Docket: A-110-15
Citation: 2017 FCA 205
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CORAM:
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PELLETIER J.A.
BOIVIN J.A.
GLEASON J.A.
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BETWEEN:
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JIM BRASSARD
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Appellant
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and
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HER MAJESTY THE
QUEEN
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Respondent
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REASONS FOR
JUDGMENT
PELLETIER J.A.
[1]
Mr. Jim Brassard appeals from the decision of
the Tax Court of Canada, cited as 2015 TCC 29, dismissing his appeal from the
Minister’s assessment pursuant to section 160 of the Income Tax Act, R.S.C.,
1985, c. 1 (5th Supp.)(the Act), making Mr. Brassard jointly liable for his
brother’s tax debt in the amount of $66,264.37. The Minister alleged that Mr.
Brassard’s brother, Victor Brassard, transferred to Mr. Brassard real property
for less than fair market value at a time when Victor Brassard was a tax
debtor. This triggered the application of section 160 of the Act.
[2]
At trial, Mr. Brassard, who represented himself,
challenged the Minister’s assessment of the fair market value of the property
as of the date of its transfer to him. He did so by attacking the appraisal
prepared by an appraiser employed by the Canada Revenue Agency. The appraiser
prepared an appraisal based on records obtained from the British Columbia Assessment
Authority, five comparable sales of nearby properties at or near the material
time, and a drive-by inspection. The appraiser’s opinion was that the property
was worth $175,000 in October 2005, the date at which the transfer between the
brothers took place. When the appraiser did her drive-by, she saw two mobile
homes on the property and included their value in her opinion as to the value
of the property. Subsequent investigation showed that one of the mobile homes
did not belong to the owner of the land, Victor Brassard, at the material time
so the Minister deducted the value of the trailer ($54,400) from the appraised
value. In the end, the Minister proceeded on the basis that the value of the
property as of the date of the transfer, October 2005, was $120,600.
[3]
In calculating the benefit received by Mr.
Brassard at the time of the transfer, the Minister assumed that Mr. Brassard
paid $50,000 for the property.
[4]
Mr. Brassard attempted to show at trial that he
had in fact paid more than $50,000 for the property. He was able to show that
he paid his brother $27,000 by way of bank drafts. However, he was not able to
establish that he discharged a mortgage on the property. Nor was he able to
show the value of the improvements he added to the property while it was in his
brother’s name. As a result, Mr. Brassard was not able to show that he paid
more than $50,000 for the property.
[5]
The result was that, for purposes of section
160, Mr. Brassard acquired from his brother a property worth $120,600 for less
than fair market value at a time when the latter was a tax debtor. The amount
of Victor Brassard’s tax debt as of the date of the transfer, October 20, 2005,
and as of the section 160 assessment, November 17, 2009, were $49,703.36 and
$66,264.37 respectively. Since the amount of the benefit received by Mr.
Brassard exceeded his brother’s tax debt, he was assessed the amount of his
brother’s tax debt as of the date of the assessment.
[6]
At the hearing of the appeal, Mr. Brassard, who
continues to represent himself, sought to challenge the Minister’s
determination of the value of the property at the time of the transfer by
introducing evidence of sales of comparable properties. Mr. Brassard previously
brought a motion pursuant to Rule 351 of the Federal Courts Rules, SOR/98-106
for leave to present new evidence on appeal. That motion was dismissed. Mr.
Brassard then included that material in his motion record responding to the
notice of status review. Mr. Brassard asked to have this material entered as
evidence in the appeal. The Court declined to admit the evidence but allowed
Mr. Brassard to refer to it, after telling him it could not take it into
account
[7]
The difficulty with Mr. Brassard’s evidence of
other sales is that the fair market value of a property at a given point in
time is a question which calls for an opinion. Courts do not act upon their own
opinion of such questions but rely upon the evidence of those who have the
training and experience to be able to offer such an opinion. In this case, the
Minister presented the evidence of a Canada Revenue Agency appraiser who
explained how she arrived at her conclusion. Mr. Brassard cross-examined this
witness. In the end, the trial judge accepted the appraiser’s opinion, as
adjusted by the Minister to account for the ownership of the trailer on the
property.
[8]
The evidence of comparable sales which Mr.
Brassard sought to bring to this Court’s attention would not permit us to
substitute our opinion as to the fair market value of the property for the Tax
Court judge’s conclusion. We are in no better position than the trial judge to
substitute our opinion of fair market value for that of a person with training
and experience in this area. Furthermore, once the trial judge has come to a
conclusion on a question of fact, such as the fair market value of a property,
the Supreme Court of Canada has held that an appellate court cannot substitute
its opinion for that of the trial court except where the latter has fallen into
palpable and overriding error: see Housen v. Nikolaisen, 2002 SCC 33 at
paragraph 10, [2002] 2 S.C.R. 235. A palpable error is one which is plainly or
easily seen, while an overriding error is one which has a determinative effect
on the outcome of the case.
[9]
The Court listened to Mr. Brassard attentively
for two hours while he pointed out the various issues he had with the Tax
Court’s reasons, the Minister’s appraisal and the conduct of CRA officials.
Ultimately, bearing in mind the constraints imposed on us by the standard of
review as set out in Housen v. Nikolaisen, I find no error in the Tax
Court’s decision which would justify our intervention.
[10]
As a result, I would dismiss the appeal with
costs.
"J.D.
Denis Pelletier"
“I agree
Richard Boivin J.A.”
“I agree
Mary J.L. Gleason J.A.”
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