Bastin,
DJ:—This
is
an
appeal
by
the
Minister
from
a
decision
of
the
Tax
Review
Board
holding
that
the
defendant
was
entitled
to
capital
cost
allowance
with
respect
to
10
Caterpillar
tractors.
I
have
reached
the
same
conclusion
as
the
Tax
Review
Board
but
for
different
reasons.
The
defendant
corporation
was
engaged
principally
in
pipe
line
construction
and
in
October
1971
entered
into
negotiations
with
R
Angus
Alberta
Limited,
a
Calgary
dealer
in
the
products
of
the
Caterpillar
Tractor
Company
of
Peoria,
Illinois,
for
the
purchase
of
10
new
D8
Caterpillar
tractors.
These
negotiations
were
completed
by
the
execution
by
the
defendant
of
conditional
sales
agreements
covering
the
tractors
on
December
29,
1971
and
the
payment
of
$100,000
and
the
execution
of
10
promissory
notes
for
the
balance
of
the
purchase
price
on
December
20,
1971.
On
that
date
all
the
tractors
were
complete
and
in
the
premises
of
the
Caterpillar
Company
at
Peoria,
Illinois.
The
evidence
is
that
on
December
30,
1971
the
10
completed
tractors
were
held
in
storage
by
the
manufacturer
for
its
dealer,
R
Angus
Alberta
Limited.
On
the
completion
of
the
sale
the
Caterpillar
Tractor
Company
became
the
bailee
for
the
defendant
with
instructions
to
ship
the
tractors,
as
soon
as
transportation
could
be
arranged,
to
R
Angus
Alberta
Limited
in
Calgary.
R
Angus
Alberta
Limited
had
agreed
at
the
time
of
sale
to
store
the
tractors
for
the
buyer
without
charge.
The
defendant
was
to
take
delivery
of
them
when
convenient.
In
my
opinion
on
the
completion
of
the
sale
on
December
30,
1971
the
defendant
gained
constructive
possession
of
the
10
tractors.
The
clause
in
the
conditional
sales
agreements
obliging
the
buyer
to
insure
the
tractors
against
such
risks
as
the
vendor
specified
is
evidence
that
the
risk
had
passed
to
the
buyer.
Its
failure
to
insure
does
not
alter
the
legal
effect
of
this
obligation.
On
the
completion
of
the
sale
the
buyer
had
the
right
to
use
the
tractors
and
could
have
taken
delivery
of
the
tractors
at
Peoria
if
it
had
had
any
use
for
them
in
that
vicinity.
It
follows
that
all
the
incidents
of
ownership
other
than
the
legal
title
reserved
in
the
vendor
by
the
conditional
sales
agreements
such
as
possession,
risk
and
the
right
to
use
the
tractors
were
acquired
by
the
buyer
on
December
30,
1971.
In
my
opinion
the
reservation
of
the
legal
title
to
the
tractors
in
the
vendor
as
security
did
not
affect
the
issue
any
more
than
the
taking
of
security
on
the
tractors
in
the
form
of
a
chattel
mortgage
would
have
done.
This
opinion
is
supported
by
the
judgment
of
Mr
Justice
Cattanach
in
the
case
of
MNR
v
Wardean
Drilling
Limited,
[1969]
CTC
265
at
271;
69
DTC
5194
at
5198:
As
I
have
indicated
above,
it
is
my
opinion
that
a
purchaser
has
acquired
assets
of
a
class
in
Schedule
B
when
title
has
passed,
assuming
that
the
assets
exist
at
that
time,
or
when
the
purchaser
has
all
the
incidents
of
title,
such
as
possession,
use
and
risk,
although
legal
title
may
remain
in
the
vendor
as
security
for
the
purchase
price
as
is
the
commercial
practice
under
conditional
sales
agreements.
In
my
view
the
foregoing
is
the
proper
test
to
determine
the
acquisition
of
property
described
in
Schedule
B
to
the
Income
Tax
Regulations.
In
that
case
the
learned
trial
judge
decided
that
the
taxpayer
was
not
entitled
to
capital
cost
allowance
because
a
term
of
the
agreement,
reading
“Title
to
pass
and
notes
issued
as
of
date
of
shipment’,
indicated
that
the
intention
of
the
parties
was
that
the
taxpayer
would
acquire
the
property
on
the
date
of
shipment
which
was
after
the
end
of
the
taxation
year.
I
dismiss
the
action
with
costs.
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