Rowe D.J.T.C.:
The appellant appealed with respect to his 1990, 1991 and 1992 taxation years. There were a variety of issues involved concerning some rental properties, business activities, and it involved more than one activity.
We commenced to hear evidence in June, specifically on June 25th, and then adjourned to this date to hear further evidence on the point. Progress was made on certain issues at the June sitting and further progress was made today and evidence was heard and documents were presented.
At the conclusion of the evidence I’ve heard, and after having given the parties opportunities on a couple of occasions to discuss an appropriate resolution, it has now transpired that counsel for the Crown and the appellant wish that the matter be resolved by my making an order to the Minister of National Revenue to undertake certain reassessments which are in accordance with their agreement. I have reviewed this on a point-by-point basis with Mr. Gazley and with counsel, and they are in agreement that an order should issue on the basis of their consent.
Accordingly, therefore, the appeal is allowed without costs and the as- sessments are referred back to the Minister of National Revenue for recon- sideration and reassessment on the following basis: that for the year 1990 the Minister will calculate the interest paid by the appellant on the sum of $40,300 and thereafter will allow the sum -- will allow 55 percent of that amount as an interest expense attributable to the rental portion of the prem- ises. In addition, for the year 1990, the Minister of National Revenue will allow the sum of $2,672.76 as travel expense-mileage.
The Minister of National Revenue will have referred back to him the assessment for the 1991 taxation year, and the Minister will reassess that taxation year on the following basis: The Minister will calculate interest on the sum of $40,300 and thereafter will allow 55 percent of that calculated amount as an interest expense attributable to the rental portion of the prem- ises. In addition, for that 1991 taxation year, the Minister will allow the sum of $665.28 as a travel expense-mileage. There will be no further and other relief.
All right?
Ms. Mohr: (L-49/R4752/T0/BT0) test_marked_paragraph_end (124) 1.016 0956_5169_5297
Yes, Your Honour. Could we perhaps just confirm that Mr. Gazley un- derstands the effect of the consent judgment and that he will not be able to review --
Rowe D.J.T.C.:
Do you understand that?
Mr. Gazley: (L-48/R4652/T0/BT0) test_marked_paragraph_end (1148) 1.011 0956_7131_7297
Yes. Could I just ask one question?
Rowe D.J.T.C.:
Yes.
Mr. Gazley: (L-54/R4654/T0/BT0) test_linespace (270>256.00) 1.024 0956_8643_8811
I’m sorry, there’s just so much -- the downpayment was -- Rowe D.J.T.C.:
40,300. So, in effect, because we’ve gone over this and have thrashed it out and I have proceeded to issue that order and allow the appeal on that basis and we’ve gone over it on a point-by-point item and you have agreed that that is the order that I should make, and I have, in fact, made that order.
Mr. Gazley: (L20/R4632/T0/BT0) test_marked_paragraph_end (4624) 1.032 0957_2621_2789
And for clarification, that does not preclude me from making a separate request for interest relief?
Rowe D.J.T.C.:
Yes, it does. This is the whole point of it. This resolves it.
Ms. Mohr: (L18/R4740/T0/BT0) test_marked_paragraph_end (3836) 1.032 0957_4365_4497
In terms of the interest.
Mr. Gazley: (L16/R4640/T0/BT0) test_marked_paragraph_end (1064) 1.032 0957_5055_5223
Interest relief.
Ms. Mohr: (L14/R4742/T0/BT0) test_marked_paragraph_end (434) 1.032 0957_5745_5877
That would be dealt with under the fairness at the Minister’s discretion.
Mr. Gazley: (L12/R4644/T0/BT0) test_linespace (270>252.99) 1.011 0957_6431_6601
I don’t mean in this court, I’m sorry.
Rowe D.]. T.C.:
No. What happens with the interest, it gets recalculated as though this has been done in the first place.
Mr. Gazley: (L8/R4646/T0/BT0) test_marked_paragraph_end (1458) 1.024 0957_8159_8327
And I may at that time apply for interest relief?
Rowe D.J.T.C.:
And you may at that time apply, but you have to understand that whatever other relief you seek is purely after the Minister recalculates in accordance with my judgment. Any relief that you seek after that is purely an administrative relief and doesn’t involve the Tax Court of Canada
Mr. Gazley: (L6/R4651/T0/BT0) test_marked_paragraph_end (4319) 1.040 0958_1725_1901
I understand that.
Rowe D.J.T.C.:
You understand that?
Mr. Galley: (L-12/R4675/T0/BT0) test_marked_paragraph_end (906) 1.024 0958_3247_3425
Yes.
Rowe D.]. T.C.:
Okay.
Ms. Mohr: (L-40/R4801/T0/BT0) test_linespace (284>254.69) 1.032 0958_4779_4915
Thank you, Your Honour.
Mr. Gazley: (L-49/R4709/T0/BT0) test_marked_paragraph_end (1256) 1.024 0958_5461_5637
Thank you.
Appeal allowed.
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