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Date: 20030408
Docket: A-218-02
Neutral citation: 2003 FCA 185
CORAM: DÉCARY J.A.
BETWEEN:
MURRAY G. JOHNSTON
Applicant
and
HER MAJESTY THE QUEEN, represented by THE ATTORNEY GENERAL OF CANADA,
Respondent
Heard at Winnipeg, Manitoba, on April 8, 2003.
Judgment delivered from the Bench at Winnipeg, Manitoba, on April 8, 2003.
REASONS FOR JUDGMENT OF THE COURT BY: SHARLOW J.A.
Date: 20030408
Docket: A-218-02
Neutral Citation: 2003 FCA 185
CORAM: DÉCARY J.A.
BETWEEN:
MURRAY G. JOHNSTON Applicant - and -
HER MAJESTY THE QUEEN represented by THE ATTORNEY GENERAL OF CANADA Respondent
(Delivered from the Bench at Winnipeg, Manitoba on April 8, 2003)
[1] This is an application for judicial review of a decision of the Tax Court under the informal procedure, reported as Johnston v. Canada, [2002] 2 C.T.C. 2586 (T.C.C.). The issue is whether interest expenses of $3,675.00 incurred by the applicant in 1999 come within the definition of "moving expenses" in subsection 62(3) of the Income Tax Act, R.S.C. 1985, c. 1 (5th supp.).
[2] In August, 1999, the applicant moved from Toronto to Winnipeg, where he earned income from employment. At that time he owned a mortgage free home in Toronto. He bought a new home in Winnipeg in September, 1999, using the proceeds of two bank loans secured by the Toronto home. The Toronto home was sold in November, 1999 and the proceeds of sale were used to repay the two bank loans. The interest expense that is the subject of this application accrued between September and November, 1999.
[3] The relevant parts of the definition of "moving expenses" read as follows in 1999 (emphasis added):
[4] The applicant argues that the interest comes within paragraph 62(3)(g) of the definition of "moving expenses" because it is "in respect of" his Toronto home. By this he means that the loans represent the equity in his Toronto home that he accessed to finance his purchase of the Winnipeg home.
[5] The Crown argued in the Tax Court that the interest was incurred in respect of the acquisition of the applicant's Winnipeg home, and for that reason it is excluded from the definition of "moving expenses" by the closing words of subsection 62(3). The Tax Court Judge adopted the Crown's interpretation, and in our view he was correct to do so.
[6] The definition of "moving expenses", read in its entirety, indicates that interest on money borrowed to purchase a home in the new work location is not within the definition, even if the loan is secured by a mortgage on a home in the former work location. There was ample evidence before the Tax Court Judge to support his conclusion that the applicant used the borrowed money to purchase a home in Winnipeg. That precludes the applicant from claiming interest on the borrowed money as a moving expense.
[7] This application for judicial review will be dismissed.
"Karen R. Sharlow" Judge FEDERAL COURT OF CANADA APPEAL DIVISION NAMES OF SOLICITORS AND SOLICITORS ON THE RECORD
DOCKET: A-218-02
STYLE OF CAUSE: Murray G. Johnston v. Queen (AGC)
PLACE OF HEARING: Winnipeg, Manitoba
DATE OF HEARING: April 8, 2003
REASONS FOR JUDGMENT OF
THE HONOURABLE MADAM JUSTICE SHARLOW
DATED APRIL 8, 2003
APPEARANCES:
Mr. Murray G. Johnston on his own behalf
Ms. Angela Evans for the Respondent Department of Justice 301 - 310 Broadway Winnipeg, MB R3C 0S6
SOLICITORS OF RECORD:
Mr. Murray G. Johnston on his own behalf
Morris Rosenberg Deputy Attorney General of Canada for the Respondent |
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