Rip,
T.C.J.:—The
issue
in
these
appeals
from
income
tax
assessments
for
1982
and
1983
is
whether
a
housing
unit
was
ever
located
on
two
properties
disposed
of
by
the
appellant,
Patrick
Gerald
Flanagan
("Flanagan"),
and,
if
so,
whether
the
properties
were
part
of
his
principal
residence.
In
January
1973
Flanagan
purchased
from
his
mother
a
vacant
lot
on
which
he
hoped
to
build
a
home.
The
property
was
located
in
the
Shuswap
Regional
District
of
British
Columbia
and
fronted
on
Shuswap
Lake,
which
was
a
source
of
fresh
water
supply.
Mr.
Flanagan
was
denied
a
building
permit
for
his
home
by
the
municipal
authorities.
He
was
informed
Shuswap
Lake
had
a
high
water
mark
that
would
preclude
construction
and
septic
system
approval;
a
permanent
structure
could
not
be
built
on
the
lot
unless
additional
land
was
acquired
for
a
septic
system
connected
to
the
lakefront
property
in
perpetuity.
He
also
was
informed
by
the
municipal
authorities
that
without
a
septic
system
no
utility
could
be
connected
to
the
property.
Flanagan
attempted
to
acquire
an
easement
for
the
septic
system
from
an
owner
of
neighbouring
land
but
the
owner
refused
since
she
had
"other
plans”
for
her
property.
Eventually
she
sold
the
property
to
a
developer.
The
developer
also
refused
to
grant
Flanagan
an
easement
but
in
1975
entered
into
an
agreement
with
Flanagan
for
the
sale
of
a
lot.
In
1978
Flanagan
acquired
this
second
property.
The
second
property
was
across
a
public
road
from
the
property
he
acquired
from
his
mother
(“first
property").
Flanagan
caused
an
easement
in
perpetuity
to
be
placed
on
the
second
property
in
favour
of
the
first
property;
a
pipe
ran
beneath
the
road
between
the
two
properties.
In
the
meantime
Flanagan
wanted
to
put
the
property
he
acquired
from
his
mother
to
the
use
intended.
He
purchased
a
14-foot
camper
trailer
in
September
1973.
The
trailer
contained
a
sink,
stove,
cupboards,
bed
and
a
portable
toilet.
He
would
drive
the
trailer
to
the
property
on
weekends,
when
he
had
time
off
from
work
and
when
on
vacation.
He
would
live
in
the
trailer
during
these
times.
At
the
end
of
a
stay
on
the
property
he
would
drive
the
trailer
to
his
parents’
home
in
Surrey
where
he
would
leave
it
when
not
in
use
and
return
to
his
rented
apartment
in
Vancouver.
The
trailer
was
not
left
on
the
property
for
fear
of
vandalism.
The
trailer
was
used
on
the
property
during
1973
and
1974.
Also,
in
1973
Flanagan
purchased
a
van
which
also
contained
a
trailer
hitch.
The
van
contained
a
bed,
sink,
cupboards,
stove,
toilet
and
lighting.
Electrical
power
was
available
by
means
of
an
extension
cord
from
a
neighbour's
property.
A
second
van
was
acquired
in
1978.
The
vans,
like
the
trailer,
were
used
by
the
appellant
on
the
property
as
a
place
in
which
to
sleep,
eat
and
spend
time,
in
short,
to
live.
When
he
was
away
from
the
property
Flanagan
would
leave
the
van
parked
near
his
apartment
in
Vancouver.
The
evidence
indicates
that
in
1982
Flanagan
made
use
of
the
second
van
on
the
first
property.
Flanagan
stated
he
never
spent
any
spare
time
other
than
on
the
first
property.
All
his
vacations
were
spent
on
the
property
during
the
time
he
owned
it;
during
this
time,
he
explained,
he
continued
attempts
to
obtain
a
building
permit.
He
improved
the
property
by
raising
it
by
three
feet
to
prevent
flooding.
He
also
testified
that
he
used
the
trailer,
vans
and
tent
only
on
the
property.
He
did
not,
for
example,
make
use
of
the
trailer
or
vans
when
they
were
left
parked
in
Surrey
or
Vancouver.
When
he
left
his
residence
in
Vancouver
for
the
property
he
would
take
most
of
his
clothing
with
him.
He
explained
that
during
the
time
he
owned
the
property
his
lifestyle
did
not
require
too
much
in
the
way
of
clothing
and
luxuries.
During
the
time
he
owned
the
property
he
would
also
occasionally
put
a
tent
on
the
property
for
shelter.
On
leaving
the
property
he
would
take
down
the
tent
except
if
he
intended
to
return
within
a
week.
During
1976,
Flanagan
lived
on
the
first
property
continuously
from
June
to
September;
in
any
other
year
he
estimates
he
spent
at
least
30
days
a
year
on
the
property.
In
1982,
a
business
Flanagan
started
was
beginning
to
make
demands
on
his
time
which
affected
his
lifestyle.
He
decided
to
sell
the
properties.
The
first
property
was
sold
in
1982
and
the
second
in
1983.
In
filing
his
income
tax
returns
for
those
years
he
claimed
the
properties
as
principal
residence
and
thus
did
not
include
any
part
of
the
capital
gain
in
income.
The
respondent
denied
the
claims
on
the
basis
there
was
no
housing
unit
that
was
ordinarily
inhabited
by
the
appellant
on
either
of
the
two
properties.
Both
parties
rely
on
paragraph
54(g)
of
the
Income
Tax
Act
(“Act”)
which
reads
as
follows:
.
.
."principal
residence"
of
a
taxpayer
for
a
taxation
year
means
a
housing
unit,
(i)
ordinarily
inhabited
in
the
year
by
the
taxpayer.
.
.
except
that
.
.
.
in
no
case
shall
any
such
housing
unit
.
.
.
be
considered
to
be
a
taxpayer's
principal
residence
for
a
year
(iii)
unless
it
has
been
designated
by
him
in
prescribed
form
and
manner
to
be
his
principal
residence
for
that
year
and
no
other
such
housing
unit
.
.
.
has
been
so
designated
for
that
year
by
him
.
.
.
and
for
the
purposes
of
this
paragraph
the
"principal
residence”
of
a
taxpayer
for
a
taxation
year
shall
be
deemed
to
include
.
.
.
the
land
subjacent
to
the
housing
unit
and
such
portion
of
any
immediately
contiguous
land
as
may
reasonably
be
regarded
as
contributing
to
the
taxpayer's
use
and
enjoyment
of
the
housing
unit
as
a
residence.
.
.
.
The
relevant
times
to
consider
when
determining
principal
residence
are
1982
and
1983,
the
taxation
years
in
which
the
respective
properties
were
sold.
The
original
position
taken
by
the
respondent
in
disallowing
the
appellant's
claim
was
that
a
"housing
unit”
does
not
include
a
trailer,
van
or
tent.
He
relied
on
the
English
line
of
cases,
the
most
recent
of
which
is
Makins
v.
Elson
(Inspector
of
Taxes),
[1977]
1
All
E.R.
572.
In
that
appeal
the
taxpayer
purchased
land
in
1970
for
the
purpose
of
building
a
"dwelling
house";
he
had
received
permission
to
build
the
home.
A
month
after
the
purchase
he
moved
to
the
property
with
a
caravan
and
lived
there
with
his
family.
He
started
to
build
a
home
but
very
little
work
was
in
fact
done.
While
he
lived
on
the
property,
water,
telephone
and
electricity,
which
had
been
installed
on
the
site,
were
connected
to
the
caravan.
The
wheels
had
been
taken
off
the
caravan;
it
was
jacked
up
and
resting
on
bricks.
In
1973
the
taxpayer
sold
the
caravan
and
property.
The
issue
was
whether
the
gains
arising
from
the
sale
were
exempt
from
capital
gains
tax
on
the
ground
the
caravan
was
a
chattel
separate
from
the
land
and
that
the
land
did
not
constitute
a
dwelling-house
or
part
of
a
dwelling-house
within
the
meaning
of
paragraph
29(1)(a)
of
the
Finance
Act,
1965
which
was
the
taxpayer's
only
or
main
residence.
The
Court,
Chancery
Division,
took
into
account
the
installation
of
the
telephone,
electricity
and
water
system,
and
the
fact
that
the
wheels
of
the
caravan
were
not
on
the
ground
and
found
the
caravan
to
be
a
"dwellinghouse".
A
"caravan"
is
defined
by
the
Shorter
Oxford
English
Dictionary
on
Historical
Principles
as
“a
covered
carriage
or
cart
(now
gen.
superseded
by
van
.
.
.);
a
house
on
wheels
..."
In
the
French
language
text
of
54(g)
of
the
Act
the
words
"housing
unit”
read
"logement",
and
“subjacent”
reads
"sous-jacent".
The
words
"housing
unit"are
not
defined
in
any
dictionary
available
to
me.
The
Oxford
English
Dictionary,
Second
Edition,
(Oxford)
defines
"housing"
as
".
.
.a
shelter
of
a
house,
or
such
as
that
of
a
house;
house
accommodation;
lodging.
.
.
.
A
house
or
building.
.
."
Le
Grand
Robert
de
la
langue
française,
deuxième
édition
(Robert)
defines
"logement"
as
“Local
à
usage
d’habitation,
et,
plus
spécial,
Partie
de
maison,
d'immeuble
ou
l'on
réside
habituellement.
.
.
In
Field
Place
Caravan
Park
Ltd.
v.
Harding,
[1966]
3
All
E.R.
247
Lord
Denning
M.R.
stated,
on
page
251:
In
parting
with
the
case
I
would
say
that
these
caravans
with
their
pitches
are
very
like
small
bungalows
with
their
gardens.
Just
as
a
small
bungalow
is
rateable,
so
also
is
a
residential
caravan.
A
"housing
unit”
need
not
be
a
building.
A
house
provides
shelter
to
people
who
reside
in
it,
and
a
building
is
not
the
sole
means
of
shelter.
A
van
and
trailer,
suitably
equipped,
are
capable
of
providing
the
same
type
of
shelter
and
comfort
as
a
traditional
house.
Today
one
finds
more
than
a
few
people
residing
in
vans
and
trailers
while
some
trailers,
like
the
caravan
in
Makins
v.
Elson,
supra,
may
rest
on
bricks
and
be
supplied
with
services.
Others
may
be
mobile
taking
advantage
of
the
very
nature
of
the
beast
for
travel.
In
either
event
the
van
or
trailer
easily
may
serve
as
a
housing
unit:
it
is
a
question
of
fact
whether
the
van
or
trailer
at
any
time
is
a
housing
unit.
I
do
not
find
the
lack
of
services
to
the
appellant's
van
and
trailer
fatal
to
his
appeal;
there
are,
unfortunately,
many
buildings
used
as
homes
by
Canadians
which
lack
services
normally
available
to
the
larger
community
and
the
lack
of
these
services
ought
not
to
colour
the
very
character
of
the
building
used
as
their
housing
unit.
Similarly
lack
of
services
to
a
van
or
trailer,
otherwise
a
housing
unit,
should
not
affect
their
character.
A
"housing
unit”
need
not,
for
the
purposes
of
paragraph
54(g),
be
a
building
or
structure.
The
respondent
has
recognized
that
a
trailer
may
be
a
housing
unit
for
the
purposes
of
paragraph
54(g)
in
its
Interpretation
Bulletin
IT-120R3,
published
on
February
16,
1984.
Paragraph
5
of
the
bulletin
states:
The
term
"housing
unit"
includes
a
house,
apartment
in
a
duplex,
or
apartment
building
or
condominium,
cottage,
mobile
home,
trailer
or
houseboat.
While
administrative
policy
and
interpretation
are
not
determinative,
they
are
entitled
to
weight
and
can
be
an
“important
factor"
in
case
of
doubt
about
the
meaning
of
legislation:
re
de
Grandpre,
J.
in
Hare/
v.
Deputy
Minister
of
Revenue
of
the
Province
of
Quebec,
[1978]
1
S.C.R.
851;
[1977]
C.T.C.
441;
77
D.T.C.
5438
at
page
859,
Nowegijick
v.
The
Queen
et
al,
[1983]
1
S.C.R.
29;
[1983]
C.T.C.
20;
83
D.T.C.
5041
at
page
37
per
Dickson,
J.
(as
he
then
was).
Counsel
for
the
respondent
submitted
that
if
a
mobile
home,
van
or
trailer
may
be
a
“housing
unit"
and
thus
a
principal
residence
for
the
purposes
of
paragraph
54(g),
it
is
only
the
mobile
home
or
trailer
itself
that
is
the
principal
residence
and
not
any
land.
The
mobility
of
the
mobile
home,
van
or
trailer
suggests
that
many
different
lots,
even
roads
in
which
they
travel,
may
be
subjacent
to
such
a
housing
unit
at
any
particular
time.
This
submission,
in
my
view,
ignores
part
of
the
statutory
provision,
paragraph
54(g),
which
provides
that
"'principal
residence'.
.
.
shall
be
claimed
to
include.
.
.the
land
subjacent
to
the
housing
unit
and
such
portion
of
any
immediately
contiguous
land
as
may
be
regarded
as
contributing
to
the
taxpayer's
use
and
enjoyment
of
the
housing
unit
as
a
residence.
.
.".
"Subjacent"
is
defined
by
Oxford
as
".
.
.situated
underneath
or
below;
underlying."
"Sous-jacent"
is
defined
by
Robert
as
.
.Qui
s'étend,
qui
est
situé
au-dessous.
.
.".
It
is
quite
obvious
that
a
van,
trailer
and
tent
must
rest
on
something.
Mr.
Flanagan's
van
and
trailer,
as
well
as
his
tent,
rested
on
the
land
he
acquired
from
his
mother;
this
land
was
situated
underneath
or
below
the
van
and
trailer,
as
well
as
the
tent,
and
in
the
normal
sense
of
the
word
was
subjacent
to
the
housing
unit
used
by
Mr.
Flanagan
during
his
ownership
of
the
first
property.
In
my
view,
the
term
“principal
residence"
in
paragraph
54(g)
includes
land
subjacent
to
a
mobile
home,
van
or
trailer
at
the
time
the
mobile
home,
van
or
trailer
is
in
use
as
a
housing
unit.
Hence
where
any
of
a
mobile
home,
van
or
trailer
is
a
housing
unit
ordinarily
inhabited
by
the
taxpayer,
the
land
subjacent
to
such
housing
unit
is
part
of
the
principal
residence
together
with
the
housing
unit
itself.
The
land
contiguous
to
the
land
subjacent
to
the
housing
unit
is
to
be
included
as
part
of
Flanagan's
principal
residence
in
1982
if
it
may
reasonably
be
regarded
as
contributing
to
his
use
and
enjoyment
of
the
housing
unit
as
a
residence.
With
respect
to
the
property
he
acquired
from
his
mother,
the
land
contributed
to
his
use
and
enjoyment
of
the
trailer,
vans
and
tent.
He
did
not
spend
all
his
time
inside
the
van,
the
housing
unit,
in
1982.
The
purpose
in
acquiring
the
land
was
because
of
its
lake
frontage
and
surroundings.
The
first
property
was
part
of
Flanagan's
“principal
residence"
in
1982
within
the
meaning
of
paragraph
54(g)
if
it
was
“ordinarily
inhabited”
by
him
in
1982.
The
courts
have
discussed
on
several
occasions
the
meaning
of
the
expression
"ordinarily
resident",
as
that
expression
was
used
in
subsection
139(4)
of
the
Act,
as
it
read
prior
to
1972.
In
Thomson
v.
M.N.R.,
[1946]
S.C.R.
209;
[1946]
C.T.C.
51;
2
D.T.C.
812
the
Supreme
Court
of
Canada
found
there
was
nothing
of
a
casual
or
non-permanent
character
about
the
taxpayer's
residence
in
New
Brunswick
even
though
he
lived
there,
during
the
years
in
appeal,
from
May
to
October,
less
than
183
days
in
each
year.
He
resided
the
rest
of
year
in
the
United
States.
Rand,
J.
on
page
64
(D.T.C.
815)
stated
that:
The
expression
“ordinarily
resident"
carries
a
restricted
signification,
and
although
the
first
impression
seems
to
be
that
of
preponderance
in
time,
the
decisions
on
the
English
Act
reject
that
view.
It
is
held
to
mean
residence
in
the
course
of
the
customary
mode
of
life
of
the
person
concerned,
and
it
is
contrasted
with
special
or
occasional
or
casual
residence.
The
general
mode
of
life
is,
therefore,
relevant
to
a
question
of
its
application.
Kellock,
J.
at
pages
67
and
68
(D.T.C.
819
and
820),
stated
as
follows:
"Ordinarily"
is
defined
as
“in
conformity
with
rule
or
established
custom
or
practice,”
“as
a
matter
of
regular
practice
or
occurrence,”
“in
the
ordinary
or
usual
course
of
events,"
“usually,”
"commonly,"
“as
is
normal
or
usual.”
"Sojourn"
in
clause
(b)
is
to
be
contrasted
with
"resident"
in
clause
(a).
A
mere
sojourn
is
not
within
the
section
unless
the
sojourn
continues
beyond
the
stated
period.
In
my
opinion,
the
appellant
is
not
to
be
described
as
a
sojourner
in
respect
of
the
years
in
question
but
as
a
person
residing
in
Canada
within
the
meaning
of
clause
(a).
There
is
not
the
slightest
difference
between
his
use
of
his
Canadian
home
and
that
of
either
of
his
two
American
homes.
All
three
establishments
are
essentially
of
the
same
nature
and
are
equally
regarded
by
him
as
"homes"
in
the
same
sense.
The
appellant's
residence
in
each
is
in
the
ordinary
and
habitual
course
of
his
life
and
there
is
no
difference
in
the
quality
of
his
occupation
in
any
one
of
them,
although
he
may
and
does
occupy
each
at
different
periods
of
the
year.
The
word
“ordinarily”
does
not,
therefore,
restrict
a
person
to
having
residence
in
one
country;
a
person
may
ordinarily
inhabit
more
than
one
housing
unit
in
a
year
if
he
does
so
in
the
course
of
the
customary
mode
of
his
life:
this
too
is
a
question
of
fact.
The
respondent
agrees
that
a
seasonal
residence
may
be
a
taxpayer's
principal
residence.
Paragraph
9
of
the
respondent's
Interpretation
Bulletin
IT-120R3
reads
as
follows:
The
question
of
whether
a
residence
was
"ordinarily
inhabited”
during
a
taxation
year
by
a
taxpayer,
the
taxpayer's
spouse
or
former
spouse,
or
a
child
of
the
taxpayer
must
be
resolved
on
the
facts
in
each
particular
case.
Where
the
residence
has
been
occupied
by
such
a
person
for
only
a
short
period
of
time
during
a
taxation
year
(such
as
a
seasonal
residence
occupied
during
a
taxpayer's
vacation
or
a
house
which
was
sold
early
or
bought
late
in
a
taxation
year),
it
is
the
Department's
view
that
the
taxpayer
“ordinarily
inhabited"
that
residence
in
the
year,
provided
that
the
principal
reason
for
owning
the
property
was
not
for
the
purpose
of
gaining
or
producing
income
therefrom.
In
circumstances
where
a
taxpayer
receives
incidental
rental
income
from
a
seasonal
residence,
such
property
is
not
considered
to
be
owned
for
the
purpose
of
gaining
or
producing
income
therefrom.
Mr.
Flanagan
testified
that
in
the
normal
course
of
living
he
spent
all
his
free
time
at
the
first
property.
He
did
not
visit
the
property
only
occasionally
or
use
it
for
purposes
other
than
ordinary
habitation:
see
Shlien
v.
M.N.R.,
[1988]
1
C.T.C.
2244;
88
D.T.C.
1152
at
page
2247
(D.T.C.
1154).
The
use
of
the
vans,
trailer
and
tent,
as
well
as
the
lot
he
acquired
from
his
mother
was
part
of
his
lifestyle
in
1982
prior
to
selling
the
property
in
that
year.
Cross-
examination
did
not
indicate
that
in
1982,
up
to
the
time
of
the
sale
of
the
property,
Flanagan
used
the
property
any
differently
than
in
past
years.
In
1982,
and
prior
years,
the
property
was
“ordinarily
inhabited”
by
Mr.
Flanagan.
Finally
we
arrive
at
the
land
Mr.
Flanagan
acquired
in
1975,
sometimes
referred
to
as
the
second
property,
and
sold
in
1983.
Prior
to
1983
the
land
comprising
this
property
was
not
contiguous
to
the
land
comprising
the
first
property
which
was
subjacent
to
the
housing
unit.
The
two
properties
were
separated
by
a
roadway
and
were
not
touching.
Underground
piping
under
the
road
connecting
the
two
properties
does
not
make
the
properties
contiguous.
Also
in
1983
the
first
property
was
not
part
of
Mr.
Flanagan's
principal
residence
since
he
no
longer
owned
it.
In
any
event
at
no
time
in
1983
was
a
housing
unit
owned
by
the
appellant
resting
on
the
second
property.
The
second
property
was
not
part
of
Flanagan’s
principal
residence
in
1983.
The
appeal
for
1982
will
be
allowed
with
costs,
if
any;
the
appeal
for
1983
will
be
dismissed.
Appeals
allowed
in
part.