[OFFICIAL ENGLISH TRANSLATION]
Date: 20021029
Docket: 2002-1245(IT)I
BETWEEN:
DANIEL PAYETTE,
Appellant,
and
Her Majesty The Queen,
Respondent.
Reasons For Judgment
Lamarre Proulx, J.T.C.C.
[1] This is an appeal under the
informal procedure concerning the 1998 taxation year.
[2] The point at issue is the
calculation of reasonable expenses for a stand-by charge
for an automobile put at the appellant's disposal by an
automobile dealership and, more specifically, the number of days
of use and the kilometrage travelled.
[3] The facts on which the Minister of
National Revenue (the "Minister") relied in making his
assessment are described in paragraph 5 of the Reply to the
Notice of Appeal as follows:
[TRANSLATION]
(a) The appellant
has been an automobile sales representative for a number of
years.
(b) In March 1998,
the appellant was hired on a trial basis by
Germain Baillargeon, the employer's sales manager at the
time.
(c) The appellant
started with an unpaid training period followed by two weeks
of paid work.
(d) The
appellant's gross wages for those two weeks of work was
$154.80.
(e) Throughout the
period when the appellant was employed by the employer, that is,
from March 24 to April 30, 1998, he enjoyed the use of
a motor vehicle having a fair market value of $27,360.80.
(f) During
that period, the appellant travelled 4,447 km for personal
purposes.
(g) The taxable
benefit in respect of operating expenses for that vehicle
amounted to $1,074.84.
(h) The total of
wages earned and the automobile benefit enjoyed by the appellant
was $1,229.
[4] In his testimony, the appellant
denied all the subparagraphs with the exception of the first.
[5] The appellant is currently the
sales manager at the Longueuil Toyota dealership. He said that he
had been selling cars since 1978. He was very familiar with
Germain Baillargeon, with whom he had worked at various
dealerships. At the time the events occured, Mr. Baillargeon
was the sales manager at Actuel Pontiac Buick Cadillac Inc. and
he offered the appellant work at that dealership. The appellant
first had to undergo a brief training period before having paid
employment.
[6] The dealership immediately gave
him the use of a car. That agreement is described in a document
dated March 30, 1998, signed by the appellant and filed as
Exhibit I-1. The stated kilometrage is
seven kilometers. No document was filed stating the purpose
of that use.
[7] Exhibit I-2 is an
internal document of the dealership concerning staff movements.
It is a document dated March 30, 1998, stating that the
appellant would start as a salesman on April 6, 1998. His
base salary would be $150 a week. It also states that an
automobile was provided. The document is signed by
Mr. Baillargeon as departmental manager and by the appellant
as an employee.
[8] Exhibit I-5 is another
document entitled, "Staff Movements". This time, the
document refers to the appellant's departure on
April 14, 1998. No reference is made to the car.
[9] The appellant lived and is still
living in Venise en Québec. The dealership is located in
St-Hubert. According to the appellant, and this was not
contradicted by the respondent's witnesses, the difference
between the two points is approximately 60 kilometers.
[10] Exhibit I-3 is the
appellant's record of employment issued by Actuel Pontiac.
The first work day was April 6, 1998, and the last paid day
was April 13, 1998.
[11] Exhibit I-4 is the T4
statement of earnings prepared by the employer, Actuel Pontiac.
It shows employment income of $1,222.63. The amount of the
automobile benefit was determined to be $1,074.83.
[12] The appellant complained to Revenue
Canada about the amount of the car benefit. Robert Lortie,
the Minister's auditor, went to the garage to make the
necessary checks. His report was filed as Exhibit I-6
and A-1. He determined a gross salary of $154.80, which the
appellant does not dispute. To calculate the car benefit, he took
an average value of $27,360.80, which the appellant did not
dispute either. He multiplied that amount by 0.01 and by the
fraction 38/30.
[13] The number 38 is the number of days the
appellant purportedly had the car at his disposal. The appellant
disputes that number and asserts that he had the car at his
disposal from March 30 to April 20, that is, for
21 days.
[14] Exhibit A-5 is a record of
employment from Candiac Toyota Inc. concerning the appellant. It
states that the appellant worked there from April 20 to 22
inclusive. Gérard Rousseau is named as the contact
person for information purposes. Exhibit A-6 is an
undated letter from Mr. Rousseau stating that the appellant
worked from April 20 to 23 and that from April 20 to
27, 1998, he had a courtesy vehicle in his possession.
[15] That letter is signed by
Mr. Rousseau, general manager, and written on the letterhead
of Candiac Toyota Inc. Counsel for the respondent objected to the
filing of that document on the ground that the signatory was not
present for cross-examination. The appellant pointed out that
that same person was the one who had signed his record of
employment (Exhibit A-5).
[16] Exhibit A-7 is a letter from
the appellant's current employer, Longueuil Toyota. That
letter confirms the appellant's employment since
April 27, 1998.
[17] The appellant stated that he remembered
very clearly that, on April 20, the first day of his
employment with Candiac Toyota, he came with a salesman from
Candiac Toyota to give back the car and he left with the
salesman.
[18] Gilberte Tossings, Actuel's
controller, testified and filed a number of documents. With
respect to the return of the car, she did not have any particular
documents with her. In preparing the T4, she had relied on
Mr. Baillargeon's statements.
Conclusion
[19] It appears to me that the
appellant's statements concerning the period of use of the
car are plausible. He never changed versions. In his notice of
appeal, he said that the two Toyota dealers had provided him with
a car. At the hearing, he filed a record of employment from
Candiac Toyota confirming the start of his employment as
April 20, 1998, and a letter from Longueuil Toyota
indicating the date of April 27, 1998. In both cases, the
businesses confirmed that they had put a car at the
appellant's disposal. However, no document was filed from
Actuel Pontiac stating that April 30, 1998, was the date on
which the use of the car ended.
[20] I therefore conclude that the car was
put at the appellant's disposal for 21 days, not
38 days. As to the kilometrage, the appellant suggested no
figure. The employer considered that the appellant had travelled
4,447 kilometers in 38 days, for an average of
117 kilometers a day. The number of kilometers a day may be
plausible given the distance from the appellant's place of
residence to his place of work. The same daily number of
kilometers may therefore be retained.
[21] The appeal is allowed on that
basis.
Signed at Ottawa, Canada, this 29th day of October
2002
J.T.C.C.
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