Sharp v. R. – TCC: Business colleague added as co-purchaser disqualified home for New Housing Rebate

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Sharp v. The Queen (October 31, 2014 – 2014 TCC 323) involved a taxpayer who intended to purchase a home for her parents. Because there was some uncertainty whether her parents would want to move to the new home, she agreed with a business colleague that he would be a co-purchaser, in effect “hedging her bets”.

[2] A brief explanation of the facts will clarify this unusual situation. In 2010, Ms. Sharp was a single mother living in Milton, Ontario. Her parents from Mississauga would commute regularly to Milton to help care for the children. A new development was to be constructed just a block away from Ms. Sharp’s home. The lots were enthusiastically sought after. Due to one potential buyer backing out, Ms. Sharp, a real estate broker herself, quickly stepped in to make an offer on May 20, 2010 (for closing in the summer of 2011) on a lot just a block away from her own home. She intended this to be her parents’ home. Upon announcing this transaction to her mother in May 2010, her mother balked at the idea. Ms. Sharp testified that her mother’s reaction was not a complete surprise but she had every expectation that her parents would come around.

[3] To hedge her bets (my words not hers), Ms. Sharp spoke to a friend and business colleague, Mr. Da Silva, who agreed to go 50/50 with her on the new home, in the event the parents opted not to buy the house jointly with Ms. Sharp. On May 21, 2010, the day after Ms. Sharp signed the Agreement of Purchase and Sale, she and Mr. Da Silva signed an amendment, adding Mr. Da Silva as a purchaser. The builder, Mattamy Homes (“Mattamy”), signed the Agreement of Purchase and Sale on May 25, 2010.

[4] Mr. Da Silva testified that he too believed Ms. Sharp’s parents would come around, but he felt he could not lose in the then market if it came to pass that he bought the property on a 50/50 basis with Ms. Sharp. It was clear he was helping a friend in case she got in financial trouble, but also clear that it would be an investment for him if Ms. Sharp’s parents did not proceed. He believed his best security was to sign on as a purchaser.

[8] When the property was ready for possession, in late summer 2011, Ms. Sharp, Mr. Da Silva and Ms. Sharp’s parents all signed a direction re title authorizing Mattamy and their lawyers to transfer title to Ms. Sharp and her parents. The parents took possession August 21, 2011 and title was transferred to them and Ms. Sharp. The parents remain in the premises.

The appellant argued that Mr. Da Silva was an agent or bare trustee and therefore his name on the agreement of purchase and sale should not prevent Ms. Sharp from receiving the New Housing Rebate. While sympathetic, the court was unable to accept this interpretation based on the facts before it:

[25] Ms. Yasny suggests that Ms. Sharp and her parents should be considered in the same light, as being home buyers for whom the rebate is intended. They fall within the spirit of the legislation. I do not disagree with that sentiment. However, unlike Rochefort, where I could find a justifiable legal position bringing the Rocheforts within the spirit and wording of the legislation, I cannot find a way to accomplish the latter for Ms. Sharp, despite able and innovative arguments by her counsel. On the facts as I find them, I am unable to conclude there is a trust, agency or financing arrangement that would somehow remove Mr. Da Silva as a “particular individual” for purposes of the rebate. This is unfortunate given the intentions of the Parties. I must, however, dismiss the Appeal.