The
Chief
Justice
(judgment
delivered
from
the
Bench)
(concurred
in
by
Pratte,
J
and
Hyde,
DJ):—Except
as
hereinafter
set
out,
the
circumstances
in
this
appeal
do
not
differ
materially
from
those
in
The
Queen
v
Rockmore
Investments
Ltd
[see
p
291],
which
was
heard
simultaneously
and
in
which
we
have
dismissed
an
appeal
by
the
respondent
from
the
judgment
of
the
Trial
Division
referring
the
assessment
appealed
against
back
for
reassessment.
I
direct
that
a
copy
of
my
reasons
in
that
appeal,
when
transcribed,
be
placed
on
this
file
The
difference
between
the
two
matters
appears
from
the
following
portion
of
the
reasons
of
the
learned
trial
judge:
However,
although
counsel
appeared
to
agree
that
all
three
companies
were
in
the
same
position
with
respect
to
the
applicability
of
section
125
to
the
amounts
of
income
earned
by
them,
I
do
not
find
this
to
be
the
case.
In
accordance
with
the
findings
in
the
Cosmopolitan
Investments
Co
and
the
Finning
cases,
and
the
statement
in
the
Weintraub
case
(supra),
I
find
that
ESG
is
in
a
different
position
from
Rockmore
and
MRT.
Its
business
activity
was
not
carried
on
by
its
officers
or
directors
or
by
any
of
its
shareholders
but
was
merely
turned
over
to
Mr
Godel’s
Monarch
Management
Company,
which
operated
it.
No
further
intervention
or
supervision
was
done
on
its
behalf
nor
were
any
directions
given
in
connection
with
its
day-to-day
operations.
The
receipt
of
semi-annual
reports
from
the
agent
is
not
in
itself
a
business
activity.
I
cannot,
therefore,
conclude
that
this
manner
of
operation
constitutes
the
carrying
on
of
an
“active
business”
by
the
company
itself.
Therefore,
in
the
case
of
ESG
the
appeal
must
fail.
With
respect,
I
do
not
agree
that
there
is
any
material
difference
in
principle,
in
so
far
as
the
carrying
on
of
an
active
business
by
a
corporation
is
concerned,
between
carrying
it
on
through
the
agency
of
officers
or
servants
of
the
corporation
and
carrying
it
on
through
the
agency
of
an
independent
contractor.
The
question
is
whether
the
taxpayer’s
“income”
is
“from
an
active
business”
and,
in
my
view,
the
answer
must
be
the
same
in
both
cases.
I
am
therefore
of
opinion
that
this
appeal
by
the
taxpayer
must
be
allowed.
I
propose
that
this
appeal
be
allowed
with
costs,
and
that
the
appellant’s
assessment
under
Part
I
of
the
Income
Tax
Act
for
the
1972
taxation
year
be
referred
back
to
the
Minister
of
National
Revenue
for
reassessment
on
the
basis
that
the
appellant’s
income
for
that
year
was
income
from
“an
active
business
carried
on
in
Canada”
within
the
meaning
of
those
words
in
subparagraph
125(1)(a)(i)
of
the
Income
Tax
Act.
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