Citation: 2010 TCC 511
Date: 20101102
Docket: 2009‑3557(GST)I
BETWEEN:
DEBBIE GOYER,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
[OFFICIAL ENGLISH
TRANSLATION]
REASONS FOR JUDGMENT
Angers J.
[1]
On
October 24, 2007, the appellant made an application to the Minister of
Revenue of Quebec (the Minister) for a Goods and Services Tax (GST) rebate on a
new residential unit located at 649 St‑Féréol, Les Cèdres (new residential
unit), in which she claimed a rebate of $3,700.47. On January 21, 2008,
the respondent, through the Minister, assessed the appellant and refused the
GST rebate application. The appellant duly filed
an objection, but the Minister confirmed the assessment on February 19,
2009. The appellant is therefore appealing the
assessment before this Court.
[2]
On
October 24, 2005, the appellant, Normand Miserany and Jocelyne Auger
purchased, by duly notarized deed of sale, a vacant lot on which the new residential
unit in question was built. The purchase price was $30,000.
[3]
On
March 2, 2006, the same three persons signed a deed of immovable hypothec
in favour of the National Bank of Canada, which secured repayment of the loan granted
by the Bank. The loan in question was used to pay for construction of
the new residential unit. In addition to the
hypothecary loan, the appellant and the two other co-owners used the proceeds of
the sale of a neighbouring property that belonged to them to pay for part of
the construction costs of the new residential unit.
[4]
The
insurance policy for the new residential unit indicates that the appellant,
Mr. Miserany and Ms. Auger are the insureds. According to the evidence
heard at the hearing, Mr. Miserany and Ms. Auger never resided in
this new residential unit.
[5]
According
to the appellant, she alone saw to the construction of the new residential unit
and paid all of the invoices related to the construction. Most of the
invoices are in her name, except for a few that are in the names of the
appellant and Mr. Miserany. She has been
residing in the new residential unit with her son since March 2006 and,
since that date, has been paying for all of the expenses related to this new residential
unit by herself, including the repayment of the hypothec. Mr. Miserany confirmed all of those facts.
[6]
The
appellant explained that the names of Mr. Miserany and Ms. Auger
appear on the documents solely to enable her to meet the bank's financial ratio
requirements. In other words, they are prête‑noms for the
financing costs. Mr. Miserany has been a
friend of the appellant's family for some thirty years.
[7]
On
July 17, 2009, a document, called an agreement, was signed by
Mr. Miserany and Ms. Auger in which they stated that they jointly
purchased the new residential unit with the appellant, signed the bill of sale only
to facilitate the appellant's obtaining the hypothecary loan and did not at any
time intend to be recognized as owners of this residential unit.
[8]
Normand
Miserany confirmed the appellant's testimony and related that this is the
second time he and his spouse, Jocelyne Auger, have helped the appellant in
this way.
[9]
A number of
conditions must be met before a rebate may be granted under the Excise Tax
Act (the Act). In this case, the only questions that are at issue here and
were raised in the written submissions are whether the appellant, Normand
Miserany and Jocelyne Auger were co-owners of the new residential unit in
question and, if so, whether they must all meet the requirements of
subsection 256(2) of the Act, that is, that they use the residential unit
as their primary place of residence or purchased it for use as their primary
place of residence.
[10]
Subsections 256(2)
and 262(3) are the relevant provisions of the Act in this dispute and read as
follows:
256(2) Rebate for owner‑built homes – Where
(a) a particular individual
constructs or substantially renovates, or engages another person to construct
or substantially renovate for the particular individual, a residential complex
that is a single unit residential complex or a residential condominium unit for
use as the primary place of residence of the particular individual or a
relation of the particular individual,
. . .
262(3) Group of
individuals – If
(a) a supply of a residential complex
or a share of the capital stock of a cooperative housing corporation is made to
two or more individuals, or
(b) two or more individuals construct
or substantially renovate, or engage another person to construct or
substantially renovate, a residential complex,
the references in sections 254 to 256 to a particular individual
shall be read as references to all of those individuals as a group, but only
one of those individuals may apply for the rebate under section 254,
254.1, 255 or 256, as the case may be, in respect of the complex or share.
[11]
The appellant submits
that, in fact, she alone had the residential complex built for her use as her primary
place of residence, and that it was not built for Mr. Miserany or
Ms. Auger, such that they did not, as a group, have to comply with the condition
that the residential complex be used as their primary place of residence.
[12]
I must note that, at
first glance, the consistency between the appellant's and Mr. Miserany's versions
of the facts lends a certain degree of plausibility to their statements
regarding their intention to enable the appellant to build herself a house and
especially to enable her to finance the project. However, the documentation
submitted in evidence contradicts those statements. In particular, I refer to
Exhibit A‑4, which clearly shows that when the land was purchased,
the purchasers were indeed the appellant, Normand Miserany and Jocelyne Auger
and that, as such, the residential unit in issue was built for those three
persons. That contradicts the testimonies of the appellant and
Mr. Miserany, who allege that Mr. Miserany and Jocelyne Auger were
only involved to enable the appellant to meet the financing criteria. I do not
believe that the agreement (Exhibit A‑8) dated July 17, 2009,
alters the property rights of each person as granted by the deed of sale,
particularly in respect of third parties.
[13]
I must also add that
the names of the three co‑owners, in that capacity, are on the deed of
hypothec, construction permit, insurance policy and the application for the new
housing rebate. The form of all of those documents clearly shows a contractual
relationship. Exhibit A‑8, dated July 17, 2008, does not change
that.
[14]
Parliament's intention is
to grant individuals a rebate when, among other things, a residential unit is
constructed for use as their primary place of residence. This rebate is also available
when the provision of the residential unit is made for a number of individuals,
as is the case here, except that the references to a particular individual
apply to the entire group. In my opinion, the statute contains no ambiguity. In
this case, the immovable in question was never used as the primary place of
residence of Mr. Miserany and Ms. Auger.
[15]
The assessment dated
January 21, 2008, is well founded in fact and in law. The appeal is
dismissed.
Signed this 2nd day of November 2010.
"François Angers"
Translation
certified true
on this 15th day
of December 2010
Sarah Burns,
Translator
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