Dismissed arguments that his rights breached on being taxed on West Vancouver home
The Supreme Court of British Columbia has struck down the claim of an Iranian refugee appealing a decision that he pay a $1.32 million “foreign national” tax on a $6.6-million house in West Vancouver, dismissing his arguments that his Charter rights have been infringed.
“While it is not obvious to me that the s. 7 claim might be saved by an amendment to plead additional facts, and neither is it obvious that the s. 7 claim is unsalvageable,” Justice Gomery wrote in a July 24 decision. “I do agree with the province that the s. 15 claim cannot be saved.
“In my opinion, Mr. Bakhtiari should have a further opportunity to plead the s. 7 claim. He may apply . . . for permission to file a third amended notice of civil claim in which the s. 7 claim is again advanced but on a different factual basis.”
Justice Gomery also said Bakhtiari, the province, or any other party to the action may request that he hear the application. “I will consider doing so if it will not result in substantial delay, but to be clear, I am not seized of the application.”
Arrived as a refugee in 1995
Bakhtiari came to Canada from Iran as a refugee in 1995. He claimed political asylum, was granted permission to stay, and has lived in British Columbia since his arrival. However, until 2022 he was unable to obtain the legal status of a permanent resident.
In 2019, Bakhtiari purchased for $6.6 million a house on Groveland Road in West Vancouver. The house was purchased by his corporation, Technocorp Venture Capital Inc., of which he is the sole shareholder.
Following the purchase, Technocorp became liable to pay a $1.32 million tax to the government of British Columbia because the property is in West Vancouver and Bakhtiari was a “foreign national,” someone who is neither a Canadian citizen nor a permanent resident when Technocorp obtained title to the property.
The tax was imposed under the provisions of the Property Transfer Tax Act, R.S.B.C. 1996, c. 378 [PTTA]. This additional property transfer tax, often called the “foreign buyer’s tax,” was levied at 20 percent of the purchase price. Technocorp has not paid the tax.
The dominant purpose of the tax is to address the problem of housing affordability in specified areas of the province by discouraging foreign nationals from purchasing residential property in those areas, thereby reducing demand.
Disputing the foreign buyer’s tax on Charter grounds
Bakhtiari and Technocorp disputed the tax on constitutional grounds. Specifically, they say the imposition of the tax violates Bakhtiari’s rights under s. 7 to liberty and security of the person, and his right under s. 15 to equality under the law without discrimination.
Bakhtiari and Technocorp also have a claim against the federal government for compensation for gross negligence and abuse of office in delaying the processing of Bakhtiari’s application for legal status as a permanent resident. He applied for permanent residency three times since arriving here in 1995 before receiving it in February 2022.
The province applied to the court to strike the claims against it, maintaining that it is “plain and obvious” that the constitutional arguments won’t succeed. It cited earlier court cases where the Supreme Court and the Court of Appeal rejected a constitutional attack on the tax under s. 15 of the Charter. The province also says that Bakhtiari’s claim is an attempt to advance an economic interest not protected by s. 7 of the Charter.
Bakhtiari opposed the application to strike, claiming he qualifies for protection under s. 15 as a stateless person, a status that previous cases have not considered. He also denied the lawsuit is an attempt to advance an economic interest not protected by s. 7 of the Charter.
He claimed his rights to liberty and security of the person protected by s. 7 are infringed by legislation that “sends an implicit state-sponsored message from the Province that [he] is the kind of person who should be discouraged from owning a home in British Columbia” because the consequence of the tax and the message was that he experienced “loss of dignity, loss of social status, psychological distress and anxiety.”
Bakhtiari argued four grounds of discrimination analogous to those outlined in s. 15 of the Charter (race, national or ethnic origin, colour, religion, sex, age, and mental or physical disability). They include:
- He is a long-term resident of British Columbia who is permanently entitled to remain in Canada but denied or deprived or temporarily ineligible for permanent resident or citizenship status;
- He is a declared convention refugee who is entitled to remain in Canada and permanently or temporarily ineligible for permanent resident or citizenship status;
- He is a person who has no functional or practical citizenship in any state (a “Stateless Person”); and
- He is a person who is a non-citizen, the processing of whose successful application for permanent resident status was delayed or postponed by the Government of Canada.
The province countered that these grounds are all versions of immigration, which is not an analogous ground under s. 15.
Statelessness argument “plainly unworkable”
Justice Gomery wrote in his decision that Bakhtiari’s definition of “statelessness” is “plainly unworkable” because what constitutes functional or practical citizenship is fundamentally uncertain.
The judge said Bakhtiari is “not truly a stateless person,” defined in the United Nations Convention relating to the Status of Stateless Persons as “a person who is not considered as a national by any state under the operation of its law.” Bakhtiari acknowledges he is, formally, a citizen of Iran but is stateless “as a practical matter” because he cannot return to Iran at the risk of his life.
Bakhtiari’s definition of a stateless person includes people who are not genuinely stateless but have a nationality, Justice Gomery wrote, even if that foreign citizenship is of no functional or practical benefit to them.
Also, “a workable definition of statelessness cannot depend on the absence of political or legal rights. Many authoritarian states do not afford significant rights to their citizens, yet those citizens could not be described as stateless.”
He also noted that while distinctions such as citizenship, marital status, sexual orientation, and aboriginal residence (on or off a reserve) have been determined to be analogous grounds, “immigration status is not an analogous ground.”
As for s. 7 arguments, Justice Gomery dismissed Bakhtiari’s contention that the tax significantly impairs his liberty to purchase a home in the municipality of his choice. Bakhtiari argued that the constitutional protection of liberty under s. 7 extends to such fundamental life choices.
Justice Gomery wrote that the tax “does not limit Bakhtiari’s freedom. . .. The tax is not a prohibition. Payment is not triggered by residency in West Vancouver or any other part of [Greater Vancouver.] The tax only attaches an economic consequence to the purchase of residential property within [Greater Vancouver].”
The judge noted that s. The Charter’s framers deliberately drafted 7 to exclude the protection of property rights and economic liberty generally. To accept Bakhtiari’s argument would turn s. 7 “into a vehicle for the protection of fundamentally economic rights and interests.”
Subjecting the tax liability imposed by the foreign buyer’s tax to constitutional scrutiny because it impairs taxpayers’ liberty to reside where they will “would expand s. 7 to encompass the protection of property rights by the back door.”
Section 7 of Charter doesn’t deal with economic rights
On Bakhtiari’s other s. 7 argument – that the tax has breached his rights to security – he argued the primary purpose of the tax is to discourage foreign nationals such as himself from purchasing residential property in West Vancouver and other parts of Greater Vancouver.
Bakhtiari’s argument calls for “consideration of his personal circumstances and vulnerabilities” and how housing is a critical aspect of one’s social identity and home ownership a symbol of belonging.
The exposure to the tax caused Bakhtiari “to experience loss of dignity, loss of social status, psychological distress, and anxiety,” breaching his right to security of the person.
However, Justice Gomery said such a test requires an objective assessment. It is not enough that the tax has “an effect, even a serious and profound effect, on Bakhtiari’s psychological integrity.” It must be an effect “greater than ordinary stress or anxiety” on a person of reasonable sensibility.
“Bakhtiari has not pleaded facts that satisfy this objective test.”