CITATION: Yavari v. Ontario (Minister of Finance), 2024 ONSC 5296

DIVISIONAL COURT FILE NO.: 705/23

DATE: 20240927

ONTARIO SUPERIOR COURT OF JUSTICE DIVISIONAL COURT

Before: Backhouse, D.L. Corbett and Stothart JJ.

BETWEEN:

NASRIN YAVARI Applicant

– and –

MINISTER OF FINANCE Respondent

Counsel: Raphael Rutman and Mattheus Lawford, for the Applicant Jessica Fiore and Kirsten Yee, for the Respondent

HEARD at Toronto: September 16, 2024

Backhouse J.

REASONS FOR DECISION

Overview

[1] The applicant seeks judicial review of a decision of the Minister of Finance of Ontario (“the Minister”) under section 20 of the Land Transfer Tax Act, R.S.O. 1990, c. L.6 (“LTTA”) to deny the applicant relief from payment of the Non-Resident Speculation Tax (“NRST”). Section 20 gives the Minister discretion if, due to special circumstances it is deemed inequitable to demand payment of the whole amount. The applicant claimed relief on the basis that due to delays caused by the COVID-19 pandemic, she missed the statutory deadline for obtaining permanent residence by 10 days, but for which she would have been entitled to a rebate of the entire NRST that she paid of $510,000.

[2] The applicant submits that the decision was unreasonable, that it was procedurally unfair, and that the Minister’s discretion to grant relief was improperly fettered. The applicant seeks an order quashing the decision of the Minister to deny her relief under s. 20 of the LTTA and an order in the nature of mandamus that the Minister exercise their power under the LTTA to grant her tax relief.

[3] The applicant provided documents that showed that her language testing appointment and her medical test required to obtain permanent residency were delayed by approximately 5 months and 2 months respectively. She was not a land speculator and lived in the property as her principal residence from the time of its purchase to the date of application.

[4] The Minister reasoned that the applicant took on the risk when she bought the property in 2017 and her circumstances were not special because they were not unlike those experienced by other NRST taxpayers. The Minister took into account that there were administrative concessions that extended certain requirements for a NRST rebate due to COVID-19 but they did not apply to the applicant’s situation.

[5] For the reasons set out below, I would find the decision unreasonable and I would quash the Minister’s decision. In summary, not to consider the Pandemic as special circumstances explaining a 10-day delay is a failure to engage with s. 20. By concluding that the effect of the delays in her language and medical testing was that she “waited longer than she anticipated to obtain permanent resident status” the decision ignored the special circumstances central to the applicant’s request for relief, namely the cause of the delays due to COVID-19.

[6] For the reasons set out below, I would find that this is not an appropriate case for mandamus: the Minister failed to conduct a proper analysis and is entitled to exercise their discretion on the basis of a proper review of the applicant’s claim. Therefore, the applicant’s request for relief under s. 20 shall be remitted to the Minister to conduct a fresh review in accordance with these reasons.

Background

[7] The applicant purchased a home in Toronto in 2017 when she was a visitor in Canada and paid NRST at the rate of 15 per cent of the purchase price under s. 2(2.1) of the LTTA in the amount of $510,000. The applicant lived in the home, after its purchase, went to school in Ontario, obtained 2 certificates from George Brown College and then obtained employment. Upon obtaining a work permit, she became eligible to begin the process to obtain permanent resident status in Canada.

[8] O. Reg.182/17 sets out certain conditions under which taxpayers who paid NRST may have it rebated. The conditions under s. 5 include the requirement that the foreign national taxpayer be the only transferee named in the conveyance (other than a spouse), have occupied the home as principal residence from within 60 days of the purchase to the date of application, become a permanent resident of Canada within four years after the property was purchased and applied for the rebate before the 181st day after becoming a permanent resident.

[9] The applicant was granted permanent resident status in Canada on September 3, 2021, being 4 years and 10 days after the purchase of the property. On December 8, 2021 the applicant applied for a rebate under s. 5 of the LTTA. The applicant submitted that the COVID-19 pandemic impacted the federal government’s processing of permanent resident applications. The language testing appointment and medical test required for the applicant to obtain permanent residency were delayed by 5 months and 2 months respectively due to the COVID-19 pandemic.

[10] The Minister disallowed the application on May 3, 2022 on the basis that the applicant had not satisfied the statutory requirement of becoming a permanent resident of Canada within four years after the day the property was purchased. But for the 10 days beyond the four year requirement, she met the other requirements of s. 5 to qualify for the rebate.

[11] The applicant submitted a notice of objection under s. 13 of the LTTA on October 21, 2022. The Minister confirmed the statement of disallowance on February 23, 2023. The applicant did not file an appeal from the notice of objection.

[12] The applicant then applied for relief under s. 20 of the LTTA where the Minister has the discretion to accept such amount as he or she deems proper if, owing to special circumstances, it is deemed inequitable to demand payment of the whole amount imposed by the LTTA. The Minister sought further information from the applicant which the applicant provided. On November 10, 2023, the Minister sent a letter disallowing the application, giving the following reasons:

The main purpose of section 20 is to provide some administrative flexibility for granting relief in cases where, owing to special circumstances, the requirement to pay the full statutory amount would be demonstrably inequitable.

Relief pursuant to section 20 is rarely granted, and where it is granted, the circumstances are truly exceptional.

Your response has been carefully reviewed, and while the circumstances described in your correspondence are regrettable, your request for relief has been denied.

The Information Note

[13] The applicant’s tax file included an Information Note prepared in the course of considering the applicant’s s. 20 claim which the Minister relies on in addition to the November 10, 2023 letter as support for its decision. The recommendation was to deny the applicant’s request for relief. The Discussion and Analysis in the Information Note state:

Discussion/ Analysis

Key Factors

• Nasrin Yavari came to Canada from Iran in 2017 as a visitor. On August 24, 2017, she purchased the Home for a purchase price of $3,340,000. At that time, Nasrin Yavari was a foreign national, and paid NRST in the amount of $510,000.
• On September 4, 2018, she obtained a Canadian study permit and commenced studies at George Brown College. Nasrin Yavari was an international student from September 2018 to April 2020 and studied at and graduated from George Brown College with a certificate of General Arts and Science - English for Academic purposes on June 28, 2019, and a certificate of Art and Design Foundation (with honours) on April 17, 2020.
• On October 28, 2020, she obtained a Canadian work permit. Nasrin Yavari has been employed by Cyrux Smart Solutions Inc. since June 3, 2020.
• Nasrin Yavari's representative has indicated that she was not eligible to begin the process to obtain permanent resident status until October 28, 2020, which is when she received her Canadian work permit.
• Upon becoming eligible to begin the process to obtain permanent resident status, Nasrin Yavari promptly hired an immigration lawyer to assist her. Under the temporary resident to permanent resident pathway, both medical and language exams are required aspects including for those who graduated from Canadian institutions. Nasrin Yavari's representative has indicated that the COVID-19 pandemic impacted the federal government's processing of applications along with the availability of mandatory language testing and medical examinations.
• Nasrin Yavari's representative has supplied documentation to demonstrate that her language testing appointment was delayed by the federal government by approximately 5 months, and her medical test was delayed approximately 2 months. As a result, her application for permanent resident status could not be filed until July 15, 2021. This meant that Nasrin Yavari waited longer than she anticipated to obtain permanent resident status.
• On September 3, 2021 , being 4 years and 10 days after the closing date of the Home, Nasrin Yavari obtained permanent resident status in Canada. Based on documentation and information provided by Nasrin Yavari's representative, it appears she would have qualified for the NRST rebate for persons who become permanent residents but for her failure to become a permanent resident within 4 years of the closing date of the Home.
• Prior to asking for relief under section 20 of the LTTA, Nasrin Yavari applied for the worker rebate in June 2021, which was disallowed on the basis that she had not worked full time under a valid work permit for a continuous period of at least one year since the date of purchase. Nasrin Yavari filed a Notice of Objection to the disallowance of her worker rebate. The disallowance was confirmed and then she requested relief under section 20.
• Had Nasrin Yavari applied for the student rebate of the NRST it would have been disallowed as well as she did not become a student until more than a year after the date of purchase.
• Nasrin Yavari has formally requested relief under section 20 of the LTTA arguing that her Canadian permanent resident application was delayed through no fault of her own due to the global pandemic, that she has since become a permanent resident, and that refusing to return the tax paid would be unjust.

Analysis

• The main purpose of section 20 of the LTTA is to provide some administrative flexibility for granting relief in cases where there is any doubt or dispute as to the liability to pay the tax or any portion of it, or, if owing to special circumstances, the requirement to pay the full statutory amount would be demonstrably inequitable.
• Nasrin Yavari was not a Canadian citizen nor a permanent resident of Canada when she purchased the Home, and the Home is located in the Greater Golden Horseshoe Region, therefore, there is no doubt nor dispute as to her liability to pay the NRST.
• The only issue is whether there are special circumstances that make the requirement to pay the full statutory amount of NRST demonstrably inequitable.
• Conditions for any of the rebates must be met in their entirety.
• To qualify for the permanent resident rebate, all the criteria must be met. In particular, Nasrin Yavari must have become a permanent resident by August 24, 2021.
• It should be noted that Nasrin Yavari was not eligible to begin the process to obtain permanent resident status until October 28, 2020 - this is more than two years from the date of purchase of the Home. The choice to purchase the home at the time she did carried a risk that she would not become a permanent resident of Canada in time to qualify for the NRST rebate.
• While the circumstances that may have led to the late granting of permanent resident status are unfortunate, they are not sufficient to justify granting relief from the payment of NRST.
• In 2020, the ministry applied an administrative concession to extend the period of time a person must occupy their property as their principal residence for the purposes of an NRST rebate to 60 days after the day the state of emergency was terminated. The administrative concession only applied to purchases that occurred from January 17, 2020, to July 24, 2020, the date the state of emergency was terminated. In addition, the time limit for filing an application for a rebate was suspended between March 16, 2020, and September 14, 2020, thereby increasing the time limit an applicant had to file certain claims.
• Note that this concession did not apply to the requirement to qualify for a rebate. The issue in this file is the date in which the conditions to apply for a rebate were met, not the date on which a rebate was requested. Furthermore, the purchase of the Home in this file occurred well before the period covered by the administrative concession.
• The Ministry of Finance's responsibility is to administer the LTTA by applying the law as it is written and when relief is sought pursuant to section 20 to consider the unique facts of each conveyance.

Current Status I Next steps:

Recommendation:

• It is recommended that the taxpayer should be advised in writing that the request for relief is denied. While the circumstances described in the request are unfortunate for her, they do not constitute circumstances that would render making payment of the NRST inequitable.

Next Steps:

• The Assistant Deputy Minister should advise Nasrin Yavari in writing that her request for relief is denied. While the circumstances described in the request are unfortunate and difficult for her, they do not constitute circumstances that would render making payment of the NRST inequitable. The draft letter is included in this approval package.

[14] There is no provision for internal review or statutory appeal of the Minister’s decision not to exercise his discretion under s. 20 of the LTTA.

[15] The Minister asserts that the court should decline to hear this application, as the LTTA provides an alternative remedy which the applicant has not exhausted. Alternatively, the Minister submits that their decision was reasonable in light of the broad discretion granted under s. 20 of the LTTA.

Statutory Background

Land Transfer Tax Act, R.S.O. 1990, c. L.6

Interpretation

1 (1) In this Act,

“foreign entity” means a foreign corporation or a foreign national; (“entité étrangère”)

“foreign national” means an individual who is a foreign national as defined in subsection 2 (1) of the Immigration and Refugee Protection Act (Canada); (“étranger”)

Additional tax on foreign entities and taxable trustees

(2.1) In addition to any tax payable under subsection (1), and subject to section 2.1, every person who, on or after April 21, 2017, tenders for registration in Ontario a conveyance by which any designated land that is located within the specified region is conveyed to a foreign entity or a taxable trustee shall pay, when the conveyance is tendered for registration or before it is tendered for registration, a tax,

(a) computed at the rate of 15 per cent of the value of the consideration for the conveyance; or

(b) if an alternate rate of tax is prescribed by the Minister for the purposes of this subsection, computed by multiplying the prescribed alternate rate by the value of the consideration for the conveyance. 2017, c. 17, Sched. 1, s. 2.

Disallowance of refund

(7) Where a person has, in accordance with this Act and the regulations, applied for a refund or rebate under this Act or the regulations and the person’s claim is in whole or in part refused, the Minister shall cause to be delivered to such person a statement of disallowance in such form as the Minister shall require, and the statement shall specify the amount of the disallowance and the reasons therefor. R.S.O. 1990, c. L.6, s. 8 (7); 1997, c. 19, s. 12 (2); 2017, c. 34, Sched. 23, s. 3.

Notice of objection

13 (1) A person that objects to an assessment made under section 12 or a statement of disallowance made under subsection 8 (7) may, within 180 days from the day of mailing or delivery by personal service of the notice of assessment or statement of disallowance, serve on the Minister a notice of objection in the form approved by the Minister. 1997, c. 43, Sched. F, s. 6 (4).

Facts and reasons to be given

(1.1) The notice of objection shall,

(a) clearly describe each issue raised by way of objection; and

(b) fully set out the facts and reasons relied on by the person in respect of each issue. 1997, c. 43, Sched. F, s. 6 (4).

Reconsideration

(3) Upon receipt of a notice of objection, the Minister shall with all due despatch reconsider the assessment or statement of disallowance and vacate, confirm or vary the assessment or statement of disallowance or reassess or serve a fresh statement of disallowance and the Minister shall thereupon notify the person who has made the objection of his or her action in writing. R.S.O. 1990, c. L.6, s. 13 (3); 1997, c. 43, Sched. F, s. 6 (6).

Appeal

14 (1) After the Minister has given the notification required by subsection 13 (3), a person who has served notice of objection under section 13 may appeal to the Superior Court of Justice to have the assessment or the statement of disallowance vacated or varied or reassessed or a fresh statement of disallowance issued, but no appeal under this section shall be instituted after the expiration of ninety days from the day on which notice has been mailed to such person under subsection 13 (3). R.S.O. 1990, c. L.6, s. 14 (1); 2001, c. 23, s. 145 (1).

Appeal, how instituted

(2) An appeal to the Superior Court of Justice shall be instituted by,

(a) filing a notice of appeal with the court in the form approved by the Minister;

(b) paying a fee to the court in the same amount and manner as the fee payable under regulations made under the Administration of Justice Act on the issue of a statement of claim; and

(c) serving on the Minister a copy of the notice of appeal as filed. 1997, c. 43, Sched. F, s. 6 (8); 2001, c. 23, s. 145 (2).

Reply to notice of appeal

(5) The Minister shall with all due dispatch serve on the appellant and file with the Superior Court of Justice a reply to the notice of appeal admitting or denying the facts alleged and containing a statement of such allegations of fact and of such statutory provisions and reasons as the Minister intends to rely on, and where the Minister fails to serve the reply within 180 days from the date of service upon the Minister of the notice under subsection (2), the appellant may, upon twenty-one days notice to the Minister, apply to a judge of the Superior Court of Justice for an order requiring the reply to be served within such time as the judge shall order, and the judge may, if the judge considers it proper in the circumstances, also order that, upon the failure of the Minister to serve the reply in the time specified by the order, the assessment or statement of disallowance with respect to which the appeal is taken shall be vacated and any tax paid pursuant to such assessment, or any refund disallowed pursuant to such statement of disallowance, shall be repaid or refunded to the appellant, but nothing in this section revives an appeal that is void or affects a statement of disallowance or assessment that has become valid and binding. R.S.O. 1990, c. L.6, s. 14 (5); 1999, c. 9, s. 135; 2001, c. 23, s. 145 (3).

Matter deemed action

(6) Upon the filing in the Superior Court of Justice of the material referred to in subsection (5), the matter shall be deemed to be an action in the court, and the practice and procedure of the court, including the right of appeal and the practice and procedure relating to appeals, apply to every matter that is deemed to be an action under this subsection, and every judgment and order given or made in every such action may be enforced in the same manner and by the like process as a judgment or order given or made in an action commenced in the court. R.S.O. 1990, c. L.6, s. 14 (6); 2001, c. 23, s. 145 (4).

Disposition of appeal

(7) The court may dispose of an appeal by allowing it, by dismissing it, or by allowing it in part and directing the Minister to vacate, vary or reconsider the assessment or statement of disallowance and reassess or issue a fresh statement of disallowance as indicated by the judgment of the court. R.S.O. 1990, c. L.6, s. 14 (7).

Idem

(8) In delivering judgment disposing of an appeal, the court may order payment or refund of an amount by the appellant or by the Minister, as the case may be, and may make such order as to costs as is considered proper. R.S.O. 1990, c. L.6, s. 14 (8); 1994, c. 18, s. 4 (5); 2004, c. 31, Sched. 21, s. 19.

Resolving disputes

20 If any doubt or dispute arises as to the liability to pay a tax or any portion of a tax demanded under the authority of this Act, or if owing to special circumstances it is deemed inequitable to demand payment of the whole amount imposed by this Act, the Minister may accept such amount as he or she deems proper. R.S.O. 1990, c. L.6, s. 20.

O. Reg. 182/17: Tax Payable Under Subsection 2(2.1) of The Act by Foreign Entities and Taxable Trustees

Rebate for foreign nationals who become permanent residents of Canada

5. (1) Subject to section 7.1.1, the Minister may rebate tax paid by a foreign national under subsection 2 (2.1) of the Act in respect of a conveyance of land if the Minister is satisfied that,

(a) the foreign national is the only transferee named in the conveyance or, if two transferees are named, they are the foreign national and the foreign national’s spouse;

(b) the foreign national became a permanent resident of Canada within four years after the day the conveyance was tendered for registration; and

(c) on and after a date that is within 60 days after the day the conveyance was tendered for registration, and continuing until the date on which an application under subsection (2) is made, the land has been occupied by the transferee or transferees as their principal residence. O. Reg. 182/17, s. 5 (1); O. Reg. 144/24, s. 7 (1, 2).

(1.1) In the case of a conveyance of designated land that consists solely of land described in section 1.1.1, clause (1) (c) does not apply. Instead, the Minister must be satisfied that the land has been used by the transferee or transferees in connection with their principal residence located in the same condominium complex as the land described in section 1.1.1 beginning within 60 days after the day the conveyance was tendered for registration and continuing until the date on which the application for a rebate under subsection (2) is made. O. Reg. 144/24, s. 7 (3).

(2) An application for a rebate under this section shall be made before the 181st day after the foreign national or the foreign national’s spouse became a permanent resident of Canada, but no application shall be made later than four years and 180 days after the day the tax became payable. O. Reg. 182/17, s. 5 (2); O. Reg. 144/24, s. 7 (4).

Issues

1. Should the court exercise its discretion not to hear this judicial review application due to failure to appeal?

2. Was the Minister’s decision unreasonable, or procedurally unfair or did the Minister improperly fetter their discretion?

Court’s Jurisdiction

[16] The Divisional Court has jurisdiction to hear this application pursuant to ss. 2(1) and 6(1) of the Judicial Review Procedure Act, R.S.O. 1990, c. J.1.

Standard of Review

[17] The presumptive standard of review for all questions on judicial review is reasonableness: Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65 at para.10. None of the exceptions to reasonableness review are present in this case.

[18] Regarding breaches of procedural fairness, this Court must determine whether the requisite level of procedural fairness was granted by applying the factors set out in Baker v. Canada (Minister of Citizenship and Immigration), [1999] 2 S.C.R. 817.

Analysis

Issue 1: The court should not exercise its discretion to refuse to hear this judicial review application due to failure to appeal a reconsideration decision under s. 13 disallowing a s. 5 claim

[19] The Minister submits that this court should not hear this application for judicial review because the applicant did not exercise her right to appeal the s. 13 statement of disallowance of her prior s. 5 claim.

[20] There is no dispute that the applicant did not meet the 4 year requirement for becoming a permanent resident under s. 5 which was the basis for the Minister’s disallowance of her s. 5 claim. There would be no point in requiring the applicant to incur the costs and delay of a fruitless appeal as a precondition to her bringing a judicial review application of the disallowance of her subsequent s. 20 application.

[21] For the judicial review application to be premature, the court would need to find that the statutory appeal of the Minister’s decision to decline the rebate under the applicant’s s. 5 application is a satisfactory alternative to judicial review of the Minister’s discretionary decision not to accept a lower amount of tax under s. 20. These are separate remedies. The right to a statutory appeal of the Minister’s decision to decline the rebate under s. 5 is not a satisfactory alterative to judicial review of the Minister’s discretionary decision under s. 20.

Issue 2: The Minister’s decision was unreasonable

[22] The applicant submits that the Minister’s decision was unreasonable, procedurally unfair and the Minister fettered their discretion.

[23] The LTTA gives the Minister broad discretion to decide whether taxpayer relief should or should not be granted. There are no statutory parameters limiting what “special circumstances” might warrant the Minister “deeming” the payment of tax to be “inequitable.”

[24] The Minister is required under s. 20 to exercise their discretion to consider whether special circumstances existed which made it inequitable to demand the full $510,000 in NRST imposed as a result of the applicant missing the 4 year requirement to become a permanent resident by 10 days. The November 10, 2023 letter the applicant received from the Minister denying her s. 5 application was conclusory and did not explain why the application for a significant rebate of over half a million dollars was denied. The applicant asserts that the standard applied (“truly exceptional”) was higher than the standard set out in s. 20 of the LTTA (“owing to special circumstances it is deemed inequitable”).

[25] In addition to the November 10, 2023 letter, the record in this case includes the Information Note. A reviewing court may look to the record to assess the reasons of an administrative decision-maker. The court can review the evidence and the submissions of the parties. The record may explain an aspect of the decision-maker’s reasoning process that is not apparent from the reasons themselves: Newfoundland and Labrador Nurses’ Union v. Newfoundland and Labrador (Treasury Board), 2011 SCC 62; [2011] 3 S.C.R. 708, at para. 15; Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65, at para. 94.

[26] The Minister relies on the November 10, 2023 letter and the Information Note in their submission in support of their decision being reasonable.

[27] The test for s. 20 (“if owing to special circumstances it is deemed inequitable to demand payment of the full statutory amount”) is set out correctly in the Information Note.

[28] The analysis in the Information Note provides a fuller explanation for why the applicant’s request for relief was denied.

[29] Having considered the reasons in both the November 10, 2023 letter and the Information Note (collectively “the decision”), I have concluded that the Minister’s decision took too narrow a view of “special circumstances” and is therefore not reasonable.

[30] The Information Note reasoned that the choice the applicant assumed by purchasing the home more than two years from the date she became eligible to begin the process to obtain permanent resident status, carried a risk that she would not become a permanent resident of Canada in time to qualify for the NRST rebate. It concluded that:

• While the circumstances that may have led to the late granting of permanent resident status are unfortunate, they are not sufficient to justify granting relief from the payment of NRST.

[31] The applicant could not have known when she purchased the property in 2017 that she was taking on the risk of delays in obtaining permanent residency due to an unprecedented COVID-19 pandemic. It is not hard to believe that COVID-19 caused a 10 day delay in the applicant meeting the 4 year deadline.

[32] The Information Note stated that the Ministry applied an administrative concession during the two states of emergency that were in place during COVID-19:

1. to extend the occupancy requirement for a NRST rebate (the requirement in s. 5(1) (c)of the LTTA); and

2. to extend the time limit for filing an application for rebate (the requirement in s. 5(2) of the LTTA).

[33] The Information Note reasoned that the concession did not apply to the applicant’s situation and the purchase of her home occurred well before the period covered by the administrative concession. The implication is that because the administrative concessions during the two states of emergency did not cover the applicant’s situation, the applicant could not rely upon the impact of COVID-19 in delaying her obtaining permanent residency as "special circumstances.”

[34] The backlogs in processing government applications caused by the Global pandemic continued well after the periods that government offices were closed during the two states of emergency. The Information Note accepted that the applicant’s permanent residency process was delayed by 5 months due to delays in the federal government scheduling of her language testing appointment and by two months due to delays in scheduling her medical test. These were both prerequisites to and delayed her filing and obtaining her application for permanent residency within the 4 year timeline.

[35] It is too narrow a view of special circumstances to reason that because the government granted administrative concessions due to COVID-19 in regard to the NRST during the two states of emergency that did not apply to the applicant’s circumstances, the very real effect of the pandemic on the applicant not meeting the four year requirement should be disregarded or could not be special circumstances.

[36] The Minister found that the effect of the delays in her language testing appointment and medical test meant that she waited longer than she anticipated to obtain permanent resident status.

This ignored the special circumstances central to the applicant’s request for relief, namely that COVID-19 caused the delays. Focusing on the fact that the applicant bought her home well before the pandemic again ignored the effect of COVID-19 causing the delays.

[37] The analysis in the Information Note states that the statutory conditions for rebates must be met in their entirety and the applicant did not meet the deadline for obtaining permanent residency. The Minister argues that to agree with the applicant that there is no reasonable way of concluding that the imposition of a tax of $510,000 is not inequitable would essentially be to say that there is a specific exception to the rebate requirement in s. 5(1)(b) accessible through s. 20 when s. 20 says nothing of the kind. The inference that arises is that the applicant was denied relief under s. 20 because it was considered to be contrary to the statutory scheme of the legislation to grant the relief.

[38] Section 20 is part of the statutory scheme as well as the 4 year limitation period for obtaining permanent residency and requesting a rebate in s. 5. There is nothing in s. 20 that excludes taxpayers who have not met the statutory 4 year requirement.

[39] The purpose of s. 20 is to consider whether special circumstances of an applicant make demanding payment of the statutory amounts inequitable. Every case will depend on its individual circumstances. However, the fact that the COVID-19 pandemic may have affected other NRST taxpayers fails to consider how the global outbreak of Coronavirus affected the applicant.

[40] The Minister submits that while the limitation period is harsh, it is valuable in that it renders matters final after a certain time.

[41] The need for finality must be considered in light of the applicant’s special circumstances: a 10 day delay as a result of the COVID-19 pandemic in meeting the 4 year deadline.

[42] By focusing on s. 20 relief being rarely granted and on the need for finality, the Minister again took too narrow a view of the special circumstances caused by COVID-19 that the applicant submits make the requirement to pay the full amount of NRST demonstrably inequitable.

[43] If the applicant fell within the harm the NRST is meant to redress and she was trying to take advantage by using the Pandemic to get around that harm, that could be a different situation.

[44] NRST aims to curb speculative activity by foreign buyers that can artificially drive up housing prices, particularly by discouraging non-resident foreign entities from purchasing property who do not intend to live in the property or where the purchase is purely for speculative motives. In this case, there is no issue that the applicant is not a speculator and intended to and did live in the property she purchased. She resided in the home within 60 days of its purchase, attended school once she obtained her student visa, and then worked as an employed person and followed the path of temporary resident to permanent resident once she obtained her work permit. The Information Note acknowledged that she would have qualified for the NSRT rebate but for her inability to meet the 4 year deadline. By not considering these circumstances, the Minister did not consider the applicant’s particular circumstances.

[45] In all the circumstances, to deny the applicant’s claim on the basis that s. 20 relief is rarely used or exceptional is another way of failing to engage with s. 20.

Conclusion

[46] The Minister’s decision is unreasonable and quashed.

[47] The applicant seeks an order for mandamus requiring that the Minister exercise their power to grant relief from the tax. The Minister’s factum makes no arguments regarding an appropriate remedy.

[48] This is not an appropriate case for ordering mandamus. Under s. 20, it is for the Minister to determine, exercising proper principles, whether special circumstances exist which make it inequitable to demand payment of the whole NRST. The applicant’s request for relief under s. 20 shall be returned to the Minister to conduct a fresh review in accordance with these reasons and taking into account the effect of COVID-19 on the missing of the statutory deadline by the applicant to become a permanent resident by 10 days.

Costs

[49] As the successful party, the applicant shall be entitled to costs of $10,000.

___________________________ Backhouse J.

I agree. ___________________________ D.L. Corbett J.

I agree. ___________________________ Stothart J.

Released: September 27, 2024

CITATION: Yavari v. Ontario (Minister of Finance), 2024 ONSC 5296

DIVISIONAL COURT FILE NO.: 705/243

DATE: 20240927

ONTARIO SUPERIOR COURT OF JUSTICE DIVISIONAL COURT

Backhouse, D.L. Corbett, Stothart JJ.

BETWEEN:

NASRIN YAVARI Applicant

– and –

MINISTER OF FINANCE Respondent

REASONS FOR DECISION

BACKHOUSE J.

Date: September 27, 2024