http://decision.tcc-cci.gc.ca/site/tcc-cci/decisions/en/item/63269/index.do 
Tsenkova, Garnenhov v. The Queen[1] (October 9, 2013) is an appeal from the Minister’s decision denying the appellant’s application for a GST/HST New Residential Rental Rebate Property Rebate on the basis that the property in question was not a “qualifying residential unit” under subsection 256.2(1) of the Excise Tax Act.
The case was triggered by the language in an agreement the appellant entered into with a property manager:
[3] On December 3, 2010, the Appellant became the co-owner, along with her spouse, of a new residential condominium unit (“Unit”) and the GST was paid at that time. On December 30, 2010, the Appellant entered into an agreement with Premier Executive Suites (“Premier Suites Agreement”) to lease the Unit. In the preamble to the standard-form Premier Suites Agreement, the Appellant is identified as the “Landlord” and Premier Executive Suites as the “Tenant”. In clause 2, the dates for the term of the Premier Suites Agreement have been written in the spaces provided: “Jan 15 2011” to “Jan 14 2012”. Clause 2 further states that the “… Landlord agrees that the intention of the Tenant is to sub-let the premises to corporate executives for the purpose of providing temporary accommodation”.
[4] It is this last clause that gives rise to the current dispute. The Minister denied the Appellant’s claim for a rebate based on the assumption that the first use of the Unit was as “temporary accommodation” to Premier Executive Suites’ clients rather than as a “primary place of residence” occupied by a sub-lessee(s) throughout a period of at least one year as required by clause 256.2(1)(a)(iii)(B) of the Excise Tax Act.
[Footnotes omitted]
The court accepted the appellant’s evidence that she never intended to rent the property for temporary accommodation and that it had in fact been rented by the same tenant for a number of years:
[8] The Appellant purchased the Unit as an investment property. Because she lacked the experience and time to handle the rental of the Unit herself, she interviewed various property managers, ultimately deciding on Premier Executive Suites to take on the task. At no time between the purchase and lease of the Unit did the Appellant occupy or intend to occupy the Unit nor was it ever intended that Premier Executive Suites would do so. Rather, it was always the Appellant’s intention to find a long-term tenant for the Unit. Her reason for imposing this condition was to reduce the wear and tear on the Unit that would otherwise be likely to occur. This intention was communicated to Premier Executive Suites.
[9] Thus it was that, acting as the Appellant’s agent, Premier Executive Suites secured a tenant who agreed to use the Unit continuously as his/her primary place of residence for at least one year. Further support for this is found in a letter from the representative of Premier Executive Suites as well as in the documentation and timing of the transactions leading up to the first occupancy of the Unit: it was purchased on December 3, 2010; on December 30, 2010 the Premier Suites Agreement was executed leasing the Unit for a one-year period commencing January 15, 2011; on the same date, the subleasing tenant occupied the Unit. Two days later, on January 17, 2011, the Appellant signed the GST rebate application which was received by the Minister on January 28, 2011.
[10] In all the circumstances, notwithstanding the use of the term “temporary accommodation” in the standard-form Premier Suites Agreement, I am satisfied that at the time the GST was paid, it was the Appellant’s reasonable expectation under the Premier Suites Agreement that an individual would use the Unit throughout a period of at least one year as his/her primary place of residence. Indeed, as of the hearing date, the original subleasing tenant continued to reside in the Unit under a series of renewals of the original sublease pursuant to the Premier Suites Agreement.
[Footnotes omitted]
As a result the appeal was allowed.
[1] 2013 TCC 321. The decision has two names in the style of cause but only refers to one appellant. The decision does however refer briefly to a spouse as co-owner.