http://decision.tcc-cci.gc.ca/tcc-cci/decisions/en/item/100185/index.do 
Al Hossain v. The Queen (December 30, 2014 – 2014 TCC 379, Lyons J.).
Précis: Mr. Al-Hossain signed an agreement of purchase and sale to buy a house to occupy as his primary residence. When he realized he would have difficulty to obtain financing he had a friend, Mr. Khandaker, agree to be co-owner as an accommodation. Title was taken in both names but Mr. Khandaker had no intention of occupying the property. Mr. Al-Hossain was denied the GST New Housing Rebate because of Mr. Khandaker’s name on title. The Court rejected the argument that Mr. Khandaker was a bare trustee for Mr. Al-Hossain since there was no trust agreement reduced to writing.
Decision: This is a decision concerns an application for a GST New Housing Rebate. Mr. Al-Hossain wanted to buy a house but needed a friend to sign as co-purchaser in order to qualify for financing:
[2] On May 13, 2010, the appellant signed an agreement of purchase and sale (the “Agreement”) to acquire the property from Brookfield Homes Ontario Limited (the “Builder”) for consideration of $361,288.62 with a deposit of $25,000. The closing date was scheduled for July 12, 2010.
[3] From the outset, the appellant realized that he would have difficulty obtaining financing to close the transaction. He had four days to decide if he wished to proceed with the transaction and, if not, could have obtained his full deposit, without penalty, from the Builder. Instead, he wanted to proceed and Refath Khandaker, his friend, agreed to assist the appellant.
[4] The appellant and Mr. Khandaker (“both”) met a mortgage broker from the Bank of Nova Scotia Mortgage Development Managers who explained that the simplest way was for Mr. Khandaker to be added as a co-owner of the property to satisfy Scotiabank’s requirement (the “Lender”).
[5] A commitment notification, dated June 4, 2010, was issued by the Lender to both individuals approving a five-year term first mortgage loan with respect to the property (“Commitment”) and requiring them to execute a Personal Credit Agreement for the mortgage loan (“Credit Agreement”). The same day, both individuals executed the Credit Agreement promising to pay the mortgage loan and acknowledging receipt of the Cost of Borrowing Disclosure Statement. They executed the Commitment on June 8, 2010.
[6] Mr. Kasman, the appellant’s lawyer, testified that he had explained to both that if they wanted to close the deal that Mr. Khandaker would need to be a co‑purchaser and be placed on title to the property as a co-owner to satisfy the Lender’s requirement. Mr. Kasman informed the Builder’s lawyer that the appellant had informed him of the Builder’s awareness of the Lender’s requirement. The Builder’s lawyer suggested that Mr. Khandaker be added as a purchaser to the Agreement.
[7] On June 22, 2010, a document described as an Amendment to the Agreement was signed by Mr. Khandaker, the Builder’s representative and the same witness that had signed the May 13, 2010 Agreement. The Amendment added him to the Agreement as a purchaser. Mr. Kasman stated that the June 22, 2010 document (“amended Agreement”) formed part of the May 13, 2010 document and that Mr. Khandaker understood what he was signing. The amended Agreement also acknowledges that it was understood and agreed between the Builder and the appellant that this change be made to the agreement signed by the appellant on May 13, 2010. The appellant testified that he was aware that the amended Agreement had been signed and did not express any concerns nor take steps to instruct Mr. Kasman to withdraw or contact the Builder nor indicate it should not be part of the agreement of purchase and sale.
[8] An application for the Rebate in respect of the property was signed by the appellant on July 9, 2010 and shows both individuals as owners of the property. The Minister of National Revenue (the “Minister”) disallowed the Rebate.
Mr. Khandaker had no intention of occupying the home; he was simply doing a favour for Mr. Al-Hossain.
The Tax Court Judge rejected the notion that Mr. Khandaker simply acted as a trustee for Mr. Al-Hossain:
[27] Turning briefly to appellant counsel’s assertion that the evidence supports that the appellant is the true beneficial owner and Mr. Khandaker was a bare trustee holding a 0.01%, neither the Acknowledgement nor the Statutory Declaration existed before the Agreement or the amended Agreement. The creation of a trust must be properly documented containing the requisite elements of a trust, dated, signed and in existence prior to or contemporaneous with the matter that is the subject of the trust arrangement. Based on the evidence, I find that no trust arrangement was in existence at the relevant time and, therefore, it is unnecessary for me to consider this further.
[28] Pursuant to paragraph 245(2)(g), a particular individual is required to occupy the unit after substantial completion. Mr. Khandaker had never been an occupant of the property nor was he a qualified relative. I find that Mr. Khandaker also fails to satisfy this requirement.
[29] I accept Mr. Kasman’s evidence that Mr. Khandaker understood the nature of his involvement and that he was signing as a co-purchaser and co-owner and that the appellant was aware that in structuring the transaction in the manner he did that there would be a risk that he would be disentitled to the Rebate.
[30] I conclude that since the legislative requirements under paragraphs 254(2)(b) and (g) have not been satisfied by the particular individual, the Minister was correct and the appellant is not entitled to the Rebate.
[31] The appeal is dismissed. There will be no order as to costs.
Comment: The Judge’s comment that in order to be effective a trust arrangement must be “dated, signed and in existence prior to or contemporaneous with the matter that is the subject of the trust arrangement” seems suspect. I am not aware of any requirement that a trust arrangement must be reduced to writing or dated. While they are somewhat uncommon the law recognizes oral trusts and trusts implied from conduct. It is true however that the trust must be in existence and satisfy the three certainties in order for it to be effective over the alleged subject matter.