Davidson v. The Queen, docket 2001-985(GST)I (Informal Procedure)

Date: 20020228

Docket: 2001-985-GST-I

BETWEEN:

PHILIP DAVIDSON,

Appellant,

and

HER MAJESTY THE QUEEN,

Respondent.

Reasonsfor Judgment

McArthur J.

[1]            The broad issue is whether the Appellant is entitled to a Goods and Services Tax/House Sales Tax (GST/HST) - New Housing Rebate pursuant to section 254 of the Excise Tax Act (the Act).

[2]            For the most part, the facts are not in dispute. By Purchase Agreement dated October 28, 1999 and transfer of land dated June 13, 2000, the Appellant purchased a new duplex with two residential units. The purchase price of the unit that he occupied was $131,841.50. Goods and services tax in the amount of $9,228 was payable.

[3]            Although title was taken in the name of the Appellant and Carol Waterhouse (Ms. Waterhouse), the Minister of National Revenue (the Minister) concedes that Ms. Waterhouse was not a beneficial owner and was joined as an owner for mortgage purposes only.

[4]            The Reply to the Notice of Appeal predominately deals with the non-issue of whether Ms. Waterhouse was a beneficial owner. It is unclear why this preoccupied the Minister given the overwhelming evidence to the contrary.

[5]            In any event, Respondent's counsel, quite rightly, narrowed the issue to an application of sections 254 and 262 of the Act. The Appellant submits that he purchased a new residential unit, which he occupied as his principal place of residence and he is entitled to a GST/HST rebate. Respondent's counsel does not take issue with the facts. He contends that upon interpreting sections 254 and 262 of the Act, the Appellant is not entitled to a rebate.

[6]            I agree with the conclusions of Respondent's counsel. Unfortunately, the Appellant is caught by the legislation resulting in what he describes as unfair. It is up to the legislature and not the Court to patch the holes.

[7]            Paragraph 254(2)(b) states that at the time a person becomes liable or assumes liability under an agreement of purchase and sale of the complex, he or she must be acquiring the complex for use as a primary place of residence personally or for a relative. Subsection 262(3) adds that where a supply of a single-unit residential complex is made to two or more individuals, the references in section 254 to a particular individual shall be read as references to all of those individuals as a group.

[8]            The purchase and sale agreement lists both the Appellant and Ms. Waterhouse as purchasers. The Certificate of Title and the mortgage sets out both individuals, as joint tenants. Pursuant to subsection 262(3), therefore, the references to a "particular individual" in section 254 necessarily refer to both the Appellant and to Ms. Waterhouse. This requires that Ms. Waterhouse also satisfy the conditions of section 254 before the Appellant may claim the GST/HST rebate. As Ms. Waterhouse did not enter into liability with the intention of acquiring the complex for use as her primary place of residence, and is not a relative of the Appellant, the conditions of section 254 have not been met. The Appellant is therefore not eligible to claim the new housing rebate.

[9]            The appeal is dismissed.

Signed at Ottawa, Canada, this 28th day of February, 2002.

"C.H. McArthur"

J.T.C.C.

COURT FILE NO.:                                                 2001-985(GST)I

STYLE OF CAUSE:                                               Philip Davidson and Her Majesty the Queen

PLACE OF HEARING:                                         Calgary, Alberta

DATE OF HEARING:                                           November 9, 2001

REASONS FOR JUDGMENT BY:                      The Honourable Judge C.H. McArthur

DATE OF JUDGMENT:                                       February 28, 2002

APPEARANCES:

For the Appellant:                                                 The Appellant himself

Counsel for the Respondent:              R. Scott McDougall

COUNSEL OF RECORD:

For the Appellant:                

Name:                                --

Firm:                  --

For the Respondent:                             Morris Rosenberg

                                                                Deputy Attorney General of Canada

                                                                                Ottawa, Canada

2001-985(GST)I

BETWEEN:

PHILIP DAVIDSON,

Appellant,

and

HER MAJESTY THE QUEEN,

Respondent.

Appeal heard on November 9, 2001, at Calgary, Alberta, by

the Honourable Judge C.H. McArthur

Appearances

For the Appellant:                      The Appellant himself

Counsel for the Respondent:      R. Scott McDougall

JUDGMENT

          The appeal from the assessment made under the Excise Tax Act, notice of which is dated September 20, 2000, and bears number 10CT0100322 is dismissed.

Signed at Ottawa, Canada, this 28th day of February, 2002.

"C.H. McArthur"

J.T.C.C.