for export. Indeed, he has never in his career
seen a sailboat from Ontario sold to someone in the U.K. and, in
his opinion, the expense involved in shipping the boat across the
ocean has something to do with that. On the other hand, Americans
have bought boats in Canada in quite significant numbers since
the Canadian dollar has been really low compared to the U.S.
dollar. But all these sales to Americans have been entered in the
Book in Canadian dollars, because that is how they were reported
by the brokers (see pages 215-16 of the transcript).
[25] Mr. Dawson also admitted that the
seaworthiness of a boat might raise its value. Indeed, such was
the case with the 1978 26-foot Contessa, one of the eight boats
compared to the Sabre 27. That boat's value rose by $5,000
from 1999 to 2000 because a boat of the same make (a 32-foot
Contessa) had sailed around the world and that drove up the price
of the 26-foot Contessa (see Appraisal Report, Exhibit R-5, page
9 of 14). Nevertheless, Mr. Dawson is of the view that
sales of boats used in fresh water cannot be compared with sales
of boats used in salt water. Salt water deteriorates a boat
faster; however, not many such boats are seen in Ontario, so that
is something they do not have to deal with. Still,
Mr. Dawson said that there would be only a five per cent
difference in value between the boats used in fresh water and
boats used in salt water (see pages 194-95 of the
transcript).
[26] Mr. Dawson also said that the hours on
a motor are not taken into consideration for sailboats as these
do not have hour metres, unlike powerboats. Consequently, it is
not really useful to have a diesel motor on a sailboat, and the
presence of one does not necessarily raise the boat's value
(see pages 198-200 of the transcript).
Analysis
[27] The respondent's evidence is that
the highest potential value of the boat at the time of the
donation on October 27, 1999, was $18,000. However, the appellant
was reassessed on the basis that its value was $27,000. In the
Reply to the Notice of Appeal, the respondent stated that
although, in her expert's opinion, the value of the boat is
lower, a final fair market value of $27,000 was determined based
on the prices indicated in the Analysis of Sailboat Values in
Schedule A to the Reply. At the hearing, counsel for the
respondent stated that he did not rely on the Analysis but relied
only on his expert witness in arguing that the value cannot be
greater than the $27,000 already assessed. Counsel said that the
value of $27,000, which was the asking price when the boat was
for sale, was accepted by the CCRA as a result of negotiations
with the appellant.
[28] On the other hand, the appellant said
that he did not call Mr. Roegiers, who had evaluated his boat at
$40,700, because the Analysis of Sailboat Values attached to the
Reply to the Notice of Appeal was, in his view, favourable to his
case. Indeed, we see there that four Sabre 27s built between 1972
and 1979 were offered for sale at prices varying between 10,500
and 16,950 pounds, which the CCRA had converted to $25,240 to
$40,744. Moreover, the Analysis also provides figures respecting
the asking prices for four Sabre 28s built between 1970 and 1976.
Those asking prices vary from US$14,600 to US$20,000. The
respondent, however, applied an exchange rate of $1.25 per U.S.
dollar, which in the appellant's view is inaccurate.
[29] The case law is clear that the
determination of fair market value is a question of fact rather
than a question of law (see CIT Financial Ltd. v. The
Queen, 2004 F.C.A. 201, at paragraph 13).
[30] Fair market value is not defined in the
Act. However, the judicial definition accepted by the
courts in Canada is that of Cattanach J. in Henderson Estate
and Bank of New York v. M.N.R., 73 DTC 5471 (F.C.T.D.), at
page 5476:
The statute does not define the expression "fair market
value", but the expression has been defined in many
different ways depending generally on the subject matter which
the person seeking to define it had in mind. I do not think it
necessary to attempt an exact definition of the expression as
used in the statute other than to say that the words must be
construed in accordance with the common understanding of them.
That common understanding I take to mean the highest price an
asset might reasonably be expected to bring if sold by the owner
in the normal method applicable to the asset in question in the
ordinary course of business in a market not exposed to any undue
stresses and composed of willing buyers and sellers dealing at
arm's length and under no compulsion to buy or sell. I would
add that the foregoing understanding as I have expressed it in a
general way includes what I conceive to be the essential element
which is an open and unrestricted market in which the price is
hammered out between willing and informed buyers and sellers on
the anvil of supply and demand. These definitions are equally
applicable to "fair market value" and "market
value" and it is doubtful if the use of the word
"fair" adds anything to the words "market
value".
[31] In his Appraisal Report,
Mr. Dawson defines fair market value as being the highest
price available in an open market between informed, prudent
parties acting at arm's length and under no compulsion to
act, expressed in terms of money or money's worth.
[32] The appellant argued that here the
highest price available in an open market is reflected by the
asking prices for boats similar to his. In his view, an open
market is not restricted to Canada: one has to look at the
highest price asked for boats of similar quality, age and size
anywhere in the world. Relying on his own research regarding
prices asked for such boats in the U.K. (see Exhibit A-1, Tab 8)
and the respondent's Analysis of Sailboat Values in Schedule
A to the Reply, the appellant contended that the value of $40,700
determined by Mr. Roegiers is not out of line. This value
is, in his view, all the more realistic since the Sabre 27 is a
seagoing, Lloyd's certified boat. Such seaworthiness factors
increase the value of a boat, as was seen with the 26-foot
Contessa (1978), which is one of the boats listed by
Mr. Dawson in his direct comparison analysis in his
appraisal report (see Exhibit 5, page 9 of 14).
[33] In Klotz v. The Queen,
2004 TCC 147, 2004 DTC 2236, Bowman A.C.J.
pointed out in paragraph 52 that the Canadian authorities
are clear that the best evidence of value is the actual sale of
the very property. Bowman A.C.J. also stated the following in
Klotz, at paragraphs 33, 49, 51 and 52:
[33] . . . To call no expert witnesses in a valuation case can
be a risky manoeuvre. Nonetheless, the court is not bound to
accept any expert's opinion and ultimately the court must
make its own determination of value based on all of the
evidence.
. . .
[49] . . . In determining fmv [fair market value] we are not
directed to any particular market.
. . .
[51] Counsel also referred to Goldstein v.
Commissioner, 89 T.C. 38, and to Chiu for
the propositions that neither price lists nor a few isolated
gallery sales establish fmv. These propositions seem to me to be
rather self-evident and require no further authority.
[52] The United States and Canadian authorities are both clear
that the best evidence of value is the actual sale of the very
property.
[34] Here, the appellant relied mostly on
asking prices in the U.K. for boats similar to his (see Exhibit
A-1, Tab 8) and in the U.S.A. (see Schedule A to the Reply).
These are not the prices at which the boats were actually sold.
As Bowman A.C.J. points out above, price lists (or asking prices)
do not establish fair market value.
[35] In Schedule A to the Reply, the
respondent shows nine sales of boats. No explanation was given
regarding those sales, as counsel for the respondent did not rely
on them at the hearing in arguing his case. Nor did the appellant
ask any questions concerning the figures provided, but he still
wants to rely on them. Therefore, I can only presume that the
selling prices indicated refer to boats comparable to the
appellant's. It should be noted, however, that none of those
boats was sold for more than US$20,000. The respondent used a
conversion rate of $1.25, but the appellant has provided the
conversion rate from the Bank of Canada for the fall of 1999 (see
Exhibit A-1, Tab 11). It was approximately $1.48 at that time. If
one applies that rate to the highest selling price indicated in
the Analysis of Sailboat Values provided by the respondent in
Schedule A to her Reply - US$20,000 for a Sabre 28
built in 1976 - the result is $29,600. This value is much closer
to the value ($27,000) assigned to the boat by the respondent in
the reassessment than that ($40,700) established by Mr. Roegiers
for the appellant. In this context, it is not sufficient for the
appellant to rely solely on the Analysis of Sailboat Values
provided by the respondent in filing her Reply to the Notice of
Appeal. The appellant is not an expert witness and is not in an
ideal position to defend Mr. Roegiers's appraisal.
[36] The respondent had an independent
expert witness who is the author of the reference Book on boat
values in the Canadian marine industry. Mr. Dawson said that he
did not have to deal with sales in the U.K. In fact, he had never
heard of sailboats being sold from Canada to U.K. The same is
true of the appellant's broker, Mr. Blain, who, incidentally,
according to the appellant's testimony, convinced him that he
should not put his boat on sale for more than $27,000. As a
matter of fact, the appellant did not get a single offer for his
boat at that asking price. The appellant himself had paid
$24,000, twelve years earlier, in 1987.
[37] In my view, the method used by Mr.
Dawson, although not perfect, is much more reliable than the
appellant's as it is based on an average of actual selling
prices. They are the real value obtained for comparable boats, as
opposed to asking prices, which are what the appellant referred
to. Furthermore, Mr. Dawson revised the initial value he had
given and adjusted it to take into account certain factors that
he was unaware of at the time of the appraisal. Still, he did not
appraise the boat at more than $18,000.
[38] The fact that Mr. Dawson did not see
the boat is not, in my view, crucial. Indeed, he explained that
in his business, there is no real need to see a boat as long as
all the pertinent information is provided. Besides, it seems that
Mr. Roegiers had used the same approach, as he apparently
told Ms. Locas that he provided his evaluation based on
information given to him over the phone. Mr. Roegiers was
not at the hearing to confirm this. However, it is the appellant
who should have called Mr. Roegiers to testify as to how he did
arrive at the conclusion that the boat had a value of $40,700.
The only evidence presented was a letter dated October 27, 1999,
stating that the value of the boat was $40,700, without any
explanation (Exhibit R-4), which is far from convincing.
[39] In my view, there was ample evidence
adduced by the respondent to allow me to conclude that the
boat's value did not exceed $27,000. The appellant did not
present sufficient reliable evidence to the contrary.
[40] The appeal is therefore dismissed.
Signed at Ottawa, Canada, this 18th day of June 2004.
Lamarre, J.
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