Date: 20110117
Docket: A‑89‑10
Citation:
2011 FCA 15
CORAM: LÉTOURNEAU J.A.
NADON J.A.
MAINVILLE J.A.
BETWEEN:
MICHEL TREMBLAY
Appellant
and
MINISTER OF NATIONAL REVENUE
Respondent
REASONS FOR JUDGMENT
LÉTOURNEAU J.A.
[1]
At the hearing, the
appellant, who was self‑represented, moved to stay the appeal
proceedings. Following the
objection by counsel for the respondent, the Court dismissed the appellant’s
motion and held the hearing on the merits.
[2]
The appellant is appealing
the decision of Justice Bédard of the Tax Court of Canada (the judge), dated
February 9, 2010, in file 2007‑4950(IT)G. After analyzing the evidence and the law,
the judge dismissed the appellant’s appeal of a reassessment by the Minister of
National Revenue for the 1999 taxation year. This
assessment added, among other things, a taxable capital gain of $200,901 to the
appellant’s income.
[3]
In the Tax Court of Canada,
the debate focused solely on the fair market value of the property giving rise
to the dispute. It was a
debate between experts, both of whom arrived at different figures using the same
valuation method, that is, the direct comparison method, which “essentially
consists in using as a reference point the selling prices of properties that
have similar characteristics, are located as close as possible to the property
to be appraised, and are sold as close as possible to the relevant appraisal
date”: see paragraph 11 of the judge’s reasons for his decision.
[4]
The judge provided an
abundance of reasons for preferring the expert opinion of the respondent’s
witness. Central to this
choice was the judge’s finding that the expert opinion of the appellant’s
witness was not credible. At paragraph 12
of the reasons for his decision, the judge worded as follows his reasons for
finding that the analysis and conclusions of Mr. Ruest, the expert
retained by the appellant, did not seem credible to him:
[12] In my opinion, the two experts used the right valuation method
to determine the Property’s FMV given the circumstances. Moreover, I note
immediately that, for the reasons set out below, I do not find Mr. Ruest’s
analysis and conclusions credible:
(i) First of
all, as we have seen, Mr. Ruest’s report (Exhibit A‑1) determines the FMV
of the Property as at February 1, 2001, not March 31, 1999.
Mr. Ruest explained that this fact is not relevant in the case at bar
because the market conditions in 2001 were the same as they were in 1999. Even
as an expert, Mr. Ruest could not hope to convince me of this fact simply
by stating it. Indeed, it would have been very interesting to know the basis
for his assertion in that regard.
(ii) The
Appellant must understand that, in applying the direct comparison method, the
greater the difference between the characteristics of the property to be
appraised and the similar property, and the farther removed one gets from the
appraised property or from the appraisal date, the more open to doubt the
appraisal becomes. Conversely, the more similar the characteristics, and the
closer together the properties and the closer the dates, the easier it is to
estimate the value of the subject property. In the case at bar, I am of the
opinion that the characteristics of the properties that Mr. Ruest selected
for his analysis were too different from those of the Property. Indeed,
buildings 1, 2, 3, 4, 5, 6, 8, 9 and 11 (see paragraph 6), which have
four units, eight units, four units, 11 units,
eight units, six units, 10 units, 13 units and
12 units respectively, are not, in my opinion, similar to the Property,
which, as we have seen, has 32 units. The market for those buildings is
not the same market as for the Property. The number of buyers for 32‑unit
buildings is more limited than the number of buyers for four‑, six‑
or eight‑unit buildings. In addition, buyers of 32‑unit buildings
are usually better informed and are therefore harder negotiators than buyers of
buildings with a small number of units. Lastly, buildings 7, 8, 10 and 11
are too far from the Property to be valid comparables: they are located in
cities other than Saguenay,
where the Property is situated. In my opinion, properties in a city
neighbouring the city in which the Property is located can also be valid
comparables, provided satisfactory proof is provided of the market conditions in
each city. Here, the Appellant’s evidence in this regard was based solely on
the testimony of Mr. Ruest, who claims that the market conditions in Chicoutimi were the same as those in Alma
and Jonquière. Once again, even as an expert, Mr. Ruest could not hope to
convince me of this merely by making an assertion that it was so. Lastly, all
of the 11 real estate transactions that Mr. Ruest selected for his
analysis took place after March 31, 1999, and on dates that were
considerably later than that date. A transaction subsequent to the appraisal
date, and even relatively distant in time from the appraisal date, can be taken
into account when using the direct comparison method, if the extent to which
the market evolved between the appraisal and transaction dates can be
satisfactorily shown, in which case one will usually need to make adjustments
to take any market changes into account. Here, the Appellant’s evidence in this
regard rested solely on the testimony of Mr. Ruest, who claims that the
market conditions in 2002, 2004 and even 2005 were the same as in 1999. Once
again, even as an expert, he could not hope to convince me of this merely by
making an assertion that it was so. Indeed, it would have been very interesting
to know the basis for his assertion in that regard.
[5]
In his memorandum of fact
and law, the appellant raises a number of issues that are irrelevant to the
resolution of the dispute. Essentially,
however, what he is seeking is to have the opinion of his expert accepted and
the decision of the Tax Court of Canada set aside.
[6]
In the absence of a palpable
and overriding error by the judge, this Court has no power to interfere with
his findings of fact made on the basis of the credibility of witnesses: F.H.
v. McDougall, [2008] 3 S.C.R. 41; H.L. v. Canada, [2005] 1 S.C.R.
401, at page 421; Nash v. Canada, [2005] F.C.J. No. 1921, at
paragraphs 9 and 10. The
appellant has not demonstrated any error of fact or law that would warrant this
Court’s interference.
[7]
The appellant also alleged
that the April 19, 2004, assessment was time‑based because it had
been made outside the normal assessment period. This allegation has no merit because the assessment was
made within the three‑year time limit following the initial assessment,
which was made on July 6, 2001.
[8]
For these reasons, I would dismiss the appeal
with costs.
“Gilles Létourneau”
“I agree.
M.
Nadon J.A.”
“I agree.
Robert M. Mainville J.A.”
Certified true
translation
Sarah Burns
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