http://decision.tcc-cci.gc.ca/tcc-cci/decisions/en/item/230998/index.do
Ngai v. The Queen (May 8, 2017 – 2017 TCC 79, Russell J.).
Précis: In March of 2012 Ms. Ngai, a real estate agent, signed an agreement to purchase a condominium along with one of her clients. The client backed out and her nephew, Mr. Ng, took the client’s place. The evidence was that her nephew intended to occupy the condo as his primary residence and that Ms. Ngai was on title (along with her husband, Mr. Kennedy) as a bare trustee. The sale closed in December of 2012. The nephew decided that the commute was too long and put the condo up for lease and then for sale. The agreement of purchase and sale was signed in January of 2013 and the sale closed in February of 2013. Ms. Ngai applied for a New Housing Rebate which CRA refused. She appealed to the Tax Court. The Court accepted her evidence, and that of her nephew, and allowed her appeal. There was no order as to costs since this was an informal procedure appeal.
Decision: While the facts of this case look a bit odd, the Court accepted the evidence of Ms. Ngai and Mr. Ng, both of whom testified at trial:
[9] At the December 6, 2012 closing Ms. Ngai advised her lawyer that she and her husband Mr. Kennedy were only involved to assist Mr. Ng with getting approval for his mortgage so he could acquire the property. The lawyer apparently advised that their names also go on the title for “protection” as they were named as co-borrowers on the mortgage. The resultant registered title reflected that Mr. Ng had a 50% interest as tenant in common, Ms. Ngai had a 49% interest as tenant in common and Mr. Kennedy had a 1% interest as tenant in common. [36] However, I find, in considering the evidence in its totality as noted herein, that on a balance of probabilities the actual legal relationships established were that of agent and bare trustee on the parts of Ms. Ngai and Mr. Kennedy, vis-à-vis their respective interests in the subject property held by them for Mr. Ng in furtherance of their intention to aid him in obtaining a mortgage so as to permit his acquisition of beneficial title in the property.
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[37] The “protect” reference by the lawyer at time of closing does not itself overturn what to me, in considering all of the evidence, was the clear intent throughout of both Ms. Ngai and Mr. Kennedy, being to assist Mr. Ng ultimately in acquiring beneficial ownership to the condominium.
[38] It also must be remembered that there is no dispute that with the February 2013 closing of the subsequent sale of the subject property, Mr. Ng and only Mr. Ng received all the net proceeds of the sale. Ms. Ngai and Mr. Kennedy did not receive any proceeds for signing off on the conveyances or their respective 49% and 1% interests in the property, held in trust or in agency for Mr. Ng.
[39] This key fact is strongly supportive of my conclusion that Ms. Ngai and Mr. Kennedy were acting solely as agents and bare trustees for Mr. Ng. Although not a subject raised in the hearing, in my view this agency and bare trustee relationship clearly extends to Ms. Ngai having made the rebate application itself, in her capacity as agent and bare trustee for Mr. Ng. I readily infer from all the evidence that Mr. Ng would be recipient of the benefit of any of the subject rebate being granted, as reimbursement of an adjustment item Mr. Ng paid or financed at the December 2012 closing when he acquired beneficial title to the new condominium.
[40] In consideration of all of the foregoing, I conclude that Ms. Ngai acted throughout as agent and bare trustee for Mr. Ng, including in making the application for the rebate. Thus per Javaid she was not a “particular individual”; but rather Mr. Ng, as principal of the agency relationship, did satisfy the requirements of being a “particular individual”.
Thus the appeal was allowed. There was no order as to costs since this was an informal procedure appeal.