Seidlik v. R., [1998] 2 C.T.C. 3206

Beaubier T.C.J.:

1 This appeal pursuant to the Informal Procedure was heard at Regina, Saskatchewan on February 16, 1998. The Appellant and Raymond Harding testified for the Appellant. The Respondent called an appraiser of farm property, John Grey to testify.

2 The Appellant deducted his farm real property taxes and depreciated farm buildings in both 1991 and 1992 in respect to a quarter section of land known as the North East Quarter of Section 1, Township 30, Range 24, West of the 2nd Meridian (“NE 1”) near Watrous, Saskatchewan.

3 The Respondent's counsel conceded the sum claimed in respect to property taxes, which form part of the total reassessment. As described, the total reassessment was based upon the false premise that the Appellant owned all of NE1.

4 The second portion of the appeal relates to the depreciation on farm buildings claimed by the Appellant. The Appellant claims that he purchased five quarter sections (approximately 800 acres) of farmland from the Royal Bank of Canada along with the buildings on NE 1 in 1991 for $90,000. He says he paid $3,000 per quarter for the land and $75,000 for the buildings on NE 1.

• 1. He received title for three of the quarter sections in 1991.

• 2. He and his son Brian obtained joint title to NE 1 and SE 1 (320 acres) in 1995. In the affidavit of value and true consideration to the transfer of NE 1, the Appellant swore that the value of the land and buildings was $3,000.

• 3. The Appellant claimed all of the depreciation for the buildings on NE 1 in 1991 and 1992.

6 The Appellant's affidavit of value of $3,000 on the transfer of NE 1 was false. His claim for 100% of the depreciation of the buildings was false and wrong on the evidence before the Court. The Appellant may have been leasing NE 1, he may not have had any legal interest in the title and in any event, he did not have more than a legal one-half interest in the buildings. Without his written bid to the Royal Bank on NE 1 and supporting acceptable independent evidence respecting the title, the Appellant is not believed.

• 1. In 1991 the buildings and 800 acres of land had a fair market value, based on comparable sales, of $130,000.

• 2. The Appellant got a bargain when he paid $90,000 to the Royal Bank of Canada which had been trying to sell the property for a few years.

• 3. The land value, based on comparables, was $76,680.

• 4. The buildings were built for an 800 head cattle operation which failed. The Appellant's 130 head cattle operation could not use these buildings economically and they could not be sold economically on the market. Moreover, many structures were in only a fair condition.

• 5. The buildings constituted a residuary value to the land value in the purchase price and therefore were $90,000 - $76,680 = $13,320, which Mr. Grey rounded to $16,000.

8 The appraiser's figures were not the figures in the reassessment of the Appellant which was more generous to him. That reassessment was also based on the premise that the Appellant owned all of the buildings.

9 The Appellant's explanation of the alleged delay in registering the East1/2of Section 1 in his and his son's names is not accepted. His explanation of his affidavit of value and consideration is not accepted. These have thrown his testimony into doubt. He has failed to meet the onus of proof.

10 The Court accepts the evaluations of the Respondent's appraiser and in particular his valuation of the land and, in this particular case, his fixing of the value of the buildings as constituting the residue of the purchase price found by the appraiser.

11 On the evidence before the Court, it appears that the Appellant had no legal interest in the title to the buildings in 1991 and 1992 and that his claim for any depreciation is false. His maximum possible interest in 1991 and 1992 was a one-half interest, but that was not proved by the Appellant.

12 The appeal is dismissed.