The
Chief
Justice:—We
do
not
need
to
hear
you
Mr
Gill.
We
are
all
of
the
opinion
that
the
learned
trial
judge
correctly
decided
that
the
payment
of
$95,000
received
by
the
appellant
in
its
1973
taxation
year
must
in
its
hands
be
treated
as
income
for
that
year.
The
appellant
owned
large
tracts
of
woodland
in
Ontario.
Its
business,
which
had
been
carried
on
since
its
incorporation
in
1942,
included
that
of
licencing
others
to
cut
timber
on
the
lands
for
a
fee
calculated
on
a
stumpage
basis.
In
1963
the
appellant
entered
into
three
licencing
contracts
with
companies
referred
to
as
the
“Levesque
Group’’
giving
them
the
right
to
cut
annually
a
quantity
of
timber
within
the
limits
provided.
The
Levesque
Group
was
committed
to
pay
in
each
year
for
the
minimum
quantity
whether
that
quantity
had
been
cut
or
not.
Over
the
period
from
1964-1965
to
1971-72
the
revenue
from
these
three
contracts
constituted
a
very
substantial
portion
of
the
total
revenues
of
the
appellant
from
timber
licencing
contracts.
In
the
latter
part
of
1972
for
economic
reasons
the
contracts
were
terminated
by
mutual
agreement,
the
appellant
later
receiving
the
$95,000
in
question
as
consideration
for
releasing
the
licencees
from
further
performance
of
the
licencing
contracts.
It
was
said
that
this
resulted
in
the
shutting
down
of
appellants’
office
at
Hearst,
Ontario
and
the
laying
off
of
some
employees.
On
this
the
evidence
is
in
our
view
very
vague
and
does
not
present
a
clear
picture
of
what
did
happen.
Whatever
the
changes
were,
however,
it
is
clear
that
the
appellant
did
not
go
out
of
the
business
of
licencing
the
cutting
of
timber
on
its
lands
but
continued
the
business,
the
revenues
of
which,
in
later
years,
exceeded
those
of
the
years
I
have
mentioned.
In
our
view
the
Levesque
Group
contracts
were
contracts
entered
into
in
the
course
of
the
appellant’s
licencing
operation
and
were
at
all
times
assets
of
a
revenue,
as
opposed
to
a
capital,
nature.
The
stumpage
payments
arising
from
them
were
revenue
receipts.
It
appears
to
us,
as
well,
that
the
contract
for
termination
of
the
licences
was
also
a
contract
made
in
the
course
of
the
appellant’s
licencing
operations
and
that
the
$95,000
received
as
the
consideration
for
the
termination
of
the
licences
and
thus
of
the
rights
of
the
appellant
to
the
stumpage
fees
remaining
to
be
paid
under
them
were
also
revenue
receipts
of
the
business
just
as
the
remaining
stumpage
payments
would
have
been
had
they
been
made.
The
appellant’s
submission
was
that
the
$95,000
should
be
regarded
as
compensation
for
the
loss
of
a
capital
asset,
ie
the
licencing
contracts,
and
the
disruption
of
its
income
earning
apparatus
and
in
support
of
his
position
counsel
relied
on
the
decisions
in
Courrier
MH
Inc
v
The
Queen,
[1976]
CTC
567;
76
DTC
6331;
Edgerton
Fuels
Limited
v
MNR,
[1970]
CTC
202;
70
DTC
6158;
MNR
v
Import
Motors
Limited,
[1973]
CTC
719;
73
DTC
5530;
Parsons-Steiner
Limited
v
MNR,
[1962]
Ex
CR
174;
[1962]
CTC
231;
62
DTC
1148;
and
Pepsi-Cola
Canada
Ltd
v
The
Queen,
[1978]
CTC
801;
[1979]
CTC
454;
78
DTC
6546;
79
DTC
5387.
We
do
not
think
that
any
of
these
cases
assist
the
appellant
as
the
situation
in
all
of
them
was
quite
different
from
that
in
the
present
case.
Here
the
contracts
were
but
three
contracts
among
others
of
a
similar
nature
all
made
from
time
to
time
in
the
course
of
the
appellant’s
licencing
operations.
It
may
be
accepted
that
these
were
long
term
contracts,
perhaps
longer
than
most
of
the
others,
and
providing
for
the
cutting
of
more
timber
than
the
others.
But
for
present
purposes
they
are
not
different
on
those
accounts
from
the
other
contracts
made
by
the
appellant
in
the
course
of
its
business.
Under
the
contracts
what
was
to
be
paid
for
was
timber
cut
or
to
be
cut.
The
changing
or
terminating
of
the
contracts
was
also
in
the
course
of
the
appellant’s
business
and
the
consideration
for
the
change
took
the
place
of
stumpage
payments
to
be
received
under
them.
On
the
termination
of
the
contracts
the
areas
referred
to
in
them
became
available
for
licencing
by
the
appellant
to
others
either
on
long
or
on
short
term.
Moreover,
even
accepting
that
the
termination
of
the
contracts
may
have
been
the
occasion
for
some
changes
in
the
manner
of
conducting
the
appellant’s
licencing
operation
the
termination
of
the
contracts
did
not
put
the
appellant
out
of
that
business.
The
appeal
therefore
fails
and
will
be
dismissed
with
costs.
Email this Content