Citation: 2013 TCC 325
Date: 20131011
Docket: 2013-760(GST)I
BETWEEN:
ELANCHCHELVI SIVAKUMAR,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR JUDGMENT
(Edited from the transcript of Reasons for Judgment delivered orally from
the Bench on September 9, 2013 at Toronto, Ontario)
Campbell J.
[1]
Let the record show then that I am
delivering oral reasons in the appeal of Ms. Sivakumar, which I heard earlier
today.
[2]
The issue in this appeal is
whether the Appellant is entitled to a new housing rebate under the Excise
Tax Act. The issue is dependent on whether the Appellant acquired the
subject property for use as her and her family's primary place of residence.
The property at issue is located at 6 Blairmore Terrace in Brampton.
[3]
The offer to purchase was signed
on October 8, 2009. The original closing date was scheduled for June 24 of the
following year, 2010, but the builder delayed the closing until October 22,
2010.
[4]
The Appellant testified that, on
October 20, two days prior to the closing, they completed an inspection of the
property, at which time they raised safety concerns with the builder over attic
hatches in the loft and the low location of a window. The concerns were in
respect to their youngest daughter, age 3 at that time.
[5]
During this period, the family,
together with the Appellant’s parents, were residing at 5 Eastway, which had
been purchased as a residence on July 6, 2005. According to the Appellant, she
and her husband “partially” – and those are her words – moved into the Blairmore
property, but the two daughters continued to reside with her parents at the
Eastway property.
[6]
In her explanation to me of what
she meant by “partially move in”, she stated that curtains were installed and a
bed was placed at the property. The Blairmore property was listed for sale on
December 8, 2010, approximately six weeks after possession and title had been
transferred to the Appellant.
[7]
Throughout this period, Eastway
continued to be listed as their mailing address.
[8]
The Blairmore property was sold on
March 17 of the following year, 2011, for a profit of approximately $85,000.
When the Blairmore property was purchased, the Appellant assigned the rebate to
the builder and, consequently, the builder credited the Appellant with the
amount of the rebate which, in this appeal, is in excess of $24,000.
[9]
The Appellant's rebate application
was denied because she did not acquire the Blairmore property for use as her
primary residence.
[10]
During the period in late 2010,
and subsequently in 2011 and 2012, there were three other properties that the
Appellant acquired in addition to the Eastway and Blairmore properties.
[11]
On October 4, 2010, the Appellant
signed an agreement of purchase and sale for 4 Apple Valley Way. This was just
prior to her purchase of the Blairmore property on October 22, 2010. The Apple Valley property was transferred on November 8, 2011.
[12]
On February 6, 2011, the Appellant
signed an agreement of purchase and sale in respect of 6 Gentry Way, which was
transferred on October 18, 2011.
[13]
Finally, the Appellant signed an
offer of purchase and sale on January 24, 2011, for 45 Education Road, which
was transferred on May 3, 2012.
[14]
Rebates were applied for and paid
in respect to all of these properties, including the initial Eastway property.
[15]
The Appellant testified to a
number of things, including the fact that it was the intention of both she and
her husband that the Blairmore property was to become their primary residence
because the Eastway property had become too small for their family. She also
stated that the safety concerns at the inspection of Blairmore were put in
writing to the builder.
[16]
However, the Appellant did little
else to support these assertions and, to satisfy her burden of proof, which is
to establish evidence that would lead me to conclude that some of the most
crucial assumptions made by the Minister in the Reply to the Notice of Appeal
are incorrect and/or incomplete.
[17]
She did not meet the onus which is
upon her in this appeal. She could have corroborated her statements of the
safety concerns by producing a copy of what she claims she wrote to the builder
at the time of inspection. Her husband could have been called as a witness to
corroborate her testimony. Her parents may also have assisted in my
determination of the Appellant’s subjective purpose and intent respecting the
Blairmore property.
[18]
As former Chief Justice Bowman of
this Court stated, at paragraph 10 in the case of Coburn Realty Ltd. v The
Queen, 2006 TCC 245, “…(t)he actual use is frequently the best evidence of
the purpose of the acquisition.” It is not that evidence in the form of
statements alone by an appellant may not suffice, but it is always preferable
that corroborating evidence be provided where available; assertions without
supporting evidence will generally be insufficient to overcome assumptions of
fact when the onus is upon an appellant.
[19]
When I see the timelines and
dealings with these five different properties over a very short period of time,
it leads to a conclusion that the Appellant is involved in investing in
properties, at the very least, and at the most, in a so-called
“flipping” of properties.
[20]
Her actions support an investment
history and an investment strategy.
[21]
It is also noteworthy that, just
several weeks prior to taking possession and title to the Blairmore property,
the Appellant made an offer of purchase on the Apple Valley property, which
eventually became her residence.
[22]
Between October 22, 2010, and
March 17, 2011, which was the period of ownership of the Blairmore property by
the Appellant, I believe the Appellant's primary residence would have been
either her Eastway property, where her children continued to reside and where
apparently most of the furnishings remained, or the newly acquired Apple Valley property.
[23]
That, however, is not the issue
before me, nor is it an issue of whether or not the Blairmore property was a
commercial project. The issue is simply whether I believe the Appellant's
assertions that the Blairmore property was the family’s primary residence during
this period and I do not accept that this property was ever intended to be a
primary residence for the family. There may have been a brief, fleeting intent
on the Appellant's part, but it never came to full fruition, particularly with
the execution of the October 4 offer on the Apple Valley property.
[24]
I am still not sure what the
Appellant meant by her explanations of “partially” moving in. I have no
evidence, in fact, that she and her husband actually resided in this property
for any nights, and she referred to only moving a bed or beds in, and putting
up drapes. These are not actions that make a property a primary residence.
[25]
The family, as a unit, continued
for the most part to be primarily based out of their Eastway residence,
according to the evidence. The Appellant stated that she listed the Blairmore
property to “test the market.” That statement and the actions of listing the
property so quickly, together with the execution of an offer of purchase and
sale on the Apple Valley property, are all indicative of an investment property
and strategy and not supportive of her assertion that the Blairmore property
was a primary residence.
[26]
Although, as Respondent counsel
pointed out, there can be mitigating factors that a court may consider that can
frustrate a taxpayer's intent and purpose to have a property as their primary
residence, such circumstances do not exist in this appeal. I view such
mitigating factors, which are absent in this appeal, as those over which an
individual has little or no control, such as a loss of a job, illness, death or
necessary relocation.
[27]
Although I recognize that
children’s safety issues are legitimate concerns, I also believe that attic
hatches and one low window could have been secured in a reasonable fashion if
the Appellant’s true intent had been to obtain and use the Blairmore property
as the family’s primary residence.
[28]
Therefore, I am dismissing the
Appellant’s appeal, without costs, because I do not accept her assertions and
statements that the Blairmore property was intended to be her primary residence
in light of the evidence which supports an alternate conclusion.
[29]
Those are my Reasons in the appeal
from this morning, and that concludes the work for the Tax Court for today,
until tomorrow morning at 10:30. Thank you.
Signed
at Ottawa, Canada this 11th day of October 2013.
“Diane Campbell”
Email this Content