Guy
Tremblay
[TRANSLATION]:—This
case
was
heard
in
Chicoutimi,
Quebec,
on
October
17,
1977.
1.
Point
at
issue
The
Board
must
determine
whether
the
sums
of
$473.10
and
$1,296
should
be
included
respectively
in
the
appellant’s
income
for
the
1973
and
1974
taxation
years,
as
allowances
for
the
personal
use
and
standby
personal
use
of
the
automobile
of
the
company,
“Les
Fonds
Nordic
Limitée,”
of
which
the
appellant
is
the
principal
shareholder.
2.
Burden
of
proof
The
burden
is
on
the
appellant
to
show
that
the
assessments
of
the
respondent
are
incorrect.
This
burden
of
proof
derives
not
from
one
particular
section
of
the
Income
Tax
Act,
but
from
a
number
of
judicial
decisions,
including
the
judgment
of
the
Supreme
Court
of
Canada
‘in
R
W
S
Johnston
v
MNR,
[1948]
CTC
195;
3
DTC
1182.
3.
Facts
3.1
In
1973
and
1974
the
appellant,
a
member
of
the
Quebec
Bar,
controlled
the
company
Les
Fonds
Nordic
Limitée
with
his
wife,
the
other
shareholders
being
his
father,
brother
and
sister-in-law.
3.2
The
company,
which
deals
in
real
estate,
decided
in
1971
that
it
would
be
advisable
to
purchase
an
automobile,
a
Volkswagen,
which
it
still
had
at
the
beginning
of
1973.
3.3
The
appellant
used
this
automobile
to
visit
properties
for
sale,
and
so
on.
He
maintained
that
he
used
the
vehicle
only
for
company,
not
personal
business,
even
though
he
could
have
used
it
for
personal
business.
There
is
no
company
resolution
that
the
Volkswagen
was
not
to
be
used
for
personal
business.
Moreover,
the
appellant
had
a
vehicle
of
his
own.
3.4
“Les
Fonds
Nordic
Limitée’’
operated
out
of
the
offices
of
the
appellant’s
law
firm.
The
Volkswagen
was
parked
either
outside
these
offices
or
the
appellant’s
residence.
3.5
During
1973,
“Les
Fonds
Nordic
Limitée”
acquired
the
majority
of
shares
of
Radio
Sept-lles
Inc.
3.6
Pursuant
to
a
decision
by
the
board
of
directors
of
Les
Fonds
Nordic
Limitée—a
decision
with
which
the
appellant
did
not
concur—
the
Volkswagen
was
sold
on
November
9,
1973
and
a
Continental
purchased
in
its
place.
3.7
A
resolution
was
meanwhile
passed
that
the
Continental
was
only
to
be
used
for
company,
not
personal
business.
3.8
Like
the
Volkswagen,
the
Continental
again
was
used
primarily
by
the
appellant.
3.9
In
1973
and
1974,
the
appellant
reported
that
he
had
received
from
the
company
bonuses
of
$20,000
and
$25,000
respectively.
3.10
On
October
18,
1976
the
respondent,
by
assessment,
included
in
the
appellant’s
income
for
1973
and
1974
the
sums
of
$473.10
and
$1,296
respectively,
for
personal
use
of
the
automobile.
3.11
The
appellant
filed
a
notice
of
objection
on
October
28,
1976,
to
which
the
respondent
replied
on
February
9,
1977,
upholding
the
assessment
of
the
previous
October
18.
3.12
The
appellant
appealed
to
the
Board
on
February
24,
1977.
4:
Act,
Case
law
and
Comments
Subsections
15(5)
and
15(6)
of
the
new
Act
apply
in
the
case
at
bar:
15.
(5)
Where
automobile
made
available
to
shareholder.
Where
a
corporation
has
made
an
automobile
available
to
a
shareholder
in
a
taxation
year
for
his
personal
use
(whether
for
his
exclusive
personal
use
or
otherwise),
the
amount,
if.
any,
by
which
an
amount
that
would
be
a
reasonable
standby
charge
for
the
automobile
for
the
aggregate
number
of
days
in
the
year
during
which
it
was
made
so
available
(whether
or
not
it
was
used
by
the
shareholder)
exceeds
the
aggregate
of
(a)
the
amount
paid
in
the
year
by
the
shareholder
to
the
corporation
for
the
use
of
the
automobile,
and
(b)
any
amount
included
in
computing
the
shareholder’s
income
for
the
year
by
virtue
of
subsection
(1)
in
respect
of
the
use
by
him
of
the
automobile
in
the
year,
shall
be
included
in
computing
his
income
for
the
year.
15.
(6)
Application
of
subsection
6(2).
Subsection
6(2)
is
applicable
mutatis
mutandis
to
subsection
(5).
6.
(2)
Reasonable
standby
charge
minimum
amount.
For
the
purposes
of
paragraph
(1)(e)
‘‘an
amount
that
would
be
a
reasonable
standby
charge
for
the
automobile”
for
the
aggregate
number
of
days
in
a
taxation
year
during
which
it
was
made
available
by
an
employer
shall
be
deemed
not
to
be
less
than,
(a)
where
the
employer
owned
the
automobile
at
any
time
in
the
year,
an
amount
in
respect
of
its
capital
cost
to
the
employer
equal
to
the
percentage
thereof
obtained
when
1%
is
multiplied
by
the
quotient
obtained
when
such
of
the
aggregate
number
of
days
hereinbefore
referred
to
as
were
days
during
which
the.
employer
owned
the
automobile
is
divided
by
30
(except
that
if
the
quotient
so
obtained
is
not
a
full
number
it
shall
be
taken
to
be
the
nearest
full
number
or,
if
there
is
no
nearest
full
number,
then
to
the
full
number
next
below
it),
and
(b)
where
the
employer
leased
the
automobile
from
a
lessor
at
any
time
in
the
year,
an
amount
equal
to
1/3
of
the
amount
by
which
the
amount
payable
by
the
employer
to
the
lessor
for
the
purpose
of
leasing
the
automobile
for
the
aggregate
number
of
days
hereinbefore
referred
to
exceeds
the
portion
of
those
amounts
that
may
reasonably
be
regarded
as
having
been
paid
to
the
lessor
in
respect
of
all
or
part
of
the
cost
to
him
of
insuring
against
(i)
loss
of,
or
damage
to,
the
automobile,
or
(ii)
liability
resulting
from
the
use
of
the
automobile.
The
Board
concludes
from
the
evidence
submitted
that
the
Act
applies
so
far
as
the
Volkswagen
is
concerned.
This
vehicle
was
made
available
to
the
shareholder
even
though
the
evidence
shows
that
he
did
not
so
use
it.
The
Act
clearly
states
“whether
or
not
it
was
used
by
the
shareholder”.
How
many
days
was
the
automobile
made
available
in
1973?
This
was
not
established
by
the
evidence.
The
Board
ruled
on
October
7,
1977
in
Herbert
J
Harman
v
MNR,
[1978]
CTC
2144;
78
DTC
1138,
that
where
an
automobile
is
used
most
of
the
day
for
the
employer,
that
day
cannot
be
counted
as
a
day
in
which
the
automobile
was
made
available
to
the
employee
for
his
personal
use.
In
the
case
at
bar,
no
evidence
was
submitted
(the
appellant
had
the
burden
of
doing
so)
to
indicate
the
number
of
days
during
which
the
Volkswagen
was
used
primarily
for
the
company.
The
Board
must
therefore
conclude
that
the
vehicle
was
available
to
the
appellant
every
day
that
the
company
owned
it
for
that
year.
As
the
Volkswagen
was
sold
on
November
9,
1973
the
appellant
had
it
at
his
disposal
for
305
days.
So
far
as
the
Continental
is
concerned,
the
evidence
showed
that
not
only
did
the
appellant
not
use
this
automobile
on
his
personal
business,
but
the
company
did
not
make
it
available
to
him
for
this
purpose.
Indeed,
a
resolution
prohibited
such
personal
use.
Subsection
15(5)
cannot,
therefore,
apply
in
the
case
at
bar.
5.
Conclusion
In
respect
of
1973,
the
appeal
is
dismissed
for
305
days
and
allowed
for
the
remainder
of
the
year.
In
respect
of
1974,
the
appeal
is
allowed.
The
whole
is
referred
back
to
the
respondent
for
reassessment
in
accordance
with
the
above
reasons
for
judgment.
Appeal
allowed
in
part.
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