Russell J found that the appellant had not substantially renovated two Ontario properties, so that their sale was not made by the appellant as a “builder” and were not subject to HST under Sched. V, Pt. I, s. 2.
One property, the “Craven Road” property, was a basic bungalow with an unfinished basement. There was an extension at the back of the house containing a family room, the kitchen was moved, a plaster wall replaced with drywall, a bedroom was taken out and the main floor hardwood was covered with laminated wood. A whole second storey was added (along with internal staircase) and rooms were added to the basement (and the new rear space was storage space). In determining whether there was substantial renovation of the Craven Road property and of the second property (the “Fourth Street” property) both parties accepted the use of the second of the three methods referred to in GST/HST Technical Information Bulletin B-092 for measuring whether a renovation had been “substantial” (with 90% appearing in B-092 as the minimum percentage for a property to be considered as having been “substantially renovated”). That method was comparing the total area of renovated floor and wall spaces to the building’s total area of floor and wall spaces.
In applying this method, Russell J accepted (at para. 31) that:
“[F]looring” in the definition must mean “sub-flooring” as distinguished from whatever flooring was installed covering over the sub-flooring. … Putting down a new carpet, or new laminate wood flooring … [is not] sufficiently significant to contribute to whether a building might be said to have been “gutted.”
He went on to find that the renovations did not result in the “gutting” of the building, so that it was not substantially renovated.
The Fourth Street property was a two-storey building before and after the work, which entailed putting laminated flooring in the basement, moving the stairs, removing a partition on the main floor and the addition of three bedrooms on the second storey. Russell J found that given that some rooms were largely untouched, the 90% threshold under the chosen methodology (the second method) had not been exceeded.