Date: 20000524
Docket: A-288-98
SEXTON, J.A.,
MALONE, J.A.
BETWEEN:
GERALD BROWN
Applicant
- and -
HER MAJESTY THE QUEEN
Respondent
REASONS FOR JUDGMENT
(Delivered orally from the Bench at
Vancouver, B.C. on May 23, 2000)
MALONE J.A.
[1] This is an application under section 28 of the Federal Court Act for judicial review of the decision of the Honourable Judge W.D. Rowe of the Tax Court of Canada (the "Tax Court Judge") dated at Vancouver on March 20, 1998.
[2] The applicant was employed by Care Canada in 1994 and 1995 as a satellite technician in charge of satellite communications for the United Nations in the former Republic of Yugoslavia. Care Canada is a non-governmental, charitable organization with its head office in Ontario and provides humanitarian aid throughout the world. The Minister of National Revenue ("the Minister") disallowed the applicant"s claim for an overseas employment tax credit ("OETC") relative to his 1994 and 1995 taxation years.
[3] In his reasons for judgment the Tax Court Judge ruled that Care Canada did not fit within the requirements of subsection 122.3(2) of the Income Tax Act as defined by the Supreme Court of Canada1 (and subsequent court rulings relative to similar employers) as this was not a business enterprise and there was no reasonable expectation of profit.
[4] The grounds upon which this appeal is sought are 1) the Tax Court Judge refused to admit certain evidence critical to the issue of whether Care Canada was carrying on business, 2) the hearing was unfairly and summarily ended by the Tax Court Judge before the applicant had finished presenting his case and 3) Care Canada and its business qualify as a Specified Employer carrying on business outside Canada under s. 122.3(2) of the Act.
[5] With respect to the applicant"s submission that his case was somehow abridged by the presiding judge the transcript reveals that an attempt to enter a Department of National Revenue Policy Statement was refused. However, there is no indication, that argument on this issue was curtailed or that the applicant was prevented from submitting evidence or argument on any other issue. We find no error relative to the first two grounds of appeal.
[6] Turning to the final issue, the Minister has admitted that the applicant is a resident of Canada, was employed outside of Canada for more than six months and that Care Canada is a specified employer as defined in subsection 122.3(2) of the Act that carried on activities outside of Canada. What is not admitted is that Care Canada carried on business outside of Canada. The sole question before us, therefore, is whether the Tax Court Judge made any reviewable error in fact or law in determining that the applicant was not entitled to the overseas tax credit.
[7] In order to qualify for the OETC, the burden is on the applicant to show that his employer carried on business outside Canada so as to defeat the factual basis on which the Minister"s assessment rest.2
[8] It may well be that under its recruiting arrangement with the United Nations that Care Canada is operating exclusively for charitable purposes and falls within section 149.1 of the Act. Our difficulty is that the applicant did not call evidence from Care Canada officials to explain the essentials of this apparent commercial enterprise. Absent that evidence, we are unable to conclude from the trial record in this case that this is a related business permitted under s 149.1. Similarly, this lack of evidence prevents us from determining the applicability of the "carrying on business" test as altered by this Court on February 5, 1999 in the Timmins case.3
[9] The appeal will be dismissed. No costs were sought.
(Sgd.) " B. Malone"
J.A.
May 24, 2000
Vancouver, British Columbia
FEDERAL COURT OF APPEAL
NAMES OF COUNSEL AND SOLICITORS OF RECORD
STYLE OF CAUSE: Gerald Brown
v.
H.M.Q
PLACE OF HEARING: Vancouver, British Columbia
DATE OF HEARING: May 23, 2000
REASONS FOR JUDGMENT BY MALONE, J.A.
| CONCURRED IN BY: Linden, J.A. |
Sexton, J.A.
APPEARANCES:
| Mr. Gerald Brown For the Applicant |
| Ms. Elizabeth Junkin For the Respondent |
SOLICITORS OF RECORD:
Gerald Brown
| Burnaby, BC For the Applicant |
Morris Rosenberg
Deputy Attorney
| General of Canada For the Respondent |
Date: 20000524
Docket: A-288-98
CORAM: LINDEN, J.A.
SEXTON, J.A.
MALONE, J.A.
BETWEEN:
GERALD BROWN
Applicant
- and -
HER MAJESTY THE QUEEN
Respondent
Heard at Vancouver, British Columbia, on May 23, 2000
JUDGMENT delivered at Vancouver, British Columbia, on May 24, 2000
REASONS FOR JUDGMENT BY: MALONE, J.A.
__________________
1Moldowan v. The Queen [1978] 1 S.C.R. 480">[1978] 1 S.C.R. 480.
2Johnson v. M.N.R. 3 O.T.C. 1182 at p. 1183 (S.C.C.).
3Timmins v. Her Majesty The Queen, [1999] 2. F.C. 563 at p. 569-570 (F.C.A.)
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