Sherman v. R. - FCA: Taxpayer appeal of GST New Housing Rebate dismissed from bench

Sherman v. R. - FCA:  Taxpayer appeal of GST New Housing Rebate dismissed from bench

Sherman v. Canada  (February 9, 2016 – 2016 FCA 45, Ryer (author), Webb, Rennie JJ. A.).

Précis:    Mr. Sherman was denied a GST New Housing Rebate.  His appeal to the Tax Court was dismissed and he appealed to the Federal Court of Appeal.  The Court of Appeal found that the Tax Court Judge had made no reversible error in concluding that Mr. Sherman did not have the intention to occupy the property in question as his primary place of residence.  As a result the appeal was dismissed from the bench with costs.

Decision:   The Court of Appeal rejected counsel’s attempt to reweigh the Tax Court Judge’s findings of fact:

[4]               In his reasons, the Judge determined that the key issue was the requirement in paragraph 254(2)(b). He determined that the Taxpayer failed to demolish the Minister’s assumption that the Taxpayer did not have the intention to occupy the Property as his primary place of residence, and that this failure was a sufficient reason to dismiss the appeal from the Assessment. In reaching this conclusion, the Judge found that the evidence of the Taxpayer and his cousin lacked credibility and did not satisfy him that the Taxpayer had the requisite intention to occupy the Property, as required by paragraph 254(2)(b).

[5]               In support of this conclusion, the Judge made a number of findings including that:

a)      the Taxpayer gave inconsistent explanations with respect to his occupancy of the Property;

b)      the Taxpayer provided the Canada Revenue Agency with inconsistent moving expense invoices without a plausible explanation of their differences;

c)      the Taxpayer implausibly urged the Judge to believe that he occupied the Property but did not consume any water during a significant portion of the period of such occupancy; and

d)     the Taxpayer’s evidence that he sold the Property because he was not able to live alone, for medical reasons, was belied by his purchase of another residential property, before the date of that sale, in respect of which he also claimed the New Housing Rebate.

 [7]               In this appeal, the Taxpayer takes issue with the Judge’s factual findings referred to above and offers explanations as to why it would have been open to the Judge to make different findings. In effect, we are urged to reweigh the evidence that was before the Judge and to reach conclusions more favourable to the Taxpayer. This we cannot do. In our view, there was ample evidence before the Judge that supports his conclusions. Moreover, this Court owes considerable deference to a trial judge who makes credibility findings based upon the evidence and demeanor of the witnesses who testify before him or her.

Similarly the Court of Appeal rejected the argument that the Tax Court Judge did not adequately take into account Mr. Sherman’s mental impairment at the time the property was purchased:

[9]               It is important to recall that the testimony of the Taxpayer that the Judge found lacking in consistency and credibility was given by the Taxpayer on February 4, 2015. The evidence of the Taxpayer’s cousin recounted his recollections of the Taxpayer’s condition during the years 2010 to 2013, a period considerably earlier than the date that the Judge assessed the Taxpayer’s credibility (Appeal Book at page 153). Indeed, the Taxpayer’s own evidence appears to indicate that he had been “okay” since 2014 (Appeal Book at page 150 and 151). Thus, the Taxpayer’s medical issues in the years 2010 to 2013 were not shown to have had any bearing upon the issue of the Judge’s assessment of the Taxpayer’s credibility when he gave evidence on February 4, 2015.

As a result the appeal was dismissed with costs.