Tax Court of Canada Judgments

Docket: 2003-2480(IT)I

BETWEEN:

NORMAN CARR,

Appellant,

and

HER MAJESTY THE QUEEN,

Respondent.

____________________________________________________________________

Appeal heard on March 8, 2004, at Ottawa, Ontario.

Before: The Honourable Justice Lucie Lamarre
Appearances:
Counsel for the Appellant:	The Appellant himself
Counsel for the Respondent:	Patrick Vézina

____________________________________________________________________

JUDGMENT

          The appeal from the assessment of tax made under the Income Tax Act for the 1999 taxation year is dismissed.

Signed at Ottawa, Canada, this 18th day of June 2004.

"Lucie Lamarre"

Lamarre, J.

Citation: 2004TCC434

Date: 20040618

Docket: 2003-2480(IT)I

BETWEEN:

NORMAN CARR,

Appellant,

and

HER MAJESTY THE QUEEN,

Respondent.

REASONS FOR JUDGMENT

Lamarre, J.

[1]      This is an appeal from an assessment under the Income Tax Act ("Act") made by the Minister of National Revenue ("Minister") for the appellant's 1999 taxation year. The appellant claimed, among other things, a non-refundable tax credit pursuant to subsections 118.1(1) and 118.1(3) of the Act with respect to the gift of a Sabre 27 sailboat ("boat") to Formation L'Équipage Inc., a registered charity ("Charity") within the meaning of the Act. On October 27, 1999, André Roegiers, N.A., advised the Charity that he had been requested by the owner of the boat to survey and value it. Mr. Roegiers established the value at $40,710[1] (Exhibit R-4). In reassessing the appellant, the Minister revised the value of the boat down to $27,000.

[2]      The only issue before me is whether the value of the boat exceeds the amount of $27,000 determined by the Minister for the purposes of computing a non-refundable tax credit with respect to the gift of the boat to the Charity.

[3]      The appellant did not call Mr. Roegiers to testify on the value that he assigned to the boat as at October 27, 1999. He chose to rely on his own testimony and on the Analysis of Sailboat Values provided by the respondent in Schedule A to the Reply to the Notice of Appeal ("Schedule A to the Reply"). The respondent called two witnesses: the first witness was Ms. Nathalie Locas, a real estate appraiser working for the Canada Customs and Revenue Agency ("CCRA"), who saw the boat in the course of the audit and made some notes and took some photographs of it; the second was Mr. Doug Dawson, an expert witness on the valuation of boats in the marine industry, who evaluated the boat for the respondent.

[4]      The appellant explained that the boat was constructed in Great Britain in 1975 and that the prototype was built in 1969 by Eric White of Marine Construction (U.K.) (Marcon). Between 1969 and 1979, 400 hulls were moulded for this boat (see the History of the Sabre 27, in Exhibit A-1, Tab 5). According to the appellant, the stay (the steel line that is attached to the mast) is about four times as thick as a normal stay found on many boats. It is attached to a double-sided steel plate, which means that the boat is built to a much higher level and standard of quality than an average sailboat in North America. The boat is built for the ocean and meets the stringent criteria of the Lloyd's Register of Shipping ("Lloyd's") classification society. According to the appellant, the Lloyd's certification means that a boat is built to withstand the worst storm recorded in the previous hundred years. He said that most boats are not Lloyd's certified, as that is not a requirement, but his boat was so certified. The appellant also said that the boat had an inboard Volvo Penta diesel motor, which gave the boat a higher value than a gas motor would have, and that the interior was finished in teak.

[5]      The appellant, who grew up in England and has been sailing since boyhood, purchased the boat in 1987 for $24,000 from a friend who had had it shipped over to Canada from the U.K. This friend was the sole owner of the boat prior to the appellant. It had never seen salt water, having always been in the Ottawa River. The appellant moved the boat to the Nepean Yacht Club, added equipment to it and sailed it for 12 years. In 1999, he decided to sell it. He approached Robert Blain, president of Nautilus Yachting, the broker who had in the past sold for him another, smaller boat, a Tanza 22, for a price close to the asking price. Mr. Blain had never had a Sabre 27 to sell in his 20 years of selling boats (see Exhibit A-1, Tab 10). Mr. Blain was not in Court to testify as neither counsel for the respondent nor the appellant was able to contact him. It would seem, however, that Mr. Blain told the appellant that, according to his own experience, nobody in the Ottawa market would recognize the value of the boat, and convinced the appellant that he would not get for it what he felt it was worth. They therefore both came up with a value of $27,000 for the purposes of selling it locally (see appellant's testimony, page 32 of the transcript).

[6]      The boat was put up for sale in July 1999 and remained on sale for three months without a single offer being made. The appellant said that Mr. Blain then suggested that there was a viable way of disposing of the boat that might enable him to realize fair market value. This was to give the boat to a charity recommended by Mr. Blain (see questionnaire filled in by the appellant, Exhibit R-1, Tab 1 and page 32 of the transcript). The appellant was under the impression that Mr. Blain made the arrangements to have Mr. Roegiers, the independent marine surveyor for the Charity, come in and evaluate the boat. The appellant assumed that he would have been a "reasonable expert". The appellant thought that, after the boat was valued, Mr. Blain had it shipped to Halifax, N.S. It was shipped at the appellant's expense, and the appellant then received a tax receipt (see pages 34-35 of the transcript). At that time, the boat was, in the appellant's words, in pristine condition.

[7]      The appellant said that he had no reason to believe that the boat was overvalued at $40,710. Indeed, he identified on the Internet a few similar boats in the U.K. that were advertised for sale at anywhere from $32,000 to $50,000 (see Exhibit A-1, Tab 8). However, those figures are asking prices for boats in 2004. He also relies on the Analysis of Sailboat Values provided by the respondent in Schedule A to the Reply, which shows asking prices for boats similar to his ranging from 10,500 to 16,950 pounds, or from $25,000 to $40,700 (according to the conversion rate given by the respondent).

[8]      The respondent called Ms. Nathalie Locas, a real estate appraiser with the CCRA. Her assistance had been requested by Mr. Jean Lavallée, a tax avoidance auditor, and by headquarters for real estate appraisals in Ottawa. They were auditing 100 taxpayers that had, between 1996 and 2000, donated boats to the Charity in exchange for tax receipts. Ms. Locas's mandate was to verify that the amount indicated as the fair market value of the boats on the tax receipts was appropriate. Although she has personal experience in sailing and had personally owned a sailboat in the past, she did not appraise the boats herself. Her role was limited to handling the files with respect to the valuation of the boats. She was asked to inspect the boats with Mr. Lavallée and to give the relevant information to the boat appraiser, Mr. Doug Dawson, who was hired by the CCRA to give a fair evaluation of the 100 boats under scrutiny, including the appellant's boat. Mr. Dawson, who runs a business under the name of Computer Boat Values, had provided Ms. Locas with a Sail Boat Evaluation Request Form and had asked her to fill in part of it after having seen the boats (see Exhibit R-1, Tab 2).

[9]      Ms. Locas said that she and the auditor, Mr. Lavallée, spent four days in New Brunswick in October 2000 inspecting most of the 100 boats (including the appellant's).[2] To start with, she and Mr. Lavallée spoke to Mr. Régis Lévesque, the person in charge at the Charity, and to Mr. Roegiers, their appraiser. The latter explained that the boats were appraised by adding up the value of each different part of the boat (the sail, the mast, the keel, the hull, etc.), instead of appraising the boat as a whole. In other words, he assumed that each of the boat's parts would be sold separately for its full value and that they would all be sold at the same time. Mr. Roegiers told them that he had appraised all the boats. He explained that he usually received a phone call from the owner or the broker, who would provide him with the information on the boat by phone. He then determined the value of the boat without having seen it. Ms. Locas understood that the boat was then transported to the Charity's site in New Brunswick. Ms. Locas was not aware whether that was how Mr. Roegiers appraised the appellant's boat in particular, but she did not have any indication that it was treated differently than the other boats.

[10]     Ms. Locas and Mr. Lavallée spent an average of 15 minutes looking at each boat. She took photographs from outside and inside the boat (Exhibit R-2). When she herself visited the boats, the masts, the sails and all electronic equipment had been taken out for security reasons. Nevertheless, for many boats she could use the description given by Mr. Roegiers in the notes he made at the time he did the appraisals, regarding such things as the equipment and the sails that were on the boat at the time of the gift. However, in the case of the appellant's boat, it seems that Mr. Roegiers did not make a complete appraisal; at least, Ms. Locas did not have the benefit of a full description of the boat provided by Mr. Roegiers. She therefore relied on the questionnaire filled in by the appellant at the request of the CCRA, in which he gave a description of his boat and its equipment (see Exhibit R-1, Tab 1). Most of this information is found in the Evaluation Request Form filled out by Ms. Locas and Mr. Dawson (see Exhibit R-1, Tab 2) and in the note filled out by her and attached to the form sent to Mr. Dawson (Exhibit R-3). Ms. Locas indicated that the boat was in average condition when she saw it. In so evaluating the condition of the boat, she did not look at the exterior of it because it had been sitting uncovered and exposed to bad weather conditions for a year. She determined the boat to be in average condition on the basis of the state of the interior (the wood finish, the cushions and the curtains inside the boat) and by comparing it to that of other boats. She said that of the 100 boats she inspected, there were only a few that were extra clean. Most of them were in average and some were in rough condition.

[11]     In cross-examination, she recognized that she had indicated that the boat had an alcohol stove, but did not dispute that it could have been a propane stove. She also admitted that she did not smell diesel from the engine, which, according to the appellant, is indicative of the condition of the boat with respect to the cleanliness of the motor. Ms. Locas said that in any case the boat had remained unused for one year.

[12]     Ms. Locas also said that she did not notice the hull certification stamped in the fibreglass of the boat, but said that she saw such certification on most of the boats constructed after 1980. Nor did she see the mark on the exterior of the hull or get the model name, which in the appellant's view was because she did not allot enough time to each boat. However, she certified that she inspected the appellant's boat, as each boat bore a tag with a number corresponding to the number appearing on the tax receipt pertaining to each taxpayer.

[13]     Ms. Locas finally said in cross-examination that she was aware that approximately five boats out of the 100 donated to the Charity were sold to different purchasers for a price established on the basis of the value of the whole boat (as opposed to the value of the sum of its parts). She said that the selling price in each of those cases was less than the value assigned to the boat by Mr. Roegiers, the Charity's appraiser (see pages 109 and 110 of the transcript). She recognized, however, that in the case of the appellant's boat, she did not have a list of inventory that would show how Mr. Roegiers came up with his valuation.

[14]     The respondent also called Mr. Doug Dawson to testify regarding his appraisal report (Exhibit R-5). Mr. Dawson explained that he is the fifth generation of his family to work in the marine industry. He said he was born and raised at a marina, and was vice-president of Dawson's Marina Ltd., a family boat sales business in Ontario. From 1967 to 1983, he was responsible for sales and marketing in that business. They were selling 500 boats a year, of which 10 per cent were sailboats. He said that 49 per cent of the boating in Canada is done in Ontario.

[15]     In 1983, Mr. Dawson left the family business and started up, along with his wife, a boat brokerage business under the name of Computer Boat Values. They created the concept of computer boat search, which is a multiple listing service for all the boats for sale by the brokers or marinas around the province that asked Mr. Dawson's firm to advertise for them. Mr. Dawson said that they had 4,000 boats listed on their database, which provided information on the size range, the price range and the age range of the boats and on who had listed them for sale. This database was available to Mr. Dawson's clients, that is, the marinas and the brokers who paid him to advertise their boats.

[16]     In 1985, he and his wife created the Boat Value Book ("Book") for the Canadian marine industry, which supplied all the above-mentioned information but provided the prices for which the boats sold in addition to the asking prices. Since then, the Book has been reworked to give only the average value of boats, which value is based on thousands of actual selling prices reported by marinas and brokers across Canada on a regular basis as part of the updating process. These selling prices are posted to the database adjacent to the appropriate boat, so the values in the Book are based on actual sales in the market place (see Appraisal Report, Exhibit R-5, page 13 of 14).

[17]     Excerpts from the 1999 Book, which contained over 27,000 retail values, were filed in evidence (see Exhibit R-1, Tab 9 and Exhibit R-5, page 12 of 14). The Book gives the retail price (which is the average selling price) and the average trade-in value of about 4,000 boats that are classified according to the name of the manufacturer, the model, the size and the year of construction going back to 1970. The Book also indicates the boat material (all are fibreglass) and whether the motor is gasoline - or diesel - powered and whether it is inboard or outboard.

[18]     Mr. Dawson explained how he calculates the retail value. Every three months, he gathers from the brokers and marinas the selling prices of boats of the same size and age range and he establishes the average value of a boat. If one model is sold at a higher or lower price than the average, he will verify with the broker who sold it to find out whether there were improvements on the boat or, conversely, whether there might be a particular problem with the boat. In such cases, he would simply discount the extremes. Indeed, the retail value refers to the boat as it was originally built, as far as the major equipment is concerned. Mr. Dawson said that his Book covers 40 to 50 per cent of what is sold by marinas and brokers in Ontario. He stated that out of the 4,000 selling prices that he gets, 80 per cent of them are within five points of his forecast value from the previous year. In his view, this is indicative of a solid, reliable database (see pages 126-27 and 168-70 of the transcript). The Book reflects sales made by marinas and brokers within Canada. It does not reflect sales made outside the country in currencies other than the Canadian dollar.

[19]     In 1991, Mr. Dawson's firm started a boat evaluation service for financial institutions and insurance companies, for financing and insurance purposes. Since then, they have done about 12,000 boat evaluations (such as the one at issue in this appeal). He explained that there is no need to see the boat to do an evaluation as boats are built by brand-name manufacturers to a specific length and marketed for a specific year, in a fashion similar to cars (see Appraisal Report, Exhibit R-5, page 6 of 14). Consequently, boats fit easily into different categories (year, model, size, type of motor). As long as all the pertinent information is there, Mr. Dawson can, with the help of the Book, evaluate a boat on the basis of the information provided, and then make adjustments for new equipment added and further take into consideration factors such as the condition of the boat, load hours, etc. (see pages 130-31 of the transcript).

[20]     With respect to the appellant's boat, Mr. Dawson acknowledged that it was not listed in the Book. Indeed, when a boat, like the Sabre 27 (of which there are very few in Canada), is thinly traded and there are insufficient sales data for that type of boat, it is not included in the Book. To evaluate such a boat, he does a direct comparison analysis of other boats of the same size and age. The boat has to fit in somewhere close to similar major brands that are in the Book. Here, Mr. Dawson took the average value of eight boats similar in size and age and came up with an average retail value of $13,700. The Sabre's quality and construction were factors taken into consideration by adding seven per cent to the average value of those eight boats to arrive at a value of $14,700 for the appellant's boat (see pages 157-61 of the transcript, where Mr. Dawson explains page 9 of his Appraisal Report). In so doing, Mr. Dawson took into account the higher quality of the British-built Sabre. He then added $400 for the 1999 retail value of the electronic equipment listed on the appellant's questionnaire attached to the Sail Boat Evaluation Request Form. He explained that an accessory is worth 45 per cent of its initial value once it has been installed on the boat and further depreciates by ten per cent annually. The retail value of the equipment in 1999 ($400) is based on a grid created using a long list of accessories, which is reproduced in the Book. By adding that $400 to the base value, he came up with a fair market value of $15,100 for the boat (see pages 172-73 of the transcript).

[21]     At the hearing, Mr. Dawson admitted that he evaluated the boat on the basis that it had a gas motor. He acknowledged that a diesel motor would have raised the value of the boat by approximately $1,000 back in the 1970s. As half of the boats used for comparison purposes had gas engines and half of them had diesel, he determined that the value of the boat should be increased by an extra $500 (half of $1,000), thus bringing the base price up to $15,600 (see pages 174-77 of the transcript).

[22]     Furthermore, on the basis of the appellant's testimony that the boat was in extra clean condition when it was transferred to the Charity, Mr. Dawson concluded that would add a further $900 to the boat's value. He explained this by saying that for a boat in extra clean condition five and a half per cent is added to the base price, which in this case is $15,600 (see page 182 of the transcript).

[23]     He also determined that the value should be raised by another $575 to take into account the fact that the boat had a propane stove and a genoa (foresail), which information he did not have at the time he did the evaluation. He thus came up with a value of $17,100 (see pages 179-82 of the transcript).

[24]     As the value of a boat can fluctuate by five per cent either way, he added an extra five per cent to come up with the highest potential value of the boat, namely $18,000 (page 186 of the transcript). In cross-examination, Mr. Dawson said that he did not spend much time looking for equivalent values on the Internet. He admitted that he went to only one or two sites but said that, in any event, the prices indicated there would be asking prices in 2004, which do not reflect the real value of a boat in 1999. Furthermore, he had to determine the value of the boat in relation to the Canadian market, i.e. the price it would be sold at in Canada, not in the U.K. as suggested by the appellant. He added that in the case of someone in Canada who wanted to sell a boat outside Canada, one would have to add the transportation cost (said by Mr. Dawson to be $7,000 for shipping to the U.K.), which would reduce the value of a boat sold for export. Indeed, he has never in his career seen a sailboat from Ontario sold to someone in the U.K. and, in his opinion, the expense involved in shipping the boat across the ocean has something to do with that. On the other hand, Americans have bought boats in Canada in quite significant numbers since the Canadian dollar has been really low compared to the U.S. dollar. But all these sales to Americans have been entered in the Book in Canadian dollars, because that is how they were reported by the brokers (see pages 215-16 of the transcript).

[25]     Mr. Dawson also admitted that the seaworthiness of a boat might raise its value. Indeed, such was the case with the 1978 26-foot Contessa, one of the eight boats compared to the Sabre 27. That boat's value rose by $5,000 from 1999 to 2000 because a boat of the same make (a 32-foot Contessa) had sailed around the world and that drove up the price of the 26-foot Contessa (see Appraisal Report, Exhibit R-5, page 9 of 14). Nevertheless, Mr. Dawson is of the view that sales of boats used in fresh water cannot be compared with sales of boats used in salt water. Salt water deteriorates a boat faster; however, not many such boats are seen in Ontario, so that is something they do not have to deal with. Still, Mr. Dawson said that there would be only a five per cent difference in value between the boats used in fresh water and boats used in salt water (see pages 194-95 of the transcript).

[26]     Mr. Dawson also said that the hours on a motor are not taken into consideration for sailboats as these do not have hour metres, unlike powerboats. Consequently, it is not really useful to have a diesel motor on a sailboat, and the presence of one does not necessarily raise the boat's value (see pages 198-200 of the transcript).

Analysis

[27]     The respondent's evidence is that the highest potential value of the boat at the time of the donation on October 27, 1999, was $18,000. However, the appellant was reassessed on the basis that its value was $27,000. In the Reply to the Notice of Appeal, the respondent stated that although, in her expert's opinion, the value of the boat is lower, a final fair market value of $27,000 was determined based on the prices indicated in the Analysis of Sailboat Values in Schedule A to the Reply. At the hearing, counsel for the respondent stated that he did not rely on the Analysis but relied only on his expert witness in arguing that the value cannot be greater than the $27,000 already assessed. Counsel said that the value of $27,000, which was the asking price when the boat was for sale, was accepted by the CCRA as a result of negotiations with the appellant.

[28]     On the other hand, the appellant said that he did not call Mr. Roegiers, who had evaluated his boat at $40,700, because the Analysis of Sailboat Values attached to the Reply to the Notice of Appeal was, in his view, favourable to his case. Indeed, we see there that four Sabre 27s built between 1972 and 1979 were offered for sale at prices varying between 10,500 and 16,950 pounds, which the CCRA had converted to $25,240 to $40,744. Moreover, the Analysis also provides figures respecting the asking prices for four Sabre 28s built between 1970 and 1976. Those asking prices vary from US$14,600 to US$20,000. The respondent, however, applied an exchange rate of $1.25 per U.S. dollar, which in the appellant's view is inaccurate.

[29]     The case law is clear that the determination of fair market value is a question of fact rather than a question of law (see CIT Financial Ltd. v. The Queen, 2004 F.C.A. 201, at paragraph 13).

[30]     Fair market value is not defined in the Act. However, the judicial definition accepted by the courts in Canada is that of Cattanach J. in Henderson Estate and Bank of New York v. M.N.R., 73 DTC 5471 (F.C.T.D.), at page 5476:

The statute does not define the expression "fair market value", but the expression has been defined in many different ways depending generally on the subject matter which the person seeking to define it had in mind. I do not think it necessary to attempt an exact definition of the expression as used in the statute other than to say that the words must be construed in accordance with the common understanding of them. That common understanding I take to mean the highest price an asset might reasonably be expected to bring if sold by the owner in the normal method applicable to the asset in question in the ordinary course of business in a market not exposed to any undue stresses and composed of willing buyers and sellers dealing at arm's length and under no compulsion to buy or sell. I would add that the foregoing understanding as I have expressed it in a general way includes what I conceive to be the essential element which is an open and unrestricted market in which the price is hammered out between willing and informed buyers and sellers on the anvil of supply and demand. These definitions are equally applicable to "fair market value" and "market value" and it is doubtful if the use of the word "fair" adds anything to the words "market value".

[31]     In his Appraisal Report, Mr. Dawson defines fair market value as being the highest price available in an open market between informed, prudent parties acting at arm's length and under no compulsion to act, expressed in terms of money or money's worth.

[32]     The appellant argued that here the highest price available in an open market is reflected by the asking prices for boats similar to his. In his view, an open market is not restricted to Canada: one has to look at the highest price asked for boats of similar quality, age and size anywhere in the world. Relying on his own research regarding prices asked for such boats in the U.K. (see Exhibit A-1, Tab 8) and the respondent's Analysis of Sailboat Values in Schedule A to the Reply, the appellant contended that the value of $40,700 determined by Mr. Roegiers is not out of line. This value is, in his view, all the more realistic since the Sabre 27 is a seagoing, Lloyd's certified boat. Such seaworthiness factors increase the value of a boat, as was seen with the 26-foot Contessa (1978), which is one of the boats listed by Mr. Dawson in his direct comparison analysis in his appraisal report (see Exhibit 5, page 9 of 14).

[33]     In Klotz v. The Queen, 2004 TCC 147, 2004 DTC 2236, Bowman A.C.J. pointed out in paragraph 52 that the Canadian authorities are clear that the best evidence of value is the actual sale of the very property. Bowman A.C.J. also stated the following in Klotz, at paragraphs 33, 49, 51 and 52:

[33] . . . To call no expert witnesses in a valuation case can be a risky manoeuvre. Nonetheless, the court is not bound to accept any expert's opinion and ultimately the court must make its own determination of value based on all of the evidence.

. . .

[49] . . . In determining fmv [fair market value] we are not directed to any particular market.

. . .

[51] Counsel also referred to Goldstein v. Commissioner, 89 T.C. 38, and to Chiu for the propositions that neither price lists nor a few isolated gallery sales establish fmv. These propositions seem to me to be rather self-evident and require no further authority.

[52] The United States and Canadian authorities are both clear that the best evidence of value is the actual sale of the very property.

[34]     Here, the appellant relied mostly on asking prices in the U.K. for boats similar to his (see Exhibit A-1, Tab 8) and in the U.S.A. (see Schedule A to the Reply). These are not the prices at which the boats were actually sold. As Bowman A.C.J. points out above, price lists (or asking prices) do not establish fair market value.

[35]     In Schedule A to the Reply, the respondent shows nine sales of boats. No explanation was given regarding those sales, as counsel for the respondent did not rely on them at the hearing in arguing his case. Nor did the appellant ask any questions concerning the figures provided, but he still wants to rely on them. Therefore, I can only presume that the selling prices indicated refer to boats comparable to the appellant's. It should be noted, however, that none of those boats was sold for more than US$20,000. The respondent used a conversion rate of $1.25, but the appellant has provided the conversion rate from the Bank of Canada for the fall of 1999 (see Exhibit A-1, Tab 11). It was approximately $1.48 at that time. If one applies that rate to the highest selling price indicated in the Analysis of Sailboat Values provided by the respondent in Schedule A to her Reply - US$20,000 for a Sabre 28 built in 1976 - the result is $29,600. This value is much closer to the value ($27,000) assigned to the boat by the respondent in the reassessment than that ($40,700) established by Mr. Roegiers for the appellant. In this context, it is not sufficient for the appellant to rely solely on the Analysis of Sailboat Values provided by the respondent in filing her Reply to the Notice of Appeal. The appellant is not an expert witness and is not in an ideal position to defend Mr. Roegiers's appraisal.

[36]     The respondent had an independent expert witness who is the author of the reference Book on boat values in the Canadian marine industry. Mr. Dawson said that he did not have to deal with sales in the U.K. In fact, he had never heard of sailboats being sold from Canada to U.K. The same is true of the appellant's broker, Mr. Blain, who, incidentally, according to the appellant's testimony, convinced him that he should not put his boat on sale for more than $27,000. As a matter of fact, the appellant did not get a single offer for his boat at that asking price. The appellant himself had paid $24,000, twelve years earlier, in 1987.

[37]     In my view, the method used by Mr. Dawson, although not perfect, is much more reliable than the appellant's as it is based on an average of actual selling prices. They are the real value obtained for comparable boats, as opposed to asking prices, which are what the appellant referred to. Furthermore, Mr. Dawson revised the initial value he had given and adjusted it to take into account certain factors that he was unaware of at the time of the appraisal. Still, he did not appraise the boat at more than $18,000.

[38]     The fact that Mr. Dawson did not see the boat is not, in my view, crucial. Indeed, he explained that in his business, there is no real need to see a boat as long as all the pertinent information is provided. Besides, it seems that Mr. Roegiers had used the same approach, as he apparently told Ms. Locas that he provided his evaluation based on information given to him over the phone. Mr. Roegiers was not at the hearing to confirm this. However, it is the appellant who should have called Mr. Roegiers to testify as to how he did arrive at the conclusion that the boat had a value of $40,700. The only evidence presented was a letter dated October 27, 1999, stating that the value of the boat was $40,700, without any explanation (Exhibit R-4), which is far from convincing.

[39]     In my view, there was ample evidence adduced by the respondent to allow me to conclude that the boat's value did not exceed $27,000. The appellant did not present sufficient reliable evidence to the contrary.

[40]     The appeal is therefore dismissed.

Signed at Ottawa, Canada, this 18th day of June 2004.

"Lucie Lamarre"

Lamarre, J.

CITATION:

2004TCC434

COURT FILE NO.:

2003-2480(IT)I

STYLE OF CAUSE:

Norman Carr v. Her Majesty the Queen

PLACE OF HEARING:

Ottawa, Ontario

DATE OF HEARING:

March 8, 2004

REASONS FOR JUDGMENT BY:

The Honourable Justice Lucie Lamarre

DATE OF JUDGMENT:

June 18, 2004

APPEARANCES:

For the Appellant:

The Appellant himself

Counsel for the Respondent:

Patrick Vézina

COUNSEL OF RECORD:

For the Appellant:

Name:

Firm:

For the Respondent:

Morris Rosenberg Deputy Attorney General of Canada Ottawa, Canada

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