SEXTON J.A.
EVANS J.A.
BETWEEN:
Appellant
and
Heard at Ottawa, Ontario, on January 23, 2007.
Judgment delivered from the Bench at Ottawa, Ontario, on January 23, 2007.
REASONS FOR JUDGMENT OF THE COURT BY: SEXTON J.A.
Docket: A-470-05
Citation: 2007 FCA 57
CORAM: LÉTOURNEAU J.A.
SEXTON J.A.
EVANS J.A.
BETWEEN:
JOHN F. THOMAS
Appellant
and
HER MAJESTY THE QUEEN
Respondent
REASONS FOR JUDGMENT OF THE COURT
(Delivered from the Bench at Ottawa, Ontario, on January 23, 2007)
[1] The appellant was employed in St. John, N.B. with J.D. Irving Ltd. Prior to this employment he had worked in Ottawa.
[2] After a little more than one year, the appellant was terminated by the employer. As part of the settlement agreement the employer agreed to buy the appellant's house for an amount equal to his expenses in having it constructed. This amount exceeded the fair market value of the land by $91,870.
[3] The appellant was assessed for tax on this amount as being a benefit from his employment.
[4] The evidence was that the appellant ceased work in June 1998. The appellant was allowed to stay in the house until October 1998, at which time he moved back to Ottawa.
[5] The appellant claimed he moved back to Ottawa in order to carry on a consulting business but he did not commence such work until June 1999.
[6] The appellant claims that he received no benefit by reason of the payment from the employer within the meaning of subsection 6(19) of the Income Tax Act. He claims that his move to Ottawa was an eligible relocation within the meaning of subparagraph 248(1)(a)(i).
[7] Pursuant to subsection 6(20) amounts paid with respect to eligible housing losses get tax relief.
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6(20) For the purpose of paragraph (1)(a), an amount paid at any time in a taxation year in respect of an eligible housing loss to or on behalf of a taxpayer or a person who does not deal at arm's length with the taxpayer in respect of, in the course of or because of, an office or employment is deemed to be a benefit received by the taxpayer at that time because of the office or employment to the extent of the amount, if any, by which
(a) one half of the amount, if any, by which the total of all amounts each of which is so paid in the year or in a preceding taxation year exceeds $15,000 exceeds (b) the total of all amounts each of which is an amount included in computing the taxpayer's income because of this subsection for a preceding taxation year in respect of the loss.
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6(20) Pour l'application de l'alinéa (1)a), le montant payé au cours d'une année d'imposition au titre d'une perte admissible relative au logement à un contribuable ou à une personne avec laquelle il a un lien de dépendance, ou pour le compte de l'un ou l'autre, relativement à une charge ou à un emploi, ou dans le cadre ou en raison d'une charge ou d'un emploi, est réputé être un avantage reçu par le contribuable au moment du paiement en raison de la charge ou de l'emploi, jusqu'à concurrence de l'excédent éventuel du montant visé à l'alinéa a) sur le montant visé à l'alinéa b): a) la moitié de l'excédent éventuel, sur 15 000 $, du total des montants ainsi payés au cours de l'année ou d'une année d'imposition antérieure;
b) le total des montants dont chacun est inclus dans le calcul du revenu du contribuable au titre de la perte par l'effet du présent paragraphe pour une année d'imposition antérieure.
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[8] The question then is whether the appellant had an eligible housing loss. Subsection 6(22) provides that an eligible housing loss means a housing loss in respect of an eligible relocation.
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6(22) In this section, "eligible housing loss" in respect of a residence designated by a taxpayer means a housing loss in respect of an eligible relocation of the taxpayer or a person who does not deal at arm's length with the taxpayer and, for these purposes, no more than one residence may be so designated in respect of an eligible relocation.
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6(22) Au présent article, "perte admissible relative au logement" quant à une résidence désignée par un contribuable s'entend d'une perte relative au logement se rapportant à une réinstallation admissible du contribuable ou d'une personne avec laquelle il a un lien de dépendance. À cette fin, le contribuable ne peut désigner plus d'une résidence relativement à une réinstallation admissible.
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[9] The next question which arises is whether the appellant had an eligible relocation. Subparagraph 248(1)(a)(i) provides that an eligible relocation means inter alia a relocation where it occurs to enable the taxpayer to carry on a business at another location.
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"eligible relocation" means a relocation of a taxpayer where
(a) the relocation occurs to enable the taxpayer (i) to carry on a business or to be employed at a location in Canada (in section 62 and this subsection referred to as "the new work location"), or
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« réinstallation admissible » Réinstallation d'un contribuable relativement à laquelle les conditions suivantes sont réunies: a) elle est effectuée afin de permettre au contribuable: (i) soit d'exploiter une entreprise ou d'occuper un emploi à un endroit au Canada (appelé "nouveau lieu de travail" à l'article 62 et au présent paragraphe),
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[10]
The Tax Court Judge
found that the evidence
did not disclose that the housing loss occurred to enable the appellant to
carry on business in Ottawa. The Tax Court Judge further
held that the housing loss arose, not because the appellant was relocated to Ottawa, but because his employment
was terminated.
[11]
While her wording is
not as clear as it might be, the Tax Court Judge set out all of the relevant
sections cited above immediately prior to her findings and her statements show
that the Tax Court Judge had these sections in mind and knew that the
relocation did not occur to enable the appellant to carry on business in
Ottawa. This is the proper test.
[12]
The findings of the
Tax Court Judge were essentially findings of fact. We are unable to conclude
that the Tax Court Judge made a palpable and overriding error of fact in her
findings or that she made any error of law.
[13] The appeal will therefore be dismissed with costs.
FEDERAL COURT OF APPEAL
NAMES OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: A-470-05
APPEAL FROM A JUDGMENT OF THE TAX COURT OF CANADA DATED SEPTEMBER 14, 2005, DOCKET NO. 2004-3353(IT)G
STYLE OF CAUSE: JOHN F. THOMAS v. HER MAJESTY THE QUEEN
PLACE OF HEARING: OTTAWA, ONTARIO
DATE OF HEARING: JANUARY 23, 2007
REASONS FOR JUDGMENT OF THE COURT BY: LÉTOURNEAU, SEXTON, EVANS JJ.A.
DELIVERED FROM THE BENCH BY: SEXTON J.A.
APPEARANCES:
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FOR THE APPELLANT
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FOR THE RESPONDENT
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SOLICITORS OF RECORD:
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Sudbury, Ontario |
FOR THE APPELLANT
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Deputy Attorney General of Canada |
FOR THE RESPONDENT
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