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GST/HST — litigation over real estate purchase

My client contracted to buy a property to use in his professional practice. The property had originally been a home, but in recent years had been used only as an office. The Agreement of Purchase and sale provided that, if HST applied, it was included in the purchase price.

My client determined that the sale was taxable, and correctly tendered 100/113ths of the purchase price to the vendor. The vendor refused to accept this amount, and the parties went into litigation. During this process my client came to me.

I provided the client with a 13-page analysis explaining why the sale was taxable and why he was therefore legally correct to tender only 100/113ths of the HST-include price to the vendor. I explained, with reference to the case law and various publications, why my client would win the lawsuit.

My client provided this letter to his lawyer to use in settlement negotiations, and the purchaser conceded the lawsuit.

Problem vanished!

(2012)