Date: 20000914
Docket: A-40-99
| CORAM: DÉCARY J.A. |
MCDONALD, J.A.
MALONE, J.A.
BETWEEN:
HER MAJESTY THE QUEEN
Appellant
- and -
SUSSEX SQUARE APARTMENTS LTD.
Respondent
REASONS FOR JUDGMENT
DÉCARY, J.A.
[1] We have not been persuaded that Judge Bowman made any reviewable error in allowing the taxpayer's appeal from the assessments made by the Minister under the Income Tax Act. (The decision is reported at (1999) 99 D.T.C. 840).
[2] Even though his decision preceded that of the Supreme Court of Canada in Shell Canada Limited v. Canada [1999] 3 S.C.R. 622, the approach he adopted in the instant case squarely falls within the one described as follows by Madam Justice McLachlin at paragraph 39, page 641, of her reasons:
"This Court has repeatedly held that courts must be sensitive to the economic realities of a particular transaction, rather than being bound to what first appears to be its legal form: Bronfman Trust, supra, at pp. 52-53, per Dickson, C.J.; Tennant, supra, at para. 26, per Iacobucci, J. But there are at least two caveats to this rule. First, this Court has never held that the economic realities of a situation can be used to recharacterize a taxpayer's bona fide legal relationships. To the contrary, we have held that, absent a specific provision of the Act to the contrary or a finding that they are a sham, the taxpayer's legal relationships must be respected in tax cases. Recharacterization is only permissible if the label attached by the taxpayer to the particular transaction does not properly reflect its actual legal effect: Continental Bank Leasing Corp. v. Canada, [1998] 2 S.C.R. 298, at para. 21, per Bastarache, J.."
[3] In her factum, counsel for the appellant had raised an argument which, for all practical purpose, was an attempt to have the Court revisit the decision it had made in Dale v. Canada (C.A.), [1997] 3 F.C. 235 (F.C.A.). We are not prepared to revisit Dale and Counsel wisely did not insist on that argument at the hearing. Judge Bowman properly found at paragraph 40 of his reasons that "reading the order (of Mr. Justice Collver of the Supreme Court of British Columbia) and modification agreements together it is clear that the intent was that the documents called assignments be treated ab initio as subleases".
[4] The appeal will therefore be dismissed with costs.
(Sgd.) "Robert Décary"
J.A.
September 14, 2000
Vancouver, British Columbia
Date: 20000914
Docket: A-40-99
CORAM: Décary, J.A.,
McDonald, J.A.,
Malone, J.A.
BETWEEN:
HER MAJESTY THE QUEEN
Appellant
- and -
SUSSEX SQUARE APARTMENTS LTD.
Respondent
Heard at Vancouver, British Columbia on September 14, 2000
JUDGMENT delivered at Vancouver, British Columbia on September 14, 2000
| REASONS FOR JUDGMENT BY: DÉCARY, J.A. |
FEDERAL COURT OF APPEAL
NAMES OF COUNSEL AND SOLICITORS OF RECORD
| DOCKET: A-40-99 |
STYLE OF CAUSE: Her Majesty the Queen
v.
Sussex Square Apartments Ltd
PLACE OF HEARING: Vancouver, British Columbia
DATE OF HEARING: September 14, 2000
REASONS FOR JUDGMENT BY DÉCARY, J.A.
| CONCURRED IN BY: McDonald, J.A. and Malone, J.A. |
| DATED: September 14, 2000 |
APPEARANCES:
Mrs. Margaret E.T. Clare
| Mrs. Patricia Babcock For the Appellant |
Mr. Douglas H. Mathew
| mr. Thomas A. Bauer For the Respondent |
SOLICITORS OF RECORD:
Morris Rosenberg
Deputy Attorney
| General of Canada For the Appellant |
Thorsteinssons
Tax Lawyers
| Vancouver, BC For the Respondent |