Canada v. Glengarry Bingo Assn.
A-502-95
Sexton J.A.
5/3/99
14 pp.
Appeal from Tax Court's decision respondent (GBA) exempt from charging GST on provision of equipment, services of staff under Excise Tax Act, s. 178-GBA conducting bingo games for members (registered, non-registered charities)-Leased bingo hall, purchased bingo equipment, hired bingo callers, cash advisors, hall manager-Advanced $1500 float to member conducting bingo-At end of night, member returned float, gave GBA rent cheque for use of hall, and supplies cheque including amount for provision of bingo cards, equipment, staff-GBA collecting, remitting GST on rent, bingo cards, but not on supply of equipment, staff-1993 notice of assessment taxing GBA 7% on supply of equipment, staff-S. 178 providing where, in making supply of service, person incurring expense for which reimbursed by recipient of supply, reimbursement deemed to be part of consideration for supply of service, except to extent expense incurred by person as agent of recipient-Tax Court Judge concluding GBA acting as agent to members, not required to pay GST-Appeal allowed-Onus on GBA to establish agency relationship-GBA not acting as agent to members in its dealing with paid staff: (i) GBA employer of paid staff; (ii) GBA not holding itself out to paid staff as agent for members; (iii) members not at risk for obligations owed by GBA to paid staff-GBA contracting as principal-GBA not acting as agent when leasing equipment to members-Not holding itself out as agent; members not at risk concerning any of GBA's obligations for equipment-GBA charging members GST for provision of hall-No distinction between provision of hall, supply of equipment-Tax Court Judge basing finding of agency on bingo licence-Bingo licence not containing express provision establishing GBA would act as agent-Nothing implicit therein supporting finding of agency-That GBA holding funds, reimbursing members not determinative of issue of agency-GBA not keeping funds received from members for expenses in separate account-Financial statements treating funds as property of GBA-Reimbursement of expense alone not leading to finding of agency-GBA not having one of three essential qualities of agency i.e. capacity to affect legal position of members-Not authorized to enter contracts with third parties on behalf of members-As no agency relationship, s. 178 not applicable-Pursuant to s. 165, respondent liable for GST on taxable supplies-Excise Tax Act, R.S.C., 1985, c. E-15, ss. 165 (as enacted by S.C. 1990, c. 45, s. 12), 178 (as enacted idem).