Executive Summary: Key Legal and Evidentiary Issues

• The Court confirmed that a corporation holding legal title, even as an agent, qualifies as a transferee under the Property Transfer Tax Act.

• An entity controlled by a foreign national was found liable for the additional transfer tax despite arguments about agency and beneficial ownership.

• Legal ownership, not beneficial interest, determines tax liability under the statute according to binding appellate precedent.

• The chambers judge erred in law by concluding agency status excluded liability for additional transfer tax.

• The Court declined to hear a constitutional challenge to the tax for the first time on appeal, emphasizing procedural fairness and evidentiary gaps.

• The appeal was allowed and the prior tax assessment against the company was reinstated.

Background of the property transfer and tax assessment

The case involves 1084204 B.C. Ltd. (“108”), a British Columbia corporation controlled by Hans Oeri, a foreign national. In 2019, 108 purchased a residential property in Saanich, B.C., for over $1.6 million. At the time of transfer, 108 was the registered owner and declared only the basic property transfer tax. It did not report any liability for the additional transfer tax (ATT), asserting that it acted as agent for Ms. Yi Sui, a Canadian permanent resident and Mr. Oeri’s common law spouse.

The company filed a declaration of bare trust and agency agreement asserting it held title solely for Ms. Sui. Nonetheless, the Ministry of Finance issued an ATT assessment of $331,980, citing 108's status as both a “foreign entity” and “taxable trustee” under the Property Transfer Tax Act.

Decision by the chambers judge

The B.C. Supreme Court judge allowed 108’s appeal and set aside the tax assessment. The judge reasoned that 108 held the property as an agent for Ms. Sui and was therefore not a transferee or trustee under the statute. The judge also accepted an alternative argument that even if there was a bare trust, the trust should be ignored for tax purposes due to the agency relationship.

Appeal and legal analysis by the Court of Appeal

The Province appealed, arguing that the chambers judge misinterpreted the law. The central question was whether legal title alone was sufficient to trigger liability for ATT, regardless of whether 108 was also acting as an agent or trustee.

The Court of Appeal held that the chambers judge erred in law. Relying on binding precedents such as Simkin v. British Columbia and Diligenti v. HMTQ, the Court emphasized that liability for property transfer tax—and the additional transfer tax—is triggered by the registration of legal title, not beneficial ownership. The Court found that 108’s registration of title in its name rendered it a transferee under the Act, making it liable for the ATT due to its foreign ownership status.

The Court rejected 108’s argument that its agency role shielded it from the tax and declined to revisit settled law stating that equitable ownership is irrelevant to the statutory tax liability. The Court also noted that 108’s own filing of the general property transfer tax undermined its position that Ms. Sui was the real transferee.

Constitutional challenge and its dismissal

On appeal, 108 attempted to raise a new constitutional argument, claiming that the ATT was an indirect tax and thus unconstitutional. The Court refused to entertain the argument, citing multiple procedural and substantive deficiencies. It emphasized that constitutional issues should not be raised for the first time on appeal unless the interests of justice demand it, which was not the case here due to lack of an evidentiary record and procedural delay.

Final outcome

The appeal was allowed. The Court of Appeal reinstated the assessment of the additional transfer tax against 108, confirming that registration of legal title by a foreign-controlled entity triggers liability under the Property Transfer Tax Act, regardless of trust or agency arrangements. The Court’s decision reinforces the statutory focus on legal ownership as the decisive factor for tax purposes.