572256 Ontario – Tax Court of Canada finds that where a corporation acquired property on behalf of another, the agency rather than trust relationship predominated

Paris J found that, notwithstanding the absence in evidence of a written agency agreement, a corporation (SVO) had purchased property as agent for the taxpayer and others, so that the taxpayer’s pro rata portion of the maintenance and upkeep expenses of SVO entitled it to claim input tax credits. In this regard, Paris J relied on the passage in Scott, The Law of Trusts (also quoted in De Mond) stating:

If [a person] undertakes to act on behalf of the other and subject to his control he is an agent; but if he is vested with the title to property that he holds for his principal, he is also a trustee. In such a case, however, it is the agency relation that predominates, and the principles of agency, rather than the principles of trust, are applicable.

Neal Armstrong. Summary of 572256 Ontario Ltd. v. The Queen, 2017 TCC 108 under General Concepts – Agency.