http://decision.tcc-cci.gc.ca/tcc-cci/decisions/en/item/109217/index.do 
Javaid v. The Queen (April 17, 2015 – 2015 TCC 94, Woods J.).
Précis: This decision is one of a number of recent cases where CRA denied the GST New Housing Rebate in situations where an accommodation party joined the agreement of purchase and sale, whether in the first instance or by means of a subsequent assignment, to augment the credit of the taxpayer seeking to purchase a home as a primary residence. Mr. Javaid signed the agreement of purchase and sale for the home in question on May 31, 2010. Subsequently a Mr. Abbas was added as a co-purchaser. He appears to have gotten cold feet and was replaced by a Mr. Zia. He was in turn replaced by a Mr. Riaz. Ultimately the property was conveyed to Mr. Javaid and Mr. Riaz on December 1, 2011 pursuant to a direction signed by Mr. Javaid and Mr. Zia (Mr. Riaz never replaced Mr. Zia on the agreement of purchase and sale). The Crown argued that Mr. Zia was not a qualified purchaser since he never intended to reside in the home. The Court held that on the evidence Mr. Zia was only acting as an agent to facilitate financing the home and therefore was never a co-purchaser of the home. The Crown also argued that Mr. Javaid did not intend to occupy the home as his primary residence. This argument was raised at the commencement of trial and was not contained in the Crown’s Reply. The Court found that it was unfair to raise this argument at such a late stage and declined to consider it. The appeal was allowed, with costs.
Decision: This accommodation party case is factually more complex than most:
[20] Some of these details are set out in the following assumptions of the Minister as set out in paragraphs 10(e) to (m) of the Reply, which read:
e) the Appellant signed a purchase and sale agreement with the Builder for the construction of the Property on May 31, 2010;
f) the purchase and sale agreement was amended as follows:
i) on July 4, 2010 to insert the name of the Appellant and Raja Aneed Abas purchasers of the Property;
ii) on August 29, 2010 to insert the name of the Appellant, Raja Aneed Abas and Hasan Ahmed Zia as purchasers of the Property;
iii) on December 8, 2010 to remove the name of Raja Aneed Abbas from the agreement and insert the name of the Appellant and Hasan Ahmed Zia as purchasers of the Property;
g) Hasan Zia signed a Declaration of Trust and Undertaking on November 2, 2010 in which he agreed to co-sign the mortgage documents relating to the Property as a guarantor in order to assist the Appellant to meet the mortgage requirements;
h) Farrukh Riaz signed a Declaration of Trust and Undertaking on November 3, 2011 in which he agreed to co-sign the mortgage documents relating to the Property as a guarantor in order to assist the Appellant to meet the mortgage requirements;
i) the Appellant, Hasan Zia and Farrukh Riaz are the legal owners of the Property;
j) the Property was resold on March 30, 2012;
k) at all material times, Hasan Zia and Farrukh Riaz maintained and resided at a personal residence other than the Property; and
l) neither Hasan Zia nor Farrukh Riaz acquired the Property for use as their primary place of residence or the primary place of residence of their relation; and
m) at no time following the purchase of the Property did Hasan Zia, Farrukh Riaz, or a relation of either Hasan Zia or Farrukh Riaz occupy the Property as a place of residence.
[21] The evidence supports the above assumptions, except for paragraph 10(i). The legal owners of the property were Mr. Javaid and Farrukh Riaz. Mr. Zia did not become a legal owner of the property.
The Crown does not seem to have argued that Mr. Riaz was not a qualified purchaser (presumably because he was never actually party to the agreement of purchase and sale). The Crown focused on Mr. Zia arguing that since he never occupied, nor intended to occupy, the property Mr. Javaid was not entitled to the GST New Housing Rebate. The Court rejected this argument on the basis that Mr. Zia was simply acting as an agent:
[23] The problem that I have with this submission is that Mr. Zia was only acting in the capacity as an agent in signing the agreement of purchase and sale. This is clear on the evidence as the agency arrangement was documented in a Declaration of Trust and Undertaking.
[24] Counsel for Mr. Javaid referred me to an administrative position of the Canada Revenue Agency which states that an agent is not a recipient (GST/HST Memorandum 8.1). The relevant part of the Memorandum is reproduced below.
69. Even though the agent may appear to be the recipient of the supply as the agent is identified on the invoice as the customer, it is the principal who is ultimately liable to pay the consideration thereby making the principal the recipient of the supply.
[25] Further, the rebate provisions would not make sense if an agent who signed an agreement of purchase and sale was required to comply with the occupancy requirements of the rebate provision. I would be loath to support the position of the Crown on this point unless the legislation is very clear, which it is not.
The Court declined to consider that Crown’s alternative argument that Mr. Javaid did not intend to occupy the home as his primary residence:
[39] Counsel for Mr. Javaid informed me that the Crown first raised this issue a couple of days before the hearing. In my view, this simply was not enough time for Mr. Javaid to properly prepare for trial on this issue.
[40] The difficulty in preparing in such a short period of time was evident at the hearing. For example, counsel for Mr. Javaid mentioned that the Crown informed him that Mr. Javaid had the burden of proof to establish his residency intention.
[41] It is not correct that Mr. Javaid has this burden of proof. The only burden that is imposed on Mr. Javaid is to disprove the assumptions that the Minister made when determining the tax liability (
Hickman Motors Ltd. v. The Queen, [1997] 2 S.C.R. 336, 97 D.T.C. 5363, at p. 5376). These assumptions are reflected in paragraph 10 of the Reply and they do not deal with Mr. Javaid’s residency.
[42] In my view, it is unfair for the Crown to raise this issue at this late stage and I do not propose to consider it.
As a result the appeal was allowed with costs.