Date: 20111201
Dockets: A-445-10
A-446-10
A-447-10
A-448-10
Citation: 2011 FCA 336
CORAM: EVANS J.A
LAYDEN-STEVENSON
J.A.
STRATAS J.A.
BETWEEN:
GERALDINE ANTHONY,
JARROD BAKER,
LESLIE MORGAN,
HEATHER FRIESEN
Appellants
and
HER MAJESTY THE QUEEN
Respondent
Heard at Toronto,
Ontario, on December
1, 2011.
Judgment delivered from the Bench at Toronto, Ontario, on December 1, 2011.
REASONS FOR JUDGMENT OF THE COURT BY: LAYDEN-STEVENSON
J.A.
Date: 20111201
Dockets: A-445-10
A-446-10
A-447-10
A-448-10
Citation:
2011 FCA 336
CORAM: EVANS J.A.
LAYDEN-STEVENSON J.A.
STRATAS J.A.
BETWEEN:
GERALDINE ANTHONY,
JARROD BAKER,
LESLIE MORGAN,
HEATHER FRIESEN
Appellants
and
HER MAJESTY THE QUEEN
Respondent
REASONS FOR JUDGMENT OF THE
COURT
(Delivered
from the Bench at Toronto, Ontario, on December 1,
2011)
LAYDEN-STEVENSON
J.A.
[1]
These
reasons relate to Court File Numbers A-445-10, A-446-10, A-447-10 and A-448-10.
The original of the reasons will be filed in A-445-10 and copies will be placed
in the other three files. The subject matter of the appeals relates to the
issue of free parking provided by an employer to its employees. The appellants
claim that their free parking is not taxable. However, if it is taxable, they
say the determined value is too high.
[2]
The
appellants are employed at Branksome Hall, a not-for-profit independent girls’
school in Toronto,
Ontario. They have free parking on
the school’s campus. In 2007, the Minister of National Revenue (the Minister) reassessed
each of the appellants under paragraph 6(1)(a) of the Income Tax Act,
R.S.C. 1985, c. 1 (5th Supp), as amended (the Act), for the 2003 and 2004
taxation years, to include an additional $92 per month as income.
[3]
Paragraph
6(1)(a) of the Act is a broadly worded provision that requires the
“value of board, lodging and other benefits of any kind whatever”
received or enjoyed by a taxpayer in respect of “an office or employment” to be
included in the taxpayer’s income (our emphasis). The meaning to be attributed
to the word “benefit” is not in dispute. The Minister considered the
appellants’ parking spaces to be benefits and calculated the monthly fair
market value for each parking space at $92.
[4]
Justice
Paris of the Tax Court of Canada (the judge) heard the appellants’ appeals from
the Minister’s reassessments. The judge reviewed the applicable principles
regarding “benefit” under parargraph 6(1)(a) of the Act as articulated
in Schroter v. R., 2010 FCA 98. Applying the definition to the facts,
the judge concluded that the on-site free parking provided to the appellants by
their employer is a benefit. With respect to the value of the benefit, the
judge rejected the “cost to employer” approach advanced by the appellants in
favour of the “fair market value” approach. The judge ultimately disagreed with
the Minister’s valuation and determined the appropriate monthly fair market
value to be $75 for 2003 and $77 for 2004. The Minister does not take issue
with those conclusions. The judge’s reasons are reported as 2010 TCC 533.
[5]
Despite
the capable submissions of Mr. Bernier, we are of the view that the appeals
must be dismissed. The judge’s finding that a benefit exists is a question of
mixed fact and law. The valuation of the benefit is grounded in the judge’s
appreciation and weighing of the evidence. Both attract a standard of review of
palpable and overriding error: Housen v. Nikolaisen, 2002 SCC 33. No
such error has been demonstrated. The appellants’ arguments with respect to
valuation ignore the judge’s observations that: (a) even if he had been
inclined to accept the “cost to employer” approach, the evidence was
insufficient to establish the quantum of those costs (judge’s reasons at para. 59);
and (b) the evidence did not establish that a fair market valuation of the
benefit was in any way inappropriate (judge’s reasons at para. 58). Further,
many of the appellants’ arguments regarding the “cost to employer” approach
have been overtaken by this Court’s decision in Spence v. Canada, 2011
FCA 200.
[6]
Counsel
submitted to us in oral argument (but not to the judge) that, as a matter of
law, the fair market value is an appropriate method of valuation only when
there is an open market for the very benefit in issue. We disagree. Here, there
was an open market for parking in the area of the school and the experts used
this for determining the fair market value of staff parking at Branksome. In
these circumstances, it was open to the judge to use the fair market value
approach to value the benefit to the employees.
[7]
The
judge’s reasons are detailed, comprehensive and cogent. Basically, the
appellants seek to reargue the submissions made to the judge and rejected by
him. We agree with the judge’s conclusions for substantially the reasons he
gave.
[8]
The
appeals will be dismissed with one set of costs throughout.
“Carolyn Layden-Stevenson”
FEDERAL COURT OF APPEAL
NAMES OF COUNSEL AND
SOLICITORS OF RECORD
DOCKETS: A-445-10,
A-446-10, A-447-10, A-448-10
(APPEAL
FROM A JUDGMENT OF THE HON. JUSTICE BRENT PARIS, OF THE TAX COURT OF CANADA,
DATED OCTOBER 21, 2010, IN TAX COURT FILE NO. 2009-618 (IT) I.
STYLE OF CAUSE: GERALDINE ANTHONY, JARROD
BAKER, LESLIE MORGAN, HEATHER FRIESEN v. HER MAJESTY THE QUEEN
PLACE OF HEARING: TORONTO, ONTARIO
DATE OF HEARING: DECEMBER 1, 2011
REASONS FOR JUDGMENT
OF THE COURT BY: (EVANS, LAYDEN-STEVENSON, STRATAS JJ.A.
DELIVERED FROM THE
BENCH BY: LAYDEN-STEVENSON J.A.
APPEARANCES:
Jacques Bernier
Mark
Tonkovitch
|
FOR
THE APPELLANTS
|
Bobby J. Sood
Darren
Prevost
|
FOR
THE RESPONDENT
|
SOLICITORS
OF RECORD:
Bennett Jones LLP
Toronto,
Ontario
|
FOR THE APPELLANTS
|
Myles J. Kirvan
Deputy
Attorney General of Canada
|
FOR THE RESPONDENT
|