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Date: 20030226
Docket: A-63-02
Neutral citation: 2003 FCA 106
CORAM: LÉTOURNEAU J.A.
BETWEEN:
MIMETIX PHARMACEUTICALS INC.
Appellant
and
HER MAJESTY THE QUEEN
Respondent
Heard at Ottawa, Ontario, February 26, 2003.
Judgment delivered from the Bench at Ottawa, Ontario, February 26, 2003.
REASONS FOR JUDGMENT BY: ROTHSTEIN J.A. Date: 20030226
Docket: A-63-02
Neutral citation: 2003 FCA 106
CORAM: LÉTOURNEAU J.A.
BETWEEN:
MIMETIX PHARMACEUTICALS INC.
Appellant
and
HER MAJESTY THE QUEEN
Respondent
REASONS FOR JUDGMENT (Delivered from the Bench at Ottawa, Ontario on February 26, 2003)
[1] Despite the argument of counsel for the appellant, we have not been persuaded that the Tax Court Judge made any error in respect of her determination that the appellant was not a Canadian-controlled private corporation. We have not been persuaded that she made any error of law or palpable or overriding error of fact or mixed law and fact or in the inferences drawn from the facts. [2] With respect to the investment tax credit claimed for the Collette mixer, according to the facts, the appellant is the first acquirer from the manufacturer. However, regulation 2902(b)(iii) excludes from qualified expenditures for investment tax credit purposes an expenditure for the acquisition of property that has been used before it was acquired by the taxpayer. Here, the taxpayer had leased the mixer for over one year before acquiring it. The lease was a bare lease - that is, it did not contain an option to purchase or any other provision that would enable it to be characterized as a purchase document. For the Court to do so, would constitute re-characterization of the lease transaction into a purchase transaction and we are unable to do that. See Shell Canada Ltd. v. Canada, [1999] 3 S.C.R.622 at paragraphs 39 and 40. Regrettably, the acquisition in this case is a prescribed expenditure that is excluded from being a qualified expenditure for investment tax credit purposes. [3] The appeal will be dismissed with costs. "Marshall Rothstein J.A. FEDERAL COURT OF APPEAL NAMES OF COUNSEL AND SOLICITORS OF RECORD DOCKET: A-63-02 STYLE OF CAUSE: Mimetix Pharmaceuticals Inc. v. Her Majesty the Queen
PLACE OF HEARING: Ottawa, Ontario DATE OF HEARING: February 26, 2003 REASONS FOR JUDGMENT OF THE COURT: (Létourneau, Rothstein & Malone JJ.A.) RENDERED FROM THE BENCH BY: Rothstein J.A. APPEARANCES: Mr. Eric Lay FOR THE APPELLANT Mr. Richard Gobeil and Ms. Jade Boucher FOR THE RESPONDENT SOLICITORS OF RECORD: Gowling Lafleur Henderson LLP Ottawa, Ontario FOR THE APPELLANT Mr. Morris Rosenberg Deputy Attorney General of Canada FOR THE RESPONDENT |
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