http://decisions.fca-caf.gc.ca/fca-caf/decisions/en/item/143520/index.do
Ranjbar v. Canada (April 15, 2016 – 2016 FCA 116, Dawson (author), Near and Boivin JJ. A.).
Précis: The taxpayer claimed a New Housing Rebate in respect of a home (the “Richmond Hill property”) which she had contracted to purchase but which she never occupied. The Tax Court found that she had intended to occupy the Richmond Hill property as her primary residence but that her failure to in fact occupy the residence was fatal to her claim pursuant to clause 254(2)(g)(i)(A) of the Excise Tax Act (the “ETA”). She appealed to the Federal Court of Appeal which held that the taxpayer was entitled to the Rebate under the provisions of subparagraph 254(2)(g)(ii) of the ETA:
(g) either
(i) the first individual to occupy the complex or unit as a place of residence at any time after substantial completion of the construction or renovation is
(A) in the case of a single unit residential complex, the particular individual or a relation of the particular individual, and
(B) in the case of a residential condominium unit, an individual, or a relation of an individual, who was at that time a purchaser of the unit under an agreement of purchase and sale of the unit, or
(ii) the particular individual makes an exempt supply by way of sale of the complex or unit and ownership thereof is transferred to the recipient of the supply before the complex or unit is occupied by any individual as a place of residence or lodging,
The Crown did not dispute the application of subparagraph 254(2)(g)(ii) but argued that the Tax Court Judge erred in accepting the taxpayer’s evidence of intent. The Court of Appeal rejected the Crown’s argument and allowed the appeal but did not make an award of costs.
Decision: The Court of Appeal rejected the Crown’s argument that the Tax Court Judge erred in accepting the taxpayer’s evidence of her intent to occupy the Richmond Hill property as her primary residence:
[13] More troubling is the fact that during closing argument the Judge stated that he did not “need to hear” from counsel for the respondent with respect to the Richmond Hill property. The respondent does not argue that this, in the particular circumstances of this case, vitiates the Judge’s decision. Rather, she submits that had the Judge heard her submissions the Judge “might not” have fallen into error.
[14] It is a fundamental principle of our adversarial system that a party has the right to be heard before a court makes a decision adverse to the party’s interest.
[15] This said, the issue of the appellant’s intention was squarely raised by the respondent in her Reply to the Notice of Appeal. In determining that the appellant was not eligible for the rebate the Minister assumed that at “no time following the purchase of the [Richmond Hill] property did the Appellant intend that she or an individual related to her would reside at the [Richmond Hill property] and use it as their primary place of residence”. The appellant was cross-examined on the Minister’s assumptions.
[16] In this circumstance, I am satisfied that the issue of intent was in play such that the respondent was heard on this issue.
[17] It follows that, despite the cogent submissions of counsel for the respondent, I would allow the appeal and set aside the judgment of the Tax Court in part as it relates to the Richmond Hill property, and, pronouncing the judgment that should have been made, I would return the assessment to the Minister for re-assessment on the basis that the appellant is entitled to the GST/HST new housing rebate in respect of the Richmond Hill property.
[18] Having regard to the totality of the facts and circumstances, I would not make an award of costs.