Imperial Parking Ltd. v. The Queen, docket 98-348-GST-G

Date: 19981217

Dockets: 98-348-GST-G; 98-350-GST-G; 98-351-GST-G; 98-352-GST-G

BETWEEN:

IMPERIAL PARKING LIMITED,

Appellant,

and

HER MAJESTY THE QUEEN,

Respondent.

Reasons for Judgment

Beaubier, J.T.C.C.

[1] These appeals pursuant to the General Procedure were heard at Vancouver, British Columbia on December 10, 1998 together and on common evidence by consent of the parties. The Appellant called John Newsome, C.A., its Senior Vice-President, Finance. The Respondent called Frank Leung, an appeals officer for Revenue Canada. The Appellant has been assessed for GST respecting monies received on account of the violation notices placed on vehicles which parked either beyond their metered ticket time or parked without a metered ticket on one of its parking lots. These "overparkers" then paid an amount of $25 within 72 hours or a larger amount, for example $40, thereafter.

[2] The Appellant was assessed GST in respect to these payments to it. It objected, appealed and denied liability on the basis that the payments were in the nature of a fine or damages for trespass. The Appellant further stated that the use of the parking space does not constitute a "supply" and that the payments do not represent "consideration" for a "supply" all within the meaning of subsection 123(1) of the Excise Tax Act. Finally, the Appellant submitted that it was not in the business of providing parking spaces to persons who refuse to pay for that space.

[2] All of the appeals are similar. The evidence led related to the Vancouver appeal and in particular Exhibit A-1, Tab 172, Vancouver. For that reason, facts described will concentrate on the Vancouver premises.

[3] The assumptions in paragraph 14 of the Reply to the Notice of Appeal, No. 98-352(GST)G read as follows:

14. In so assessing the Appellant, the Minister relied on, inter alia, the following assumptions:

a) the facts stated and admitted above;

b) the Appellant is a GST registrant with GST Registration No. 12223266728;

c) the Appellant was a corporation involved in leasing properties and operating public metered parking on these properties;

d) the Appellant is required by the Excise TaxAct, R.S.C. 1985, c. E- 15, as amended (the "Act") to file its GST returns on a quarterly basis;

e) the Appellant did not obtain a Ruling from Revenue relating to this issue;

f) the signs in the Appellant's parking lots indicate that "if you park but do not display a valid ticket or pass the rate is $40.00 per day or portion thereof and your car may be subject to being towed. In either case, if you park here, Imperial Parking Limited considers you to have accepted their offer of a parking space. Do not park on this lot if you do not agree to these terms. Imperial Parking Limited does not by the levy of $40.00 exclude its right to tow any car parking or [sic] this lot without a ticket or a valid pass on the dash." (the "Sign")

g) a vehicle parked in accordance with the Sign is not trespassing, whether its ticket has expired or none was purchased;

h) the 'violation notices' referred to in the Notice of Appeal state that "As an alternative to towing, impounding or holding vehicles improperly parked on this property, Imperial Parking Limited is claiming $40.00 as minimal costs and damages." and that if it is paid within 72 hours it will be reduced to $25.00;

i) these 'violation notices' are issued after a car has already, in parking without displaying a valid pass or ticket, accepted the conditions set out in the Sign;

j) the Appellant is not a government or government agency of any kind and does not have any statutory or common law right to impose fines for parking;

k) the monies paid by persons who parked without displaying a valid pass or ticket in response to the Sign and 'violation notice' were recorded in the books and records of the Appellant as part of their general revenue from the daily operation of their commercial activity, to wit: parking lots;

l) the $40.00 amount referred to in the Sign and 'violation notice' and the alternative $25.00 referred to in the 'violation notices' are collected by the Appellant as consideration for parking services rendered;

m) these monies are derived from the ordinary commercial activity of the Appellant;

n) the parking services are a taxable supply;

o) the amounts collected by the Appellant by means of the Sign and 'violation notices' are not a fine or damage for trespass;

p) GST was included in the $40.00 or $25.00 collected from persons who had parked without a valid parking ticket; and

q) GST was not remitted to the Minister relating to these taxable supplies.

Subparagraphs 14 a), b), c), d), e), i), j), k) and q) are correct. The remaining paragraphs are in dispute.

[4] Each of the cases deals with a parking lot with a metered ticket dispenser. At the entry to each parking lot, directly above the ticket dispenser, there were two very large signs positioned so that the person stopping at the meter could read them. The top sign described the hourly, daily, and evening rate and the method of acquiring a ticket from the meter. The lower sign, which is also very large and very easy to read, reads as follows:

PLEASE READ CAREFULLY ... THIS IS PRIVATE PROPERTY

IMPERIAL PARKING LIMITED IS BY THIS SIGN, OFFERING SPACE FOR PUBLIC PARKING. YOU ACCEPT THIS OFFER BY PARKING ON THIS LOT. ALL REQUIREMENTS OF NOTICE AND ACCEPTANCE ARE HEREBY WAIVED BY IMPERIAL PARKING LIMITED.

IF YOU PARK, BUT DO NOT DISPLAY A VALID TICKET OR PASS, THE RATE IS $50.00 PER DAY OR PORTION THEREOF AND YOUR CAR MAY BE SUBJECT TO BEING TOWED. IN EITHER CASE, IF YOU PARK HERE, IMPERIAL PARKING LIMITED CONSIDERS YOU TO HAVE ACCEPTED THEIR OFFER OF A PARKING SPACE. DO NOT PARK ON THIS LOT IF YOU DO NOT AGREE TO THESE TERMS. IMPERIAL PARKING LIMITED DOES NOT BY THE LEVY OF $50.00 RATE EXCLUDE ITS RIGHT TO TOW ANY CAR PARKED ON THIS LOT WITHOUT A VALID TICKET OR PASS ON THE DASH.

Exhibit A-1 (172)

[5] There are a number of categories of people who are affected by the lower sign which is quoted. They include –

(a) persons who pay the $50 without going to court,

(b) persons who pay after going to court,

(c) persons who are towed.

The only persons who are the subject matter of this action are those in category (a) who pay. Each received a violation notice from the Appellant for parking outside of metered time. Each of these violation notices sets out the rate described on the sign, for example, $50, $40, or some similar rate. As a discount, each violation notice has these words:

PLEASE REMIT $40.00 (REDUCED TO $25.00 IF PAID WITHIN 72 HOURS OF ISSUE OF NOTICE).

Exhibit A-1, Tab 4

In the cases before the Court each payor is a person who has paid the $40 or the discounted sum of $25.

[6] Thus the Court is dealing with a discrete group: the persons who have paid the Appellant's rates as set forth in the sign or the Appellant's lesser rate as set forth on the back of the violation notice if payment is made within 72 hours. In the Court's view these two rates as set forth on the notice board and the violation notice constitute offers by the Appellant. Each person who parked accepted the offer on the sign. The offer consisted of a parking "rate ... per day or portion thereof". Acceptance by the payor created a contract for providing parking space, the consideration for which was the amount paid pursuant to the sign or the discount stated on the violation notice.

[7] Persons parking either without a ticket or over the time allotted in the ticket were common on each parking lot. Collection respecting overparking was a normal part of the Appellant's business. Thus, the amounts in question constitute a taxable supply.

[8] For these reasons, the appeal is dismissed. The Respondent is awarded party and party costs respecting each appeal except as to the hearing itself for which one set of costs is awarded.

Signed at Ottawa, Canada this 17^th day of December 1998.

"D.W. Beaubier"

J.T.C.C.