Date: 20020118
Dockets: 1999-3734-IT-G,1999-3738-IT-G,
1999-3739-IT-G, 1999-3740-IT-G
BETWEEN:
DOMENICA SCENNA,
FERNANDO NORCIA,
KERRY NORCIA,
RITA NORCIA,
Appellants,
and
HER MAJESTY THE QUEEN,
Respondent.
Reasonsfor Judgment
O'Connor, J.T.C.C.
[1] These appeals were heard together on common evidence at Toronto, Ontario on December 6, 2001. It was agreed at the outset that notwithstanding there are four appeals, there would be only one set of costs.
FACTS
[2] In January, 1991 Domenica Scenna, Fernando Norcia, Kerry Norcia and Rita Norcia in partnership (the "Partnership") purchased a property located at 2291 Fifth Line, Churchill, Ontario, (the "Property"). The Property was legally described as Part Lot 15, Concession 4, Township of Innisfil. It comprised 11 acres of land with an 8,000 square foot ranch style bungalow thereon with an indoor pool and a 5000 square foot workshop. The Property was on Highway 11 (Yonge Street). The price for the Property was $485,000 of which the Partnership financed $293,000 by way of a mortgage. The balance was put up as follows: $70,000 by Rita, $70,000 by Domenica and $70,000 collectively by Fernando and Kerry (these latter two later married), for a total of $210,000. The figures do not tally precisely because of closing costs and adjustments and some minor differences as to the amount of the mortgage. These discrepancies are immaterial.
[3] Kerry Norcia testified that the Partnership purchased the Property with the intention of a quick resale (within two years). Exhibit A-2 is a letter from Kerry Norcia to Academy Realty dated November 13, 1990, which reads as follows:
Academy Realty Nov 13/90
Armando:
- We're really looking for some land or house that will be a good investment. We want to be able to sell it within a two year span.
- As you know we're not looking for a house that we will live in as we aren't getting married until Oct 91 (we will call you when we want a house for ourselves).
We, Fernando & his sisters want to invest in something that we can turn over & make a profit.
- See what you can find.
Thanks.
Kerry
[4] The Appellants state further they looked at 6 or 7 properties over a one-year period before deciding on this Property which was listed at $620,000 and which, as mentioned, they bought for $485,000. Kerry Norcia stated further that before the purchase the Appellants spoke with real estate agents and town officials and received assurances that the Property could be rezoned from agricultural to commercial use which was key to being able to sell at a substantial profit. Kerry Norcia stated further that the partners' life savings went into the Property. She also stated the Partnership thought they could resell at a profit, albeit lower, even if the rezoning failed.
[5] The Property was first listed for sale by the Partnership on August 15, 1992 at $569,900 (Exhibit A-5) and then again on August 20, 1994 at $339,900 (Exhibit A-6). Kerry Norcia, indicated that there were other listings with approximately five brokers but the only two listings produced were Exhibits A-5 and A-6.
[6] Despite efforts of the Appellants, consisting of meetings with Town Planners, with the Deputy Mayor and with others, the Town essentially changed its mind and denied the zoning change. The Partnership did not make a formal application for the zoning change as that was too expensive and probably futile.
[7] To mitigate the Partnership's losses and defray carrying costs of the Property, the Partnership, realizing delays were anticipated to prepare the Property and attempt to have it rezoned, advertised extensively to rent it and when these efforts failed Kerry Norcia and Fernando Norcia occupied the Property as a residence and maintained same and paid rent to the Partnership. Kerry Norcia testified that the Property was certainly not her choice for a personal residence. It did not suit Kerry and Fernando. They knew very few people in the area and the commute to Toronto, where they worked, at times involved trips of approximately one and a half to three hours each way. They were there principally to maintain the Property. During their occupation from the spring of 1991 to the ultimate sale of the Property in 1996 they continued to try to sell or rent the Property to others using approximately five agents without success. They paid basic rent, utilities and part of the mortgage interest, a total of $3,000 to $3,500 per month.
[8] In 1994 the Partnership wrote down the Property to its then estimated fair market value of $300,000. The Partnership arrived at that figure as constituting a mean figure between what they were asking for the Property in that year namely $339,900 and what is referred to as the "low-ball" offer they received of $265,000.
[9] Based on the original price of $485,000 together with capitalized carrying costs, the write down of the Property to $300,000 resulted in a loss of $306,376, which was allocated to the Partners as follows:
Fernando Norcia - $ 76,594
Kerry Norcia - $ 51,603
Domenica Scenna - $ 76,593
Rita Norcia - $102,126
Although the loss was taken in 1994, all Parties carried portions of their respective losses to the 1991, 1992, 1993, 1994 and 1995 taxation years. The specific amounts in each year are set forth in the Replies to the Notices of Appeal. The discrepancies in the figures and the allocation of the loss were not explained, however, the Replies to the Notices of Appeal do not address that issue. They simply deny that the Appellants were entitled to any inventory write down or deductions of losses and they deny that the fair market value was $300,000.
[10] The Property sold finally in 1996 for $290,000. This was roughly the then balance of the mortgage with the result that the Appellants lost practically all the monies they personally put in to purchase the Property.
[11] At first the Appellants had attempted to deduct rental losses but after an audit the Minister disallowed this approach. The Appellants changed accountants and then filed on the basis of inventory write down and after a further audit this approach was denied as well.
SUBMISSIONS OF COUNSEL FOR THE APPELLANTS
[12] Counsel for the Appellants submits that although there was only one property involved, in his opinion, it constituted inventory and the Appellants were entitled to write down their losses in accordance with subsection 10(1) of the Income Tax Act ("Act") discussed below and that further, in accordance with paragraph 111(1)(a) of the Act, they were entitled to spread the losses over the various years as they did. He contends further that this case is similar to that of Friesen v. The Queen, a Supreme Court of Canada decision cited at 95 DTC 551 where there was only one vacant lot involved and where the Court held that that vacant lot could be considered as inventory and allowed the appropriate inventory write down. This decision is analzyed below.
[13] Counsel contends further that the Appellants' intention was to flip the Property and realize a profit but that was frustrated by a down turn in the market and the failure of the Town to rezone from agricultural to commercial, notwithstanding the Appellants' efforts to achieve that rezoning.
[14] Counsel contends further that the definition of "business" includes an adventure in the nature of trade and even a single adventure can qualify.
[15] Thus, there was a business, which suffered a loss when the inventory was written down, and the Appellants are entitled to treat the loss as they did.
[16] Counsel for the Appellants also submits that the Appellants had a reasonable expectation that they could have the Property rezoned. It had the features described above and there was commercial development on the concession immediately behind them. Further, within the month after purchase, the Property was advertised for rent and continued all through the period of time that it was owned by the Partnership, right until it was sold in 1996 to be advertised for rent or sale, including the time in which the home was occupied by Kerry Norcia and Fernando Norcia.
[17] In the Replies, the position is taken by the Respondent that this is personal-use Property. Counsel for the Appellants submits that none of the actions of the Appellants are consistent with personal-use property. If you buy a house for yourself it is not normal that before you buy it and after you buy it, you investigate rezoning the Property commercial and further it is not normal that while you're occupying it you continuously list it for rent and/or sale.
[18] Furthermore, the Property was not suitable as a personal residence, given the circumstances regarding Fernando Norcia and Kerry Norcia described above.
[19] Related to the issue of personal-use property is whether or not the Property was rented to Kerry Norcia and Fernando Norcia at fair market value.
[20] The evidence was that the Property was continuously advertised for rent, and that Kerry Norcia and Fernando Norcia paid an amount that no other party was willing to pay. They paid at first $850.00 a month, then $900.00 a month and later $950.00 a month, plus utilities, and that was more than anybody else was willing to pay. It is fair market, that is the definition of "fair market value", what an arm's length person is prepared to pay.
[21] Produced before the Court was the 1994 listing, because it was relevant to the issue of the fair market value of the Property in 1994. It was listed for $339,000, and the only offer received was $265,000.
[22] By definition, "fair market value" has to fall within those two numbers. The Property in fact was sold two years later for $290,000. Counsel submits that the Appellants have produced sufficient evidence to establish that the value of the Property in 1994 was $300,000 and there is no contrary evidence before the Court.
[23] The Appellants investigated property values in the area for a year before they purchased. For six months of that year, they worked with an agent. They did not do this as a frivolous or trivial matter. It was their life savings.
[24] They purchased the Property for several hundred thousand dollars less than its original list price. They investigated the rezoning potential before they bought the Property and arrived at a level of certainty that they could risk this adventure.
[25] When their attempts to rezone, or their expectations of rezoning, were frustrated, they listed the Property for sale within the two-year time window, consistent with their stated intention, and they listed it for $569,900. That was their expectation. That is what an agent listed it for. That's what they reasonably believed the Property was worth.
[26] What the Appellants did not anticipate was that rezoning would be frustrated and that a recession would continue to erode value. But where taxpayers make a bona fide genuine commercial investment, with a view to profit, what they lose is on account of income.
[27] The Minister has to have a compelling basis to deny losses that were incurred by taxpayers in a good faith commercial enterprise. The Property was sold for $290,000. The losses are real, they are not paper, they are not tax-driven.
[28] And if this Court finds that the intentions of the Appellants were to buy this Property as commercial property; that the Appellants that occupied the house paid fair market rent; and that the Appellants bought the Property with the intention of a future sale at a profit, then the Property is inventory.
[29] Counsel adds that the Respondent acknowledges that the Appellants entered into a Partnership, and in 5(c) of the Replies the Respondent acknowledges that the Partnership purchased the Property.
[30] At common law and in Ontario by statute, a "partnership" is a defined term. It has a very specific meaning. A "partnership" exists under the Partnership Act and also under the common law where two or more people carry on a business with a common view to profit. Without a business with a profit motive, there can be no partnership.
[31] Counsel adds that since the rent is fair market value, there is no personal benefit. The definition of "fair market value" is the price arrived at between an arm's length buyer and seller. Thus when there were no takers at the posted rent, and the Norcias, Kerry and Fernando, paid the posted rent, plus the utilities, they paid fair market value.
[32] Counsel for the Appellants admits that the Partnership could not make a profit from the rental of the Property but that is not the point. The Appellants bought with the intention of selling at a quick profit. Their intention was an adventure in the nature of trade, therefore a business was being carried on with the right and obligation to determine profit on the basis of inventory write down.
SUBMISSIONS OF COUNSEL FOR THE RESPONDENT
[33] Counsel for the Respondent submits that the Property was used as a principal residence by two of the four Partners. These two paid rent but the rent did not represent fair market value. The Partnership could never make a profit from the rental of the Property as it was never properly capitalized. The Property was used for personal purposes.
[34] The Partnership was not in the business of real estate. The Property was not inventory to the Partnership. The Partnership never actually applied for a rezoning to build a commercial property and that for all of those reasons the Appellants could not declare a loss and allocate it as they did pursuant to paragraph 111(1)(a) of the Act. He submits also that the Property was not inventory as defined in subsection 248(1) of the Act and therefore the Appellants are not entitled to the deductions they seek because subsection 10(1) of the Act and section 1801 of the Income Tax Regulations do not apply. Counsel concludes that there was no non-capital loss as defined in subsection 111(8) of the Act for the Appellants' 1994 taxation year that was deductible in computing taxable income for the 1991, 1992, 1993, 1994 and 1995 taxation years and that the Minister properly denied the deductions claimed by the Appellants in all of those years.
[35] The Friesen case is, of course, probably the seminal case now on the whole issue of, can a single piece of property that may or may not be an adventure in the nature of trade be treated as property that is subject to an inventory write down.
[36] Counsel for the Respondent attempted to distinguish the majority judgment of the Supreme Court of Canada in Friesen as follows. The central question in these appeals is whether the Appellants are entitled to take advantage of the inventory valuation method in subsection 10(1) of the Act. This involves a careful examination of the wording of the provisions of the Act and a consideration of the proper interpretation of these sections in light of the basic structure of the Canadian taxation scheme established in the Act.
[37] The plain reading of this section is that it is a mandatory provision requiring a taxpayer who computes income from a business to value the inventory at the lower cost or market value or as permitted by regulation. Thus, prima face, the taxpayer must meet two requirements in order to use this section: the venture at issue must be a 'business and the property in question must be 'inventory.'
[38] Counsel for the Respondent submits there was no adventure in the nature of trade nor any business.
[39] Counsel submits that IT-218R, which replaced IT-218 and was discussed in Friesen, lists a number of factors, which have been used by the courts to determine whether a transaction involving real estate is an adventure in the nature of trade creating business income or a capital transaction involving the sale of an investment. Four of these factors are discussed below.
1. The taxpayer's intention with respect to the real estate at the time of purchase and the feasibility of that intention and the extent to which it is carried out. An intention to sell the property for a profit will make it more likely to be characterized as an adventure in the nature of trade.
Now, what are the taxpayers' intentions? We know in this case the intention was to buy a property and sell it. We know that. Now the question is, was that the thought at the time of purchase? Yes, it was.
The next thing, the feasibility of that intention: and that is where the Appellants' position begins to break down and is clearly different from this factor, because there was no feasibility to their plan.
They had no real estate experience. They did not live in the area. They looked at only five properties. They said that they were going to flip the Property within two years, but the first listing was 18 months after purchase.
The evidence, in terms of seeking to have the Property rezoned, is that they spoke to a couple of people. No one was ever retained professionally to assist them with that. Nothing was done in an official capacity by way of submission, and nothing has been adduced in evidence to show that in fact an application was ever made.
So to the extent that their plan was carried out, I would submit to you it was not carried out, because there is nothing there that really shows - the evidence, I would submit is overwhelming to show that their efforts were minimal at best, and misdirected at worse.
2. The nature of the business, profession, calling or trade of the taxpayer and associates. The more closely a taxpayer's business or occupation is related to the real estate transactions, the more likely it is that the income will be considered business income rather than a capital gain. The Appellants were not in the real estate business.
3. The nature of the property and the use made of it. We know that this was not like in Friesen. This was not vacant land. We know it was agriculturally zoned land. It was not commercially zoned land. That is what they needed to get, in order for it to be of value to a potential purchaser, which they didn't get. We also know that the taxpayers made use of it as a personal residence.
4. The extent to which borrowed money was used to finance the transaction and the length of time that the real estate was held by the taxpayer. Transactions involving borrowed money and rapid resale are more likely to be adventures in the nature of trade. This was not a highly leveraged property. They had put down their life savings. In fact, we heard that they extended themselves. They put down $210,000 on a property that cost $485,000.
[40] Counsel points out that the partners involved in the venture in Friesen were experienced business people who treated the transaction as a business venture. The land involved was undeveloped real estate, which was suitable for resale but unsuitable as an income producing investment or for personal enjoyment.
[41] This Property, unlike Friesen, was suitable for residing in.
[42] The Property does not meet the factors the Supreme Court of Canada as outlined in Friesen, factors set forth in the Interpretation Bulletins referred to in its judgment.
[43] In summary Counsel for the Respondent submits that the facts in these Appeals are sufficiently different from those in Friesen, that the majority judgment of the Supreme Court of Canada in Friesen is not applicable.
ANALYSIS AND DECISION
[44] The relevant provisions of the Act in 1994 read as follows:
9. (1) Subject to this Part, a taxpayer's income for a taxation year from a business or property is the taxpayer's profit from that business or property for the year.
(2) Subject to section 31, a taxpayer's loss for a taxation year from a business or property is the amount of the taxpayer's loss, if any, for the taxation year from that source computed by applying the provisions of this Act respecting computation of income from that source with such modifications as the circumstances require.
...
10. (1) For the purpose of computing income from a business, inventory shall be valued at its costs to the taxpayer or its fair market value, whichever is lower, or in such other manner as may be permitted by regulation.
...
(2) Notwithstanding subsection (1), for the purpose of computing income for a taxation year from a business, the inventory at the commencement of the year shall be valued at the same amount as the amount at which it was valued at the end of the preceding taxation year for the purpose of computing income for that preceding year.
...
248. (1) In this Act, ...
"business" includes a profession, calling, trade, manufacture or undertaking of any kind whatever and, except for the purposes of paragraph 18(2)(c), section 54.2 and paragraph 110.6(14)(f), an adventure or concern in the nature of trade but does not include an office or employment;
...
"inventory" means a description of property the cost or value of which is relevant in computing a taxpayer's income from a business for a taxation year ...
[45] Although the Appellants were not experienced real estate investors, they did invest their life savings and must have had reasonable grounds for doing so. They had examined approximately six or seven other properties and concluded that this Property had the most likely profit potential if the zoning change from agricultural to commercial could have been effected. The early indications were that it could be done but this position on the part of the Town changed. There are commercially zoned areas close to the Property and I believe the Appellants had a reasonable expectation that the zoning change could be obtained. If so, all indications were that a quick profit could be obtained. Thus, in my view, the adventure that they undertook was an adventure in the nature of trade and as such a business was being carried on and the Appellants are entitled to the inventory write down provided for in subsection 10(1). As well, they have the ability to carry the resulting loss back and forward to other years in the manner that they have done.
[46] I find the facts in this case to be sufficiently similar to those in Friesen, and hold that that decision governs the disposition of these appeals.
[47] I cite the following from the majority decision of the Supreme Court of Canada in Friesen:
... the appellant was a participant in an adventure in the nature of trade involving a piece of Calgary real estate known as the Styles Property. The Styles Property was acquired for the sole purpose of reselling it at a profit. ... Contrary to the expectations of the investors, real estate prices fell instead of rising.
...
II. Analysis
A. Introduction
The narrow issue in this appeal is whether land held for resale as an adventure in the nature of trade may be valued as inventory under s. 10(1) of the Income Tax Act. ... In my opinion the provisions of the Income Tax Act allow land held as an adventure in the nature of trade to be valued as inventory under s. 10(1) and therefore I would allow this appeal.
B. The Scheme of the Income Tax Act
...
Section 3 of the Income Tax Act sets out the ground rules for the computation of a taxpayer's income for a taxation year. Section 3 recognizes two basic categories of income: "ordinary income" from office, employment, business and property, all of which are included in s. 3(a), and income from a capital source, or capital gains which are covered by s. 3(b). The whole structure of the Income Tax Act reflects the basic distinction recognized in the Canadian tax system between income and capital gain.
Subdivision b of Division B of the Act entitled "Income or Loss from a Business or Property" contains all the rules which govern business and property income. The leading section in this subdivision is s. 9 which provides that a taxpayer is taxable on the profit for a business or property for the year. Profit is not defined in the Income Tax Act.
...
D. Plain Meaning of Section 10
...
The plain reading of this section is that it is a mandatory provision requiring a taxpayer who computes income from a business to value the inventory at the lower of cost or market value or as permitted by regulation. Thus, prima facie, the taxpayer must meet two requirements in order to use this section: the venture at issue must be a "business" and the property in question must be "inventory".
(1) Is the Appellant's Venture a Business?
The definition of "business" in s. 248(1) specifically includes an adventure in the nature of trade. ...
An adventure in the nature of trade is not defined in the Act but is a term which has a meaning established by the common law.
Both parties in this appeal accept that the appellant's real estate venture constitutes an adventure in the nature of trade. Nevertheless, it is useful to briefly examine the requirements for an adventure in the nature of trade since these requirements serve to limit the scope of ventures which are eligible to use the provisions of s. 10(1).
The concept of an adventure in the nature of trade is a judicial creation designed to determine which purchase and sale transactions are of a business nature and which are of a capital nature. ...
...
The first requirement for an adventure in the nature of trade is that it involve[s] a "scheme for profit-making". The taxpayer must have a legitimate intention of gaining a profit from the transaction. Other requirements are conveniently summarized in Interpretation Bulletin IT-459 "Adventure or Concern in the Nature of Trade" (September 8, 1980) which references Interpretation Bulletin IT-218 "Profit from the Sale of Real Estate" (May 26, 1975) for a summary of the relevant factors when the property involved is real estate.
IT-218R, which replaced IT-218 in 1986, lists a number of factors which have been used by the courts to determine whether a transaction involving real estate is an adventure in the nature of trade creating business income or a capital transaction involving the sale of an investment.
...
... I affirm the succinct summary of the law contained in IT-218R:
The word "business" is defined in subsection 248(1) so as to include, inter alia, an adventure or concern in the nature of trade. This definition can cause an isolated transaction involving real estate to be considered a business transaction. As a business, any gain or loss which arises therefrom is, by virtue of section 9, required to be included in computing income or loss, as the case may be.
(2) Is the Styles Property "Inventory"?
In order to take advantage of the valuation method in s. 10(1), a taxpayer must also establish that the property in question is inventory. A definition of "inventory" is contained in s. 248(1) of the Act:
"inventory" means a description of property the cost or value of which is relevant in computing a taxpayer's income from a business for a taxation year;
The first point to note about this definition of inventory is that property is not required to contribute directly to income in a taxation year in order to qualify as inventory. Provided that the cost or value of an item of property is relevant in computing business income in a year that property will qualify as inventory. Generally the cost or value of an item of property will appear as an expense (and the sale price as revenue) in the computation of income.
Reduced to its simplest terms, the income or profit from the sale of a single item of inventory by a sales business is the ordinary tracing formula calculated by subtracting the purchase cost of the item from the proceeds of sale. This is the basic formula which applies to the calculation of profit before the value of inventory is taken into account, as is made clear by Abbott, J. in Minister of National Revenue v. Irwin, [1964] S.C.R. 662, at pp. 664-65:
The law is clear therefore that for income tax purposes gross profit, in the case of a business which consists of acquiring property and reselling it, is the excess of sale price over cost, subject only to any modification effected by the "cost or market, whichever is lower" rule.
...
IT-218R clarifies that real estate which is held by the taxpayer as capital property may be used as personal-use property or as an investment for the purpose of gaining or producing income. The sale of this kind of property creates capital gain or capital loss. On the other hand, real estate which is purchased for profitable resale value is inventory which creates business income or loss. In determining whether the gains from a sale of real estate are income or capital, particular emphasis is placed on the taxpayer's intention at the time of the initial purchase of the real estate. Thus, a particular piece of real estate becomes either inventory or capital property in the hands of the taxpayer from the time of the original purchase.
...
... I prefer to follow the well-established line of cases which have specifically held as part of their rationes decidendi that real estate held for resale in an adventure in the nature of trade constitutes "inventory" for the purposes of s. 10(1) ...
...
Section 10(1) of the Income Tax Act recognizes the well accepted commercial and accounting principle of requiring a business to value its inventory at the lower of cost or market value. This principle is an exception to the general principle that neither profits nor losses are recognized until realized. As well, it represents a departure from the general principle that assets are valued at their historical cost. The underlying rationale for this specific exception to the general principles is usually explained as originating in the principle of conservatism. The generally accepted accounting principle applicable in this situation is explained by D.E. Kieso et al., Intermediate Accounting (2nd ed. 1986), at pp. 421-22, as follows:
A major departure from adherence to the historical cost principle is made in the area of inventory valuation. Applying the constraint of conservatism in accounting means recognizing known losses in the period of occurrence. In contrast, known gains are not recognized until realized. If the inventory declines in value below its original cost for whatever reason ..., the inventory should be written down to reflect this loss. The general rule is that the historical cost principle is abandoned when the future utility (revenue-producing ability) of the asset is no longer as great as its original cost. A departure from cost is justified on the basis that a loss of utility should be reflected as a charge against the revenues in the period in which the loss occurs. Inventories are valued, therefore, on the basis of the lower of cost and market instead of on an original cost basis.
[Emphasis added.]
...
In summary, I conclude that the valuation method in s. 10(1) is available for inventory held as part of an adventure in the nature of trade. The valuation method becomes relevant in any particular taxation year through the calculation of business income. Business income is calculated according to well-accepted commercial and accounting principles. According to these principles the value of inventory is relevant to the computation of income in years prior to sale since it comprises part of the cost of sale. According to the same principles inventory is to be valued at the lower of cost or market value, a specific exception to the general principle of realization. This exception is well accepted in the specific instance relevant to this appeal: the valuation of real estate inventory. ...
[48] There are certain differences in the fact situations in Friesen and in these appeals. Notably in Friesen the parties agreed that there existed an adventure in the nature of trade. However the Supreme Court of Canada did not simply rely on that agreement but went on at length to analyze when an adventure in the nature of trade exists. One of the main factors in the determination is the intention of the parties at the time of purchase. If that intention is to sell relatively quickly this points strongly to an adventure. That was the intention in these appeals. Moreover I accept the submissions of Counsel for the Appellants on the other differences in the two cases relative to two of the partners occupying the Property, the lack of real estate experience and the level of financing for the Property. These factors are not, in my opinion, when considered in the light of the submissions of Counsel for the Appellants, sufficient to hold that the Friesen decision should not apply.
[49] Toward the end of this hearing there were references to certain pending cases in the Supreme Court of Canada on the concept of reasonable expectation of profit. On further reflection, I do not believe that that concept is important in the disposal of these appeals. Consequently I do not feel it necessary to await for the Supreme Court of Canada to render its judgments.
[50] Consequently, the appeals are allowed. The Appellants are awarded one set of costs.
Signed at Ottawa, Canada, this 18th day of January, 2002.
"T. O'Connor"
J.T.C.C.
COURT FILE NO.: 1999-3734(IT)G, 1999-3738(IT)G,
1999-3739(IT)G, 1999-3740(IT)G
STYLE OF CAUSE: Domenica Scenna, Fernando Norcia,
Kerry Norcia and Rita Norcia v. The Queen
PLACE OF HEARING: Toronto, Ontario
DATE OF HEARING: December 6, 2001
REASONS FOR JUDGMENT BY: The Honourable Judge Terrence O'Connor
DATE OF JUDGMENT: January 18, 2002
APPEARANCES:
Counsel for the Appellant: Paul E. Hawa
Counsel for the Respondent: David W. Chodikoff
COUNSEL OF RECORD:
For the Appellant:
Name: Paul E. Hawa
Firm: Berkshire Group
For the Respondent: Morris Rosenberg
Deputy Attorney General of Canada
Ottawa, Canada
1999-3734(IT)G
BETWEEN:
DOMENICA SCENNA,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Appeals heard on common evidence with the appeals of
Fernando Norcia v. Her Majesty the Queen (1999-3738(IT)G),
Kerry Norcia v. Her Majesty the Queen (1999-3739(IT)G) and
Rita Norcia v. Her Majesty the Queen (1999-3740(IT)G) at Toronto, Ontario,
on December 6, 2001, by the Honourable Judge Terrence O'Connor
Appearances
Counsel for the Appellant: Paul E. Hawa
Counsel for the Respondent: David W. Chodikoff
JUDGMENT
The appeals from the reassessments made under the Income Tax Act for the 1991, 1992, 1993, 1994 and 1995 taxation years are allowed, and the matter is referred back to the Minister of National Revenue for reconsideration and reassessment in accordance with the attached Reasons for Judgment.
The Appellants are awarded one set of costs for these four appeals.
Signed at Ottawa, Canada, this 18th day of January, 2002.
|
"T. O'Connor" |
J.T.C.C.
1999-3738(IT)G
BETWEEN:
FERNANDO NORCIA,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Appeals heard on common evidence with the appeals of
Domenica Scenna v. Her Majesty the Queen (1999-3734(IT)G),
Kerry Norcia v. Her Majesty the Queen (1999-3739(IT)G) and
Rita Norcia v. Her Majesty the Queen (1999-3740(IT)G) at Toronto, Ontario,
on December 6, 2001, by the Honourable Judge Terrence O'Connor
Appearances
Counsel for the Appellant: Paul E. Hawa
Counsel for the Respondent: David W. Chodikoff
JUDGMENT
The appeals from the reassessments made under the Income Tax Act for the 1991, 1992, 1993, 1994 and 1995 taxation years are allowed, and the matter is referred back to the Minister of National Revenue for reconsideration and reassessment in accordance with the attached Reasons for Judgment.
The Appellants are awarded one set of costs for these four appeals.
Signed at Ottawa, Canada, this 18th day of January, 2002.
|
"T. O'Connor" |
J.T.C.C.
1999-3739(IT)G
BETWEEN:
KERRY NORCIA,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Appeals heard on common evidence with the appeals of
Fernando Norcia v. Her Majesty the Queen (1999-3738(IT)G),
Domenica Scenna v. Her Majesty the Queen (1999-3734(IT)G) and
Rita Norcia v. Her Majesty the Queen (1999-3740(IT)G) at Toronto, Ontario,
on December 6, 2001, by the Honourable Judge Terrence O'Connor
Appearances
Counsel for the Appellant: Paul E. Hawa
Counsel for the Respondent: David W. Chodikoff
JUDGMENT
The appeals from the reassessments made under the Income Tax Act for the 1991, 1992, 1993, 1994 and 1995 taxation years are allowed, and the matter is referred back to the Minister of National Revenue for reconsideration and reassessment in accordance with the attached Reasons for Judgment.
The Appellants are awarded one set of costs for these four appeals.
Signed at Ottawa, Canada, this 18th day of January, 2002.
|
"T. O'Connor" |
J.T.C.C.
1999-3740(IT)G
BETWEEN:
RITA NORCIA,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Appeals heard on common evidence with the appeals of
Fernando Norcia v. Her Majesty the Queen (1999-3738(IT)G),
Kerry Norcia v. Her Majesty the Queen (1999-3739(IT)G) and
Domenica Scenna v. Her Majesty the Queen (1999-3734(IT)G) at Toronto, Ontario,
on December 6, 2001, by the Honourable Judge Terrence O'Connor
Appearances
Counsel for the Appellant: Paul E. Hawa
Counsel for the Respondent: David W. Chodikoff
JUDGMENT
The appeals from the reassessments made under the Income Tax Act for the 1991, 1992, 1993, 1994 and 1995 taxation years are allowed, and the matter is referred back to the Minister of National Revenue for reconsideration and reassessment in accordance with the attached Reasons for Judgment.
The Appellants are awarded one set of costs for these four appeals.
Signed at Ottawa, Canada, this 18th day of January, 2002.
|
"T. O'Connor" |
J.T.C.C.