http://decision.tcc-cci.gc.ca/tcc-cci/decisions/en/item/126397/index.do
Myers v. The Queen (November 4, 2015 – 2015 TCC 275, V. Miller J.).
Précis: Ms. Myers was assessed under subsection 160(1) of the Income Tax Act in respect of the transfer to her by her husband of his share of their home at a time he had an income tax liability. Her defense was that the original acquisition of the home in their joint names was a drafting error and she was always intended to be the sole owner.
The Tax Court did not accept her evidence and dismissed the appeal with costs.
Decision: The Court rejected Ms. Myer’s argument that the lawyer representing her at the date the home was purchased, Mr. Sammis, made a mistake putting the home in the joint names of her and her husband. This was in part because of her failure to call Mr. Sammis as a witness:
[20] The Appellant and her spouse testified that their lawyer, Mr. Samis, made an error when the Property was registered in both of their names. However, they failed to call Mr. Samis as a witness at the hearing. At page 210 of Enns v Minister of National Revenue (1987), 87 D.T.C. 208 (T.C.C.), Sarchuk, T.C.J. stated the following about the failure to call witnesses:
In The Law of Evidence in Civil Cases, by Sopinka and Lederman, the authors comment on the effect of failure to call a witness and I quote:
In Blatch v. Archer (1774), 1 Cowp. 63, at p. 65, Lord Mansfield stated:
It is certainly a maxim that all evidence is to be weighed according to the proof which it was in the power of one side to have produced, and in the power of the other to have contradicted.
The application of this maxim has led to a well-recognized rule that the failure of a party or a witness to give evidence, which it was in the power of the party or witness to give and by which the facts might have been elucidated, justifies the Court in drawing the inference that the evidence of the party or witness would have been unfavourable to the party to whom the failure was attributed.
In the case of a plaintiff who has the evidentiary burden of establishing an issue, the effect of such an inference may be that the evidence led will be insufficient to discharge the burden. (Levesque v. Comeau, [1970] S.C.R. 1010, (1971), 16 D.L.R. (3d) 425.)"
[21] Counsel for the Appellant argued that Mr. Samis would have been an adverse witness because of later litigation between Mr. Samis and the Appellant and her spouse. This later litigation did not involve the subject Property.
[22] With respect, I will not assume that Mr. Samis would have been an adverse witness nor will I assume that he would not have told the truth. He is an officer of the Court. His testimony would have shed light on the very question at issue. Consequently, I draw a negative inference from the fact that the Appellant did not call Mr. Samis as a witness.
[23] There was conflicting evidence from the Appellant and Richard Myers. In cross examination by counsel for the Respondent, the Appellant admitted that Mr. Samis had reviewed the following documents with her in 2003:
• the Transfer registered in 2003 which showed Richard Myers and Deborah Myers as joint tenants;
• the Land Transfer Tax Statements which showed that Richard Myers and Deborah Myers were transferees
Richard Myers stated that Mr. Samis did not review these documents with him or the Appellant in 2003. It was his evidence that the Agreement of Purchase and Sale was signed in 2002 and it was in the Appellant’s name only. Mr. Samis was instructed to register the Property using the information on the Agreement of Purchase and Sale. I note that the Agreement of Purchase and Sale was not tendered as an exhibit.
[24] As a result of the conflicting evidence, it is my view that the testimony of the witnesses is not reliable.
[25] Richard Myers would have me believe that not only did Mr. Samis make an error but the lawyers who submitted the mortgages for registration also made errors. He stated that he signed the mortgages as guarantor. However, contrary to his testimony, the mortgages registered on the Property in 2003 list both Richard Myers and Deborah Myers as “Chargors”. The registration of the mortgage from Home Trust Company was signed and submitted by Sherwin H. Shapiro and the registration of the mortgage from the Nardis was signed and submitted by David John Albert Peirce.
[26] Richard Myers stated that they always purchased their properties in the Appellant’s name only. However, there was no evidence that they had purchased any properties prior to the subject Property.
[27] I have concluded that there was no error when the Property was registered in 2003 in the names of Richard Myers and Deborah Myers as joint tenants. In 2003, Richard Myers had both beneficial and legal title to the Property. In 2004, he transferred all of his interests in the Property to the Appellant.
As a result the appeal was dismissed, with costs.