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Iranian refugee who bought $6.6M home in West Vancouver fails to convince judge foreign buyers' tax is unconstitutional

Homes in West Vancouver's British Properties development are seen from above in this undated photo from shutterstock.com. Homes in West Vancouver's British Properties development are seen from above in this undated photo from shutterstock.com.
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An Iranian refugee who has lived in British Columbia since 1995 but did not receive permanent resident status until last year has had his challenge to the constitutionality of the province's foreign buyers' tax rejected by the B.C. Supreme Court.

Kourosh Bakhtiari purchased a home in West Vancouver's tony British Properties neighbourhood for $6.6 million in 2019, according to the court decision issued earlier this week.

Bakhtiari made the purchase through his company, Technocorp Venture Capital Inc., of which he is the sole shareholder. The decision notes that the company bought the home on Groveland Road for Bakhtiari's benefit and he has resided there since the purchase.

In July 2021, the province issued a notice of assessment to Technocorp for $1.32 million, representing the "additional property transfer tax" – referred to throughout the decision as the "ATT" – of 20 per cent applicable to the home purchase because the company is controlled by a foreign citizen.

Bakhtiari and his company sued the provincial and federal governments over the tax, arguing that its imposition violated his rights under Sections 7 and 15 of the Charter of Rights and Freedoms.

Section 7 protects the right to liberty and security of the person, and Section 15 protects the right to equality under the law without discrimination.

Bakhtiari alleged that the foreign buyers' tax was discriminatory when applied to him, because he was a "stateless" person at the time the purchase was made. Stateless people, he argued, are protected from discrimination by the Charter.

Similarly, he alleged that the tax significantly impaired his liberty to purchase a home in the municipality of his choice – interfering with his Charter right to liberty – and that it caused him "to experience loss of dignity, loss of social status, psychological distress, and anxiety," interfering with his Charter right to security of the person.

The B.C. government rejected Bakhtiari's arguments and petitioned the court to dismiss his lawsuit, which Justice Geoffrey B. Gomery did in his decision, though he left the door open for Bakhtiari to modify his claim.

IRANIAN REFUGEE NOT TRULY 'STATELESS'

On the Section 15 question, Gomery found that Bakhtiari's definition of "statelessness" was "unworkable."

Bakhtiari came to Canada from Iran in 1995, seeking political asylum, according to the decision. He was granted permission to stay, and has lived in B.C. ever since.

The decision indicates he applied for permanent resident status in Canada twice – in 1997 and 2015 – before finally being granted permanent residency in 2022, on his third application.

Throughout that time, he has remained an Iranian citizen. He argued before the court that he is stateless "as a practical matter" because returning to Iran would be risking his life.

"To be a stateless person, as Mr. Bakhtiari has defined it, is simply the condition of a foreign national in Canada whose foreign citizenship is of no functional or practical benefit to them," Gomery wrote in his decision.

"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."

Having rejected Bakhtiari's definition of statelessness, the judge concluded that his argument that the foreign buyers' tax discriminates against stateless people could not apply to his case.

RIGHTS TO LIBERTY AND SECURITY NOT IMPEDED

On the Section 7 question, Gomery addressed arguments about the rights to liberty and security of the person separately.

While Canadian courts have sometimes held that Section 7 protects "fundamental personal choices," including where to live, Gomery found that Bakhtiari's choice to buy a home in West Vancouver doesn't meet the standard set in previous decisions.

The judge drew a distinction between Bakhtiari's case and a famous one in which a municipal employee was required, by law, to live in the municipality where he worked.

In that case, some of the justices on the Supreme Court of Canada held that the law infringed on the employee's right to liberty.

In Bakhtiari's case, Gomery wrote, the foreign buyers' tax does not limit his freedom of choice in the same way or to the same extent. He is not required to pay it because he chose to live in West Vancouver. He is required to pay it because he chose to buy property there.

"If Mr. Bakhtiari’s argument that the ATT interferes with his constitutionally protected liberty were accepted, the consequences would be far reaching," Gomery wrote.

"The argument does not engage Mr. Bakhtiari’s personal characteristics, only his liberty, or freedom of choice, and the same argument would be open to anyone. It could be advanced against any land-use regulation that attaches adverse economic consequences for some purchasers of property in a given municipality or region."

Regarding the alleged infringement of Bakhtiari's right to security of the person, Gomery again cited judicial precedent, noting that previous cases have established an "objective test" for such infringement.

"It is not enough that the ATT may have had an effect, even a serious and profound effect, on Mr. Bakhtiari’s psychological integrity," the judge wrote.

"It must be such as would be expected to have had such an effect, greater than ordinary stress or anxiety, on a person of reasonable sensibility. Mr. Bakhtiari has not pleaded facts that satisfy this objective test."

Having rejected each of Bakhtiari's arguments, Gomery concluded that he must grant the province's application to dismiss the lawsuit.

However, he disagreed with the province's assertion that all of Bakhtiari's claims were unsalvageable. He allowed Bakhtiari to apply for permission to submit an amended claim on the Section 7 issue, provided the amended claim is based on different facts.

"While it is not obvious to me that the Section 7 claim might be saved by an amendment to plead additional facts, neither is it obvious that the Section 7 claim is unsalvageable," Gomery wrote. 

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