Date: 20000411
Docket: A-119-96
Montréal, Quebec, Tuesday, April 11, 2000
| CORAM: DÉCARY J.A. |
LÉTOURNEAU J.A.
NOËL J.A.
BETWEEN:
ROBERT CÔTÉ,
Appellant,
- and -
HER MAJESTY THE QUEEN,
Respondent.
JUDGMENT
The appeal is dismissed with costs.
| Robert Décary J.A. |
Certified true translation
Martine Brunet, LL. B.
Date: 20000411
Docket: A-119-96
| CORAM: DÉCARY J.A. |
LÉTOURNEAU J.A.
NOËL J.A.
BETWEEN:
ROGER CÔTÉ,
Appellant,
- and -
HER MAJESTY THE QUEEN,
Respondent.
Hearing held at Montréal, Quebec, on Tuesday, April 11, 2000
Judgment rendered from the bench at Montréal, Quebec, on Tuesday, April 11, 2000
REASONS FOR JUDGMENT OF THE COURT: LÉTOURNEAU J.A.
Date: 20000411
Docket: A-119-96
| CORAM: DÉCARY J.A. |
LÉTOURNEAU J.A.
NOËL J.A.
BETWEEN:
ROBERT CÔTÉ,
Appellant,
- and -
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR JUDGMENT OF THE COURT
(Delivered from the bench at the hearing in Montréal,
Quebec on Tuesday, April 11, 2000)
LÉTOURNEAU J.A.
[1] Despite the articulate submission of Mr. Larouche, we were not persuaded that Judge Bowman of the Tax Court of Canada made any error of fact or law that justifies our intervention.1
[2] We have no doubt that the appellant and his partners purchased the "Place Repentigny I" buildings, described as multiple-unit residential buildings (MURB, referred to in French as IRLM), in good faith, responded to the government"s call to revive the real estate sector and to do this incurred risks. Unfortunately for the appellant, the legal position which he assumed was not the one he thought he was assuming. The legal transaction to which he was a party did not make him a "mini-developer" in the sense used by La Forest J. in Hodgkinson v. Simms ,2 but instead a purchaser in the traditional sense of the word. La Forest J. described the legal position of MURB owners as follows:
| MURBs were a product of a 1974 change in taxation policy made by the Minister of Finance to stimulate investment in rental real estate. Pursuant to regulation 1100(1) and Schedule B to the Income Tax Act, S.C. 1970-71-72, c. 63, individual taxpayers could shelter their income by claiming capital cost allowances from qualifying investments in real estate. As such, real estate developers, rather than selling apartment units on a "turn-key" basis, sold an undivided interest in the vacant land to each investor. The investors then entered into a construction contract with the developer, who would in turn construct the building on behalf of the investors. In this way investors became "mini-developers", and as such could deduct certain related costs (typically financing costs) incurred during the construction period. These deductions were known as "soft costs". |
[3] There were also other ways of achieving the same result, including the formation of a partnership or syndicate3 or the creation of a mandate.
[4] The commercial and accounting principles on which the appellant relied in this regard, though they may assist the Court in its task of interpreting tax legislation, are not rules of law and cannot alter the legal position.4
[5] In his conclusions the appellant asked to be relieved from the payment of interest on the amount owed. In the circumstances, this is not a negligible amount since the notice of assessment dates back to 1984, for the 1981 taxation year.
[6] We do not have jurisdiction to grant this request. The power to remit interest is a discretionary one and the Minister of National Revenue has been made responsible for exercising it by s. 220(3.1) of the Income Tax Act.
[7] For these reasons the appeal will be dismissed with costs.
| Gilles Létourneau J.A. |
Certified true translation
Martine Brunet, LL. B.
| FEDERAL COURT OF CANADA APPEAL DIVISION Date: 20000411 Docket: A-119-96 BETWEEN: ROBERT CÔTÉ, Appellant, - and - HE MAJESTY THE QUEEN, Respondent. REASONS FOR JUDGMENT OF THE COURT |
FEDERAL COURT OF CANADA
APPEAL DIVISION
NAMES OF COUNSEL AND SOLICITORS OF RECORD
| FILE: A-119-96 |
| STYLE OF CAUSE: ROBERT CÔTÉ, |
Appellant,
- and -
HER MAJESTY THE QUEEN,
Respondent.
| PLACE OF HEARING: MONTRÉAL, QUEBEC |
| DATE OF HEARING: TUESDAY, APRIL 11, 2000 |
| REASONS FOR JUDGMENT OF THE COURT DELIVERED FROM THE BENCH AT THE HEARING BY LÉTOURNEAU J.A. |
| APPEARANCES: Damien Larouche |
| For the appellant |
Marie-Andrée Legault
For the respondent
| SOLICITORS OF RECORD: Larouche et Girard |
401 3e rue, Bureau 2
Chibougamau, Quebec
G8P 1N6
For the appellant
Morris Rosenberg
Deputy Attorney General of Canada
Ottawa, Ontario
For the respondent
__________________1 The Tax Court of Canada decision, rendered in 1995, was reported in 1997. See 97 D.T.C. 619.
2 [1994] 3 S.C.R. 377, at 396-397.
3 Besse v. Canada (Minister of National Revenue - M.N.R.), [1999] F.C.J. No. 727.
4 Peter Hogg, Principles of Canadian Income Tax Law, 3d ed., Scarborough, Carswell, 1999, at p. 199: "Well-accepted business principles are interpretive aids, not rules of law themselves, and so defer to specific provisions in the Act." See Canderel Ltée v. Canada , [1998] 1 S.C.R. 147, Toronto College Park Ltd. v. Canada, [1998] 1 S.C.R. 183 and IKEA Ltd. v. Canada, [1998] S.C.R. 196.