[OFFICIAL ENGLISH TRANSLATION]
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Docket: 2003-581(GST)I |
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BETWEEN: |
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JEAN-CLAUDE BISSONNET, |
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Appellant, |
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And |
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HER MAJESTY THE QUEEN, |
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Respondent. |
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Appeal heard on January 20, 2004, at Montreal, Quebec
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Before: The Honourable Justice Louise Lamarre Proulx |
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Appearances: |
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For the Appellant: |
the Appellant himself |
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Counsel for the Respondent: |
Bruno Bernier |
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JUDGMENT
The appeal from the assessment made under the Excise Tax Act, notice of which is numbered 012750025239G0001 and dated November 20, 2001, is allowed and the assessment is referred back to the Minister of National Revenue for reconsideration and reassessment, in accordance with the attached Reasons for Judgment.
Signed at Ottawa, Canada, this 20th day of April, 2004.
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"Louise Lamarre Proulx" |
Lamarre Proulx, J.
Certified true translation
Manon Boucher
[OFFICIAL ENGLISH TRANSLATION]
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Citation: 2004TCC310 |
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Date: 20040420 |
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Docket: 2003-581(GST)I |
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BETWEEN: |
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JEAN-CLAUDE BISSONNET, |
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Appellant, |
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and |
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HER MAJESTY THE QUEEN, |
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Respondent. |
REASONS FOR JUDGMENT
Lamarre Proulx, J.
[1] This is an appeal under the informal procedure concerning an assessment, notice of which is numbered 012750025239G0001 and dated November 20, 2001.
[2] The issue is whether the application for the new housing rebate in the amount set out in section 256 of the Excise Tax Act (the "Act") was filed within the time limit prescribed in subsection 256(3) of the Act.
[3] The rebate amount claimed is $1,241.59.
[4] Subsection 256(3) of the Act reads as follows:
Application for rebate. - A rebate under this section in respect of a residential complex shall not be paid to an individual unless the individual files an application for the rebate within two years after the earliest of
(a) the day that is two years after the day the complex is first occupied as described in subparagraph (2)(d)(i),
(a.1) the day ownership is transferred as described in subparagraph (2)(d)(ii); and
(b) the day construction or substantial renovation of the complex is substantially completed.
[5] Subparagraph 256(2)(d)(i) reads as follows:
256(2) Rebate for owner-built homes. - Where
...
(d) either
(i) the first individual to occupy the complex after the construction or substantial renovation is begun is the particular individual or a relation of the particular individual, or
...
the Minister shall, subject to subsection (3), pay a rebate to the particular individual ...
[6] In the case of an owner-built home, there are two relevant days for the calculation of the two-year time limit for filing an application for rebate. The first day is two years after the day the complex is first occupied and the second day is the day construction or substantial renovation of the complex is substantially completed. The application for rebate must be filed within two years after the earliest of those two days.
[7] The facts on which the Minister of National Revenue (the "Minister") relied to make the assessment are described in paragraph 10 of the Reply to Notice of Appeal amended as follows:
[translation]
(a) the facts admitted above;
(b) the Appellant is an individual who constructed a residential complex for use as his primary place of residence;
(c) that residential complex is a residential complex, that is, a "single unit residential complex" as defined in subsection 123(1) of the E.T.A.;
(d) on or around December 31, 1995, the construction of the residential complex was substantially completed;
(e) on or around September 10, 1999, the Appellant occupied the residential complex;
(f) on August 20, 2001, the Appellant filed a GST/HST New Housing Rebate Application with the Minister;
(g) the Appellant had until December 31, 1997, to file a GST/HST New Housing Rebate Application with the Minister;
(h) the Appellant is not entitled to the GST rebate claimed because the application was filed with the Minister out of time.
[8] The Appellant testified. He stated that the house, on the date of the hearing, was not yet substantially completed.
[9] In that regard, he filed a series of photos of his current house as well as cost estimates for the materials necessary for the completion of his house.
[10] The photos of the interior of the house were filed as Exhibit A-1, those of the exterior as Exhibit A-2 and the estimates as Exhibit A-3.
[11] Counsel for the Respondent then informed the Court that the photos of the current state of the house had not been shown to him in advance nor had the estimates for the work to be done.
[12] The Appellant stated that the flooring had not been laid down, the stairs were not finished and the doors had not been installed.
[13] As for the exterior, the aluminum cladding had not been installed and the soffit had not been installed.
[14] Photo A-4 shows that when the house was first occupied, the kitchen cupboards had not been installed. Those cupboards, according to an invoice included in Exhibit A-3, cost $4,600 plus taxes. A photocopy of a cheque for $5,291.15 is also included in that Exhibit. The bathroom cabinets were not installed either.
[15] The Appellant is a farmer. He lived in a mobile home on his land 15 feet in front of the new house. He began construction on his house in November 1992. He constructed the parts that he could on his own. His brother helped him on occasion.
[16] Marcelle Lemay Damien, a tax audit technician, testified. Her report and the invoices were filed as Exhibit I-2. The following is the conclusion drawn in her report:
[translation]
Based on the analysis the JVs, the house was completed in 1995. The facts submitted after 1995, namely, 96-97-98-99-01 are minimal and unimportant.
Application denied, out of time. Mr. Bissonnet disagrees and will appeal.
[17] The Court asked the Appellant to explain why the project had taken so long. He filed as Exhibit A-5 a handwritten document, dated February 15, 2002, that he attached to his notice of appeal. Without reproducing the facts described therein, I can say that from September 1993 to the spring of 2001, the Appellant experienced dramatic events and serious illnesses that explain the surprising duration of the work.
[18] When the family moved into the house, according to the Appellant, it was habitable but very far from being completed.
[19] Counsel for the Respondent referred to the following decisions of this Court: Tessier v. The Queen, 2001 GTC 105; Vallières v. The Queen, 2001 GTC 545; Pickering v. The Queen, 2001 GTC 463; and Meechan v. The Queen, 2000 GTC 712. I cite paragraphs 15 to 19 of the English version of Vallières, supra:
15 The term "substantially completed", as it appears in paragraph 256(3)(b) of the Act, is not specifically defined in the legislation.
16 The 90% threshold test is used by the CCRA as an administrative rule of thumb. However, this test is very imprecise and has consistently been criticized. There is a complete absence of criteria on which to base such an estimate. Ostensibly, the CCRA may consider "substantially complete" to mean something less than 90%. However, it is unlikely that a level of completion below 70% would amount to "substantial completion" as envisaged by the Act.
17 The 90% or more rules must always be qualified by the fact that the purchaser must be able to reasonably inhabit the premises. To a large extent, that can have a subjective component and one has to take into account the particular purchaser, but not to the point where objective standards can be disregarded.
18 To be "substantially completed" a residential complex must be capable of being used for the purpose for which it was constructed.
19 In determining what constitutes "substantial completion" there must be a certain common-sense assessment of what, on the facts of the particular case, a reasonable person would regard as substantial completion.
[20] It is my opinion that the Appellant's estimation that the house was not yet substantially completed is quite acceptable. According to the description of the state of the construction given by the Appellant, supported by recent photos and estimates, based on common sense, the house was not substantially completed. Although it is surprising that the construction took so long, the taxpayer has explained himself.
[21] Invoices can usually be indicative but this is not an absolute criterion. The state of the construction done on the house is paramount.
[22] The calculation of the two-year time limit must therefore commence as of two years after September 10, 1999, the day the Appellant occupied the residential complex. As the Appellant filed his application for rebate on August 20, 2001, he was within the prescribed time limit.
[23] Consequently, the appeal is allowed.
Signed at Ottawa, Canada, this 20th day of April, 2004.
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"Louise Lamarre Proulx" |
Lamarre Proulx, J.
Certified true translation
Manon Boucher
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CITATION: |
2004TCC310 |
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COURT FILE NO.: |
2003-581(GST)I |
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STYLE OF CAUSE: |
Jean-Claude Bissonnet and The Queen |
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PLACE OF HEARING: |
Montreal, Quebec |
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DATE OF HEARING: |
January 20, 2004 |
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REASONS FOR JUDGMENT BY: |
The Hon. Justice Louise Lamarre Proulx |
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DATE OF JUDGMENT: |
April 20, 2004 |
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APPEARANCES: |
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For the Appellant: |
the Appellant himself |
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For the Respondent: |
Bruno Bernier |
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COUNSEL OF RECORD: |
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For the Appellant: |
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Name: |
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Firm: |
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For the Respondent: |
Morris Rosenberg Deputy Attorney General of Canada Ottawa, Canada |