Teskey,
T.C.C.J.
(orally):—
The
appellant
elected
to
have
his
appeal
from
his
1990
reassessment
dealt
with
under
the
informal
procedure.
Issue
The
sole
issue
herein
is
the
amount
of
a
taxable
benefit
received
by
the
appellant
in
1990
from
his
employer,
the
Toronto-Dominion
Bank,
the
calculation
of
which
was
performed
by
the
Toronto-Dominion
Bank
and
accepted
by
the
Minister
of
National
Revenue.
Facts
The
respondent
in
her
reply
set
forth
assumptions
the
Minister
of
National
Revenue
made
at
the
time
of
the
reassessment.
These
are
set
forth
in
paragraph
4.
After
hearing
from
the
appellant
and
after
review
of
the
numerous
exhibits,
only
assumptions
(a)
and
(b)
remain
intact.
All
others
are
either
partially
correct
or
have
been
destroyed
by
the
appellant.
Dealing
with
each
one
individually,
the
evidence
discloses
as
follows:
(c)
The
appellant
and
his
wife
purchased
a
home
in
1984,
which
purchase
was
concluded
July
17,
1984.
They
assumed
an
existing
first
mortgage
which
happened
to
be
with
the
Toronto-Dominion
Bank
of
$34,529
which
had
a
three
year
term
and
was
due
and
payable
in
full
on
the
1st
day
of
August,
1987.
The
interest
rate
was
11.75
per
cent
per
annum,
calculated
half-yearly,
not
in
advance,
and
payable
in
blended
equal
monthly
payments
of
principal
and
interest
in
the
amount
of
$350.28.
This
was
a
25
year
amortization.
At
the
same
time,
the
appellant
received
from
his
employer
a
home
purchase
loan
of
$40,400
by
virtue
of
his
office
or
employment.
This
was
a
demand
mortgage
with
an
interest
rate
of
prime
plus
one
per
cent
(d)
The
first
mortgage
assumed
by
the
appellant
was
a
normal
arm's
length
mortgage
and
had
an
amortization
period
of
25
years.
(e)
The
first
mortgage
had
a
three
year
term
and
was
due
and
payable
in
full
on
August
1,
1987.
The
second
mortgage
was
due
on
demand.
(f)
The
first
mortgage
was
not
due
in
1989
and
was
not
callable
unless
in
default
until
due
on
August
1,1987.
This
mortgage
was
renewed
for
a
further
five
year
period
in
1987
at
an
interest
rate
of
ten
per
cent
per
annum.
(g)
The
loan
cannot
be
deemed
to
be
a
new
home
purchase
loan
in
1989,
but
would
be
one
in
1987
at
the
time
of
renewal.
(h)
The
1989
prescribed
rate
on
the
first
mortgage
has
no
relevance
to
this
case,
the
appropriate
period
being
at
the
time
of
renewal,
namely
1987.
(i)
The
facts
alleged
herein
are
irrelevant.
(j)
The
appellant
has
paid
interest
on
the
renewed
mortgage
at
the
rate
of
ten
per
cent
per
annum,
which
mortgage
was
due
and
payable
in
full
on
April
1,
1992.
(k)
The
interest
benefit
has
to
be
recalculated.
Analysis
Without
the
respondent
producing
a
written
agreement
to
the
contrary
between
the
appellant
and
the
Toronto-Dominion
Bank
on
the
calculation
of
the
taxable
benefit,
the
Court
must
look
at
what
the
appellant
has
signed
and
produced.
It
appears
from
all
the
exhibits
that
the
Toronto-Dominion
Bank
is
calculating
the
taxable
benefit
contrary
to
the
actual
written
documents
and
unless
the
appellant
has
agreed
to
this
there
is
no
reason
for
the
Court
to
accept
the
erroneous
Toronto-Dominion
Bank
calculation,
which
the
respondent
has
accepted.
The
appeal
is
allowed
with
costs
and
the
matter
is
referred
back
to
the
Minister
for
reconsideration
and
reassessment
on
the
basis
that
the
interest
benefit
received
by
the
appellant
is
to
be
calculated
by
using
the
agreed
interest
rate
on
the
first
mortgage
with
the
Toronto-Dominion
Bank
of
ten
per
cent
per
annum
for
the
whole
of
1990.
Thank
you.
Appeal
allowed.
Email this Content