L'Écuyer v. R. – TCC: Tax Court accepts taxpayer’s evidence that a condo was his primary place of residence thus ​entitling him to a New Housing Rebate

L'Écuyer v. R. – TCC:  Tax Court accepts taxpayer’s evidence that a condo was his primary place of residence thus ​entitling him to a New Housing Rebate

https://decision.tcc-cci.gc.ca/tcc-cci/decisions/en/item/364381/index.do

L'Écuyer v. The Queen (February 22, 2019 – 2019 TCC 41, Lafleur J.).

Précis:   CRA rejected the taxpayer’s claim that he had purchased a new condo for use as his primary place of residence and therefore was entitled to a New Housing Rebate of GST on the unit.  Among other things CRA pointed to the low usage of electricity in the condo suggest that he did not really occupy it as a primary place of residence.  The Tax Court accepted the taxpayer’s evidence that he travelled a great deal on business dealing with several pharmacies that he owned and did not use air conditioning at all in the warmer months.  Thus the Court allowed the appeal, but without costs since this was an informal procedure appeal.

Decision:   This case simply boiled down to the fact that the Court accepted the taxpayer’s evidence which refuted the assumptions pleaded by CRA:

[26]  It is clear from Mr. L'Écuyer’s testimony, which I found reliable and credible, that his intention at the time of purchasing the condo was for his daughter to move there with him so that she could more easily get to the university, but that plan did not materialize. Mr. L'Écuyer’s testimony is plausible, given the circumstances.

[27]  I am also of the opinion that the evidence submitted at the hearing shows, on a balance of probabilities, that Mr. L'Écuyer purchased the condo in order to make it his primary place of residence. Mr. L'Écuyer’s subsequent use of the condo clearly demonstrates that the condo is his primary place of residence. In fact, Mr. L'Écuyer’s intention at the time of purchasing the condo is confirmed by the use he has subsequently made of it. The fact that he is still living in the condo as of the hearing date is the best evidence of that intention. In this regard, Chief Justice Bowman of this Court stated in Coburn Realty Ltd. v. The Queen, 2006 TCC 245, [2006] T.C.J. No. 184 (QL):

[TRANSLATION]

[10] Taxpayers’ statements regarding their purposes and intentions are not necessarily and always the most reliable basis on which an issue of this kind can be decided. The actual use of the asset is often the best evidence of the purpose of the acquisition. […]

[28]  The condo use was confirmed by the testimony of Mr. Lamarre, a disinterested witness in this case. Mr. Lamarre testified that he would pick up Mr. L'Écuyer at the condo for their many golf games and that he would go there to watch golf tournaments. According to Mr. Lamarre, the condo decor confirms his statements.

[29]  I am of the opinion that the fact that the address changes were not done is not a determinative factor in this case. The Lorraine residence was, in 2015, and still is as of the hearing date, a property owned by Mr. L'Écuyer; also, some of his family members still live there, namely his daughters and his ex-wife. He can still pick up his mail when he goes to see his children. According to his testimony, which was in no way contradicted by the Respondent’s evidence, Mr. L'Écuyer travels a great deal. I find it plausible that he did not want his mail piling up in his condo mailbox. In Yang v. The Queen, 2009 TCC 636, [2009] T.C.J. No. 511 (QL), the Court also found that failing to do address changes was of lesser importance in cases where family members were still living at the former residence. In this case, I find that this factor is not very significant.

[30]  Similarly, Mr. L’Écuyer’s testimony that he left the cottage in 2014 due to water problems is credible and reliable. The evidence showed that he rented an apartment in Laval at that time (2014-2015), given the delays in the condo construction, but he did not do an address change. In the documents adduced by the Respondent, we see that, for a Hydro-Québec account at that time, Mr. L'Écuyer’s name is associated with an address on Le Corbusier Boulevard, in Laval. If Mr. L'Écuyer had wanted to make the cottage his primary place of residence, he would not have rented an apartment in Laval while waiting for the condo to be built.

[31]  The Respondent adduced a Hydro-Québec document estimating the electricity costs for the cottage at $3,320, which bears no date other than the printing date of November 28, 2018. Mr. L'Écuyer testified that the electricity costs were about $4,000 a year for the cottage. It was important to maintain minimum heating at the cottage; it is also clear from the evidence that the cottage was very large, having multiple bedrooms, and was poorly insulated. Also according to the evidence, Mr. L'Écuyer’s son has been living in the cottage for about a year and a half. According to the Respondent, if the cottage had actually been vacant in 2014-2015, the electricity costs should have been less than the $4,000 that Mr. L'Écuyer indicated. The Respondent also points out that an income tax statement for 2014 and 2015 was sent to Mr. L’Écuyer’s daughter at the cottage address. In my opinion, these aspects do not demonstrate that Mr. L'Écuyer’s testimony was unreliable regarding his use of the cottage at that time.

[32]  The Respondent is also of the opinion that the evidence is unclear regarding the amount of time that the condo is used, since Mr. L’Écuyer travels a lot. However, I am of the opinion that Mr. L'Écuyer’s testimony is reliable and credible when he indicates that he has no place to live other than the condo. In fact, the evidence showed that he cannot live at the Lorraine residence because his ex-wife is there, and that he does not live at the cottage because his son has been living there for a year and a half and that he had left the cottage in 2014 to go live in an apartment in Laval while waiting for the condo to be ready for delivery by the builder.

[33]  The Respondent is also of the opinion that, since Mr. L'Écuyer’s workplaces at the time in question were in the Hautes-Laurentides and Abitibi-Témiscamingue areas, this is a factor showing that the condo cannot be Mr. L'Écuyer’s primary place of residence, but that the cottage could be. However, I am of the opinion that, in light of the distance between the regions where the pharmacies and the cottage or condo were located, it is certainly plausible that Mr. L’Écuyer did not return to either the cottage or the condo given that the pharmacies were several hundred kilometres from the cottage and the condo.

Thus while the taxpayer’s living situation was complicated that did not preclude him from claiming the condo as his primary place of residence.  Thus his appeal was allowed, but without costs since this was an informal procedure appeal.