Lamarre
Proulx,
T.C.J.:
—This
is
an
appeal
from
a
reassessment
relating
to
the
appellant's
1981
taxation
year.
The
main
issue
is
the
market
value
of
two
properties
on
December
31,
1971.
The
other
issues
concern
certain
expenses
of
sale,
professional
fees,
improvements
to
the
properties
and
property
taxes.
This
appeal
relates
specifically
to
subsection
40(1),
and
paragraphs
53(1)(h),
54(a),
54(c)
and
54(h)
of
the
Income
Tax
Act
and
subsection
26(3)
of
the
Income
Tax
Application
Rules,
1971.
Agreement
between
the
parties
A
partial
agreement
as
to
the
facts
and
issues
was
filed:
(1)
Expenses
relating
to
the
sale:
$20,700.
It
is
admitted
that
this
outlay
was
made
for
the
purpose
of
disposing
of
the
property
in
question
and
should
he
taken
into
consideration
in
calculating
the
capital
gain
or
loss
from
the
disposition
of
this
property,
in
accordance
with
subsection
40(1)
of
the
Income
Tax
Act.
(2)
Capital
improvements:
$7,821.09.
Since
1971,
the
appellant
has
made
improvements
to
the
property
in
question
in
the
amount
of
$7,821.09.
It
is
admitted
that
the
cost
of
these
improvements
must
be
capitalized
and
taken
into
consideration
in
the
adjusted
cost
base
of
this
property.
(3)
Professional
fees
(lawyer):
$31,699.73.
The
respondent
acknowledges
that
of
the
total
of
$31,699.73,
$1,663
constitutes
an
outlay
made
for
the
purpose
of
disposing
of
the
property
in
question,
in
accordance
with
subsection
40(1)
of
the
Income
Tax
Act.
With
respect
to
the
balance
of
$30,036.73,
there
is
disagreement
between
the
parties
as
to
whether
these
professional
fees
constitute
(i)
an
outlay
made
for
the
purpose
of
disposing
of
the
property
in
question,
within
the
meaning
of
subsection
40(1)
of
the
Income
Tax
Act,
or
(ii)
sums
that
must
be
added
to
the
adjusted
cost
base
of
the
property
in
question.
(4)
Professional
fees
(other):
$14,033.
The
respondent
acknowledges
that
$1,685
of
this
amount
constitutes
an
outlay
made
for
the
purpose
of
disposing
of
the
property
in
question,
in
accordance
with
subsection
40(1)
of
the
Income
Tax
Act.
There
is
disagreement
as
to
the
balance
of
$12,348.
(5)
Taxes:
$36,912.73.
There
is
disagreement
between
the
parties
as
to
whether
the
amount
of
these
taxes
may
be
added
to
the
adjusted
cost
price
of
the
property
in
question.
(6)
Disallowed
deduction
for
professional
fees:
$5,150.
In
establishing
the
reassessment
under
appeal,
the
respondent
disallowed
the
deduction
of
$5,150
that
the
appellant
had
claimed
as
professional
fees.
The
parties
agree
that
$575
should
be
allowed
as
a
deduction
in
computing
the
appellant's
income.
The
parties
agree
that
the
disallowance
of
the
balance
of
$4,575
should
be
upheld.
The
facts
The
properties
in
question
are
located
in
the
parish
of
St-Bruno,
near
Montreal.
Property
No.
1,
part
of
lot
234,
was
sold
on
or
about
April
2,
1980
for
$55,000.
The
other
property,
No.
2,
part
of
lots
232
and
233
with
buildings
thereon,
was
sold
on
or
about
June
30,
1980,
for
$210,000.
Property
No.
1
has
a
total
area
of
134,341
square
feet
and
property
No.
2
a
total
area
of
282,242
square
feet.
With
respect
to
the
market
value
on
December
31,
1971,
the
appellant
valued
property
No.
1
at
$47,015
and
property
No.
2
at
$101,955
for
the
land
and
$91,185
for
the
buildings,
for
a
total
value
of
$193,140.
The
respondent
estimated
the
fair
market
value
of
property
No.
1
at
$22,100
and
of
property
No.
2
at
$42,300
for
the
land
and
$52,700
for
the
buildings,
for
a
total
value
of
$95,000.
These
are
adjacent
properties
between
Rue
Beaumont
on
the
south,
Boulevard
des
Hirondelles
on
the
north,
Rue
Montpellier
on
the
west
and
residential
properties
on
the
east.
Both
properties
are
located
in
an
area
zoned
for
parks
and
schools.
In
January
1963
the
City
of
St-Bruno
passed
a
zoning
by-law
the
effect
of
which
was
that
properties
No.
1
and
No.
2
are
located
in
a
zone
referred
to
as
PA,
that
is,
that
the
only
permitted
uses
were
those
involving
as
their
primary
activity
recreation
and
education
under
the
aegis
of
a
public
body.
The
nonconforming
use
of
a
non-conforming
structure
continued
to
be
permitted,
for
residential
purposes
only.
According
to
the
testimony
of
Jean-Luc
Samson,
who
was
part
of
the
family
unit
that
lived
on
the
property
at
the
time,
the
family
was
quite
pleased
by
this
zoning,
because
to
them
it
meant
that
the
properties
would
eventually
be
purchased
by
public
bodies.
Because
there
were
no
offers
to
purchase,
and
in
view
of
the
increase
in
the
cost
of
living
and
the
decrease
in
the
family
unit's
income,
the
family
brought
action
in
1973
to
have
the
municipal
assessment
reduced.
In
1978,
after
the
judgments
of
two
courts,
the
Quebec
Court
of
Appeal
established
the
value
of
the
properties
for
municipal
assessment
purposes
at
$44,660
for
the
buildings,
$39,920
for
the
land
where
the
buildings
were
located
and
$1
for
the
remainder
of
the
land.
On
July
4,
1973,
expropriation
proceedings
for
land
required
for
a
street
extension
began.
The
judgment
of
the
expropriation
tribunal
was
delivered
on
June
9,
1977.
There
were
still
no
offers
from
any
public
bodies,
and
so
an
action
was
brought
under
Article
33
CCP
to
have
the
zoning
by-law
annulled.
In
1981,
the
Quebec
Court
of
Appeal
gave
judgment
(1981)
C.A.
193
dismissing
the
action
by
Jeanne
Samson
because
of
excessive
delay
in
commencing
proceedings.
I
quote
a
passage
that
is
of
interest
in
the
case
before
us,
in
which
Mr.
Justice
Turgeon
of
the
Court
of
Appeal
stated
the
following:
[Translation]
No
promises,
negotiations
or
even
discussions
for
the
use
of
the
land
by
any
government
organization
were
shown.
Testimony
of
the
appraisers
The
appellant’s
appraiser,
Mr.
Courcelles,
described
this
kind
of
property
as
being
a
restricted
property.
In
order
to
arrive
at
the
fair
market
value
of
these
properties
on
December
31,
1971,
Mr.
Courcelles
used
the
cost
method
for
the
built-up
property,
that
is,
the
buildings
were
appraised
on
the
basis
of
the
cost
of
reconstruction
or
replacement,
to
which
he
applied
a
rate
of
depreciation
to
arrive
at
a
depreciated
value.
For
the
land
he
used
the
comparative
method,
that
is,
comparison
with
transactions
in
the
vicinity
on
a
subdivision
basis.
For
the
built-up
property,
the
appraiser
stated
that
he
could
have
used
two
other
recognized
appraisal
methods,
comparative
or
income,
but
he
opted
for
the
cost
method
solely
because
he
thought
that
there
had
been
no
property
sold
in
the
vicinity
in
the
years
in
question
that
would
be
comparable
to
the
property
in
question.
Not
because
there
were
no
built-up
properties
sold
in
the
vicinity,
but
given
that
in
his
opinion
he
was
dealing
with
a
very
specific
property,
he
concluded
that
in
order
to
use
such
transactions
he
would
need
to
make
too
many
corrections
or
adjustments.
It
is
recognized
in
preparing
appraisals
that
when
too
many
adjustments
have
to
be
made
the
conclusions
reached
are
difficult
and
may
be
more
in
error.
Nonetheless,
market
value
factors
are
taken
into
account
in
the
calculation
using
the
cost
method
because
the
cost
is
weighted
according
to
a
depreciation
factor.
People
will
not
pay
as
much
for
a
10
or
15-year-old
property
as
they
will
for
a
new
property.
The
depreciation
tables
used
come
from
the
market.
According
to
market
statistics,
the
economic
life
of
a
residence
is
longer
than
that
of
secondary
buildings.
The
land:
given
that
on
December
31,
1971
the
property
was
located
in
a
PA
zone,
which
is
a
public
use
zone:
park,
public
or
semi-public
building,
the
appraiser
is
of
the
opinion
that
any
eventual
purchaser
will
be
a
public
body
and
that
the
market
value
of
the
land
will
have
to
be
determined
on
the
basis
of
the
factors
that
determine
the
purchase
price
paid
by
a
public
institution
on
an
expropriation.
The
price
will
be
determined
on
the
basis
of
the
best
and
highest
use
of
the
land,
without
taking
into
account
the
zoning
by-law.
This
use
results
primarily
from
the
type
of
development
prevailing
in
the
immediate
vicinity.
[Translation]
Given
the
presence
of
single-family
residential
development
where
the
topography
and
tree
coverage
are
comparable
to
the
subject
property,
that
is,
Rue
Montpellier
and
Rue
des
Erables,
and
we
could
also
say
Rue
Beaumont,
and
also
given
the
presence
of
an
élite
golf
course
in
the
immediate
vicinity,
we
are
of
the
opinion
that
a
residential
development
(or
subdivision)
of
the
same
type
as
those
on
Rue
Montpellier
and
Rue
des
Érables
would
be
the
best
and
highest
use
on
December
31,
1971.
On
the
south,
there
is
a
panoramic
view
of
the
golf
course,
on
the
east
the
famous
Sommet
Trinité
development
where
there
are
only
high-end
properties,
on
the
west
of
the
property
the
development
on
Rue
Montpellier,
Rue
des
Érables
and
Rue
Beaumont.
The
farther
west
you
go,
the
more
the
neighbourhood
changes,
and
you
find
areas
that
are
not
comparable.
On
the
north
of
the
property
is
Mont
St-Bruno
park.
The
appraiser
referred
me
to
a
table
of
sales
of
lots
on
Rue
Montpellier,
from
1966
to
1972.
He
told
me
on
the
basis
of
these
transactions
that
lots
on
Rue
Montpellier
were
selling
for
$0.60
per
square
foot
on
December
31,
1971.
He
appraised
the
first
150
feet
of
frontage
of
properties
No.
1
and
No.
2
on
Rue
Beaumont
at
this
value,
since
he
appraised
it
as
having
the
same
value
as
subdivided
lots.
With
respect
to
the
rear
of
the
properties,
about
550
feet
in
depth,
since
they
were
unsubdivided
lots
he
established
the
value
at
$0.30
per
square
foot,
using
the
subdivision
method
for
this
purpose.
He
told
me
that
his
appraisal
was
corroborated
by
an
expropriation
judgment
dated
June
9,
1977.
On
July
4,
1973
parts
of
lots
232,
233
and
234
were
expropriated
for
the
opening
of
Boulevard
des
Hirondelles.
The
boulevard
divided
the
original
huge
property
in
two.
The
part
on
the
north
of
Boulevard
des
Hirondelles
was
expropriated
by
the
government
of
Quebec
sometime
in
the
1980s
for
public
park
purposes.
The
part
in
issue
is
the
property
located
on
the
south
of
Boulevard
des
Hirondelles.
The
expropriation
judgment
for
properties
that
were
not
built-up
for
the
purposes
of
Boulevard
des
Hirondelles
is
of
interest,
since
it
determined
the
value
of
lots
that
are
identical
to
the
lots
presently
in
issue,
except
for
the
surface
area
involved.
The
following
passage
appears
at
page
7
of
that
judgment:
[Translation]
The
tribunal
is
of
the
opinion
that
the
expropriated
parcel
more
closely
resembles
the
land
on
Rue
Montpellier
adjoining
the
Samson
property.
However,
we
must
take
into
account
the
fact
that
the
expropriated
parcel
is
undivided,
while
the
lots
on
Rue
Montpellier
were
subdivided
and
had
municipal
services.
For
this
reason
the
tribunal
believes
that
it
is
fair
and
reasonable
to
attribute
to
the
expropriated
parcel
a
value
of
$.30
per
square
foot,
or
50%
of
the
value
of
the
subdivided
land
on
Rue
Montpellier.
The
expropriated
parcel
was
38,411
square
feet,
while
the
total
area
of
properties
No.
1
and
No.
2
is
416,583
square
feet.
The
date
of
this
expropriation
was
a
year
and
a
half
after
December
31,
1971.
On
cross-examination,
he
was
asked
why
he
assumed
a
purchase
for
public
purposes.
[Translation]
Well,
because
generally
when
you
have
a
property
that
is
zoned
PA,
the
most
likely
purchaser
is
surely
a
public
institution.
When
it
was
pointed
out
to
him
during
the
same
cross-examination
that
in
fact
in
1980
the
properties
were
sold
to
individuals,
Mr.
Courcelles
replied
that
if
they
were
not
sold
to
public
bodies
it
must
have
been
nearly
certain
that
the
zoning
would
change,
as
it
in
fact
did.
With
respect
to
the
built-up
property,
the
respondent's
appraiser
based
his
appraisal
on
comparability
with
neighbouring
properties,
and
for
the
land
he
ignored
the
expropriation
judgment
and
did
not
give
a
subdivided
value
for
the
lot.
Let
us
first
consider
the
question
of
the
lot.
I
believe
that
in
respect
of
the
lot
the
reasoning
of
the
respondent's
apparaiser
is
correct.
The
market
value
of
the
lot
in
1971
must
be
determined
on
the
basis
of
the
zoning
by-law
in
effect.
On
this
point,
see
Robert
A.
Kramer,
Hillside
Shopping
Centre
Ltd.
and
McCallum
Hill
&
Co.
Ltd.
v.
Wascana
Centre
Authority,
[1967]
S.C.R.
237,
Les
Immeubles
Cataraqui
Inc.
v.
Québec,
[1982]
C.A.
495.
In
the
first
case
cited
above,
Mr.
Justice
Abbott,
speaking
for
the
majority,
wrote
at
page
239:
The
learned
arbitrator
found
that
the
Community
Planning
Scheme
adopted
by
by-law
3506,
passed
by
the
City
Council
of
Regina
on
December
5,
1961,
represented
the
state
of
mind
of
the
city
authorities
at
that
time.
That
Planning
Scheme
was
crystallized
in
the
zoning
by-law
3618
adopted
on
December
28,
1962,
of
which
public
notice
had
been
given
some
months
before,
and
which
affected
the
whole
City
of
Regina.
The
arbitrator
held
on
the
evidence
that
this
by-law
was
an
independent
zoning
enactment,
part
of
an
overall
city
plan
and
not
part
of
the
expropriation
proceedings
—
although
passed
of
course
with
knowledge
of
the
Wascana
Centre
Scheme.
He
held
therefore
that
the
bylaw
3618,
in
limiting
the
use
of
the
land
expropriated
to
“public
service
use”,
was
a
determining
factor
in
assessing
the
amount
of
compensation.
These
findings
were
confirmed
by
the
majority
in
the
Court
of
Appeal.
The
Appellants
failed
to
satisfy
me
that
they
are
wrong
and
I
would
therefore
dispose
of
the
appeal
as
proposed
by
my
brother
Spence.
In
Les
Immeubles
Cataraqui
Inc.,
Mr.
Justice
Dubé
stated,
at
pages
496
and
497:
[Translation]
I
propose
to
deal
with
grounds
for
appeal
(a)
and
(c)
together,
because
in
effect
one
depends
on
the
other:
the
expropriation
tribunal
refused
to
grant
the
appel-
lant
the
subdivided
value
precisely
because
the
property
in
question
was
"encumbered"
by
the
designation
as
an
historic
area
before
the
appellant
purchased
it.
The
appellant
argues
that
the
mere
designation
of
a
property
as
historic
at
the
time
of
the
purchase
does
not
prevent
the
subdivision
of
the
property
in
question
:
according
to
the
appellant,
this
designation
simply
imposes
an
obligation
to
obtain
the
approval
of
the
minister
prior
to
undertaking
construction
projects
but,
the
appellant
argues,
the
minister
was
not
entitled
to
refuse
subdivision.
It
seems
to
me
that
according
to
this
by-law
it
is
clear
that
the
minister
was
entitled
to
refuse
to
permit
purchasers
of
the
Cataraqui
estate
to
subdivide
it.
.
.
.
accordingly,
I
believe
that
the
Expropriation
Tribunal
was
justified
in
not
granting
a
subdivided
value
for
the
Cataraqui
estate
but
rather
in
considering
it
as
what
it
has
always
been,
a
huge
lot
used
for
residential
purposes;
.
.
.
.
The
property
in
question
could
not
have
been
subdivided
for
residential
subdivision
purposes
and
accordingly
the
value
of
the
lot
must
not
be
calculated
on
that
basis.
An
eventual
purchaser
could
only
have
continued
the
nonconforming
use
of
the
prior
owner.
Even
if
the
purchaser
had
been
a
public
institution,
the
judgment
of
the
Court
of
Appeal
in
Les
Immeubles
Cataraqui
Inc.
indicates
to
me
that
the
land
would
also
have
been
appraised
on
this
basis.
In
any
event,
the
evidence
showed
very
clearly
that
on
December
31,
1971
there
were
no
discussions
for
sale
to
public
institutions.
Even
in
1978,
there
had
still
not
been
any
offer
to
purchase
from
public
institutions,
if
we
refer
to
the
judgment
of
the
Quebec
Court
of
Appeal,
cited
above,
concerning
the
municipal
assessment.
What
is
the
probative
value
of
the
expropriation
judgment?
An
expropriation
judgment
may
be
considered
by
the
Court
and
in
my
opinion
the
position
adopted
by
Mr.
Justice
Gillis
in
Dickson
v.
Nova
Scotia
(1971),
5
N.S.R.
(2d)
89;
3
L.C.R.
169,
clearly
expresses
the
weight
that
the
Court
may
give
to
it:
The
preferable
proposition,
in
my
view,
is
that
the
evidence
of
settlements
subsequent
to
expropriation
of
neighbouring
properties,
is
admissible
and
relevant
with
the
weight
of
such
evidence
depending
upon
the
surrounding
circumstances.
On
this
point,
I
would
refer
to
The
Law
of
Expropriation
and
Compensation
in
Canada,
Eric
C.E.
Todd
(1976),
page
161,
in
the
chapter
entitled
"Settlements
and
Awards".
I
do
not
believe
in
the
circumstances
that
the
expropriation
judgment
was
representative
of
the
fair
market
value
of
the
property.
It
was
not
a
sale
by
mutual
agreement
and
the
expropriated
parcel
was
relatively
small,
38,411
square
feet,
while
the
total
area
is
416,583
square
feet.
With
respect
to
the
built-up
property,
I
also
do
not
believe
that
it
can
be
said
that
there
were
no
comparable
houses
in
the
vicinity.
The
house
was
nice,
but
it
was
a
single-family
home
of
normal
size.
Other
nice
houses
in
the
immediate
vicinity
had
been
sold.
I
believe
the
testimony
of
the
respondent's
appraiser
on
this
point.
I
accept
his
appraisal
of
the
house,
and
following
the
principles
set
out
in
the
two
cases
cited
above,
I
also
accept
his
appraisal
of
the
land.
I
believe
that
the
premises
on
which
the
appellant's
appraiser
based
his
opinion
were
incorrect,
that
is,
that
there
were
no
comparable
houses
in
the
vicinity
and
that
the
lot
had
to
be
appraised
according
to
the
principle
of
subdivision.
I
believe
that
there
were
comparable
houses
in
the
vicinity
and
that
the
lot
could
not
be
appraised
on
the
basis
of
subdivision,
in
view
of
the
existing
zoning
by-law.
The
other
questions
to
be
determined
for
the
purposes
of
the
appeal
concern
property
taxes
and
professional
fees.
Property
taxes
With
respect
to
the
inclusion
of
property
taxes
in
the
adjusted
cost
base
of
the
properties
under
paragraph
53(1)(h)
of
the
Act,
I
agree
with
the
reasoning
of
my
colleague
Judge
Bonner
in
Horst
Bauerle
v.
M.N.R.,
[1986]
1
C.T.C.
2175;
86
D.T.C.
1131.
Property
taxes
may
be
included
in
calculating
the
adjusted
cost
base
to
the
extent
that
they
were
not
deductible
under
subsection
18(2)
in
computing
income
from
land
or
a
business.
The
evidence
indicated
that
the
properties
in
question
were
not
a
source
of
income
from
land
or
a
business
for
the
appellant
and
they
were
therefore
not
subject
to
the
restriction
relating
to
certain
property
taxes
under
subsection
18(2)
of
the
Act.
Accordingly,
the
property
taxes
cannot
be
included
in
calculating
the
adjusted
cost
base
of
the
properties
in
question.
Professional
fees
The
professional
fees
for
contesting
the
municipal
assessment
and
for
the
action
to
cancel
the
zoning
are
claimed
either
under
section
53
as
part
of
the
adjusted
cost
base
or
under
paragraph
40(1)(a)
as
expenses
or
outlays
that
may
be
added
to
the
adjusted
cost
base.
Counsel
for
the
appellant
argued
that
the
present
paragraph
53(1)(n)
simply
entrenched
a
pre-existing
accounting
principle
in
the
Act
in
1985,
and
that
the
reasonable
expenses
incurred
by
the
taxpayer
in
having
the
property
appraised
and
in
disposing
of
it
must
be
considered
in
calculating
the
adjusted
cost
base.
She
argued
that
the
expenses
in
question
were
incurred
for
the
appraisal
of
the
properties.
I
do
not
believe
that
all
the
professional
fees
in
question
in
the
present
case
are
expenses
related
to
the
appraisal
within
the
meaning
of
the
present
paragraph
53(1)(n),
but
in
any
event
this
paragraph
did
not
exist
in
1981
and
because
she
could
refer
me
to
no
cases
or
interpretation
bulletins
that
would
corroborate
her
interpretation,
I
do
not
accept
the
argument
that
these
fees
may
be
included
in
calculating
the
adjusted
cost
base
using
this
reasoning.
In
respect
of
including
these
fees
in
the
adjusted
cost
base
under
subparagraph
40(1)(a)(i),
which
reads
as
follows:
.
.
.
any
outlays
and
expenses
to
the
extent
that
they
were
made
or
incurred
by
him
[the
taxpayer]
for
the
purpose
of
making
the
disposition
.
.
.
While
the
evidence
is
somewhat
confused
on
this
point,
it
would
seem
that
the
professional
fees
in
issue
were
incurred
either
in
order
to
contest
the
municipal
assessment
or
for
the
action
to
cancel
the
municipal
by-law.
What
was
the
purpose
of
contesting
the
municipal
assessment
and
of
the
action
to
cancel
the
zoning
by-law?
On
this
point
I
quote
the
testimony
of
Jean-Luc
Samson:
[Translation]
A.
In
'73
we
asked
the
Board
of
Revision
to
change
the
assessment.
This
was
refused,
and
we
went
to
Superior
Court,
and
it
was
refused;
and
in
'78
we
obtained
a
favourable
judgment
from
the
Court
of
Appeal
on
the
assessment.
You
have
to
understand
.
.
.
Q.
And
so
you
started
to
contest
it
in
1973.
A.
Yes.
According
to
my
notes,
but
they
refer
to
documents
that
.
.
.
Q.
Could
you
tell
us
why
you
first
contested
it?
A.
It
was
quite
simple:
since
'63
we
were
zoned
PA;
when
that
happened
no
one
reacted,
that
is:
Well,
listen
.
.
.
we
knew
that
we
could
not
live
there
forever
after,
that's
obvious,
that
it
cost
a
lot
to
live
there
and
maintain
it,
nor
did
we
consider
abandoning
it,
so
we
had
to
sell
it.
You
will
remember
that
the
Estate
had
been
in
existence
since
’61.
In
'63
there
was
a
zoning
change;
Perfect,
the
government
will
buy
it,
and
then
.
.
.
nothing
happened.
The
years
went
by.
By
'73
we
said:
“It
doesn't
make
sense
to
be
paying
taxes
on
it!"
And
then
we
were
still
waiting
for
the
government
to
make
us
an
offer
or
approach
us.
And
so
to
save
money,
strictly
for
that,
we
said,
"Well,
at
least
if
we
were
paying
less
tax
we
might
be
able
to
last
a
little
longer."
It
was
done
from
that
point
of
view,
there
was
nothing
else.
Q.
Could
you
recall
for
us
the
result
of
this
dispute?
I
would
advise
the
Court
that
the
judgment
of
the
Court
of
Appeal
has
been
filed
as
Exhibit
1-3.
R.
Well,
there
are
perhaps
two
things
in
that
judgment
that
I
would
like
to
bring
to
the
attention
of
the
Court.
First,
is
that
it
in
no
way
judges
the
market
value
of
the
land,
but
we
were
arguing
much
more
on
the
fairness
of
things,
that
is,
that
we
could
not
dispose
of
the
land
and
that,
on
the
other
hand,
the
municipality
that
had
created
the
zoning
was
pocketing
money.
The
judgment
is
much
more
against
that
at
that
point
and
that
is
why
there
was
a
change
in
the
assessment.
But
on
the
other
hand
there
was
a
very
important
element
in
that,
which
is
that
we
were
told
that
the
zoning
by-law
could
be
disputed
in
court,
and
that
we
would
have
.
.
.
we
were
given
to
understand
that
we
would
have
a
chance
of
success.
So
at
that
point
we
said:
"Listen
a
minute,
this
judgment
was
in
'78,
the
zoning
has
existed
for
fifteen
years
already”,
and
we
said:
“Listen,
it
seems
that
they're
telling
us
that
we
should
perhaps
.
.
.
and
at
that
point
if
we
can
change
the
zoning
we
will
be
able
to
dispose
of
it.”
And
so
it
was
at
that
point
that
we
started
proceedings
and
said:
"We're
going
to
change
the
zoning.”
The
Superior
Court
told
us
in
'78:
"You
waited
too
long!"
That
turned
things
around.
With
respect
to
the
professional
fees
incurred
in
disputing
the
zoning
bylaw,
counsel
for
the
respondent
argued
that
the
relevant
portion
of
subparagraph
40(1)(a)(i),
.
.
.
any
outlays
and
expenses
to
the
extent
that
they
were
made
or
incurred
by
him
for
the
purpose
of
making
the
disposition
.
.
.
clearly
shows
that
it
is
referring
to
a
disposition
that
has
taken
place.
He
emphasized
the
use
of
the
definite
article
"the"
before
the
word
“disposition”
and
argued
that
there
must
be
some
connection
or
relationship
between
the
expenses
and
the
disposition.
This
latter
aspect
appears
to
me
to
be
the
most
valid.
I
would
refer
also
to
the
decision
of
the
Federal
Court
of
Appeal
in
The
Queen
v.
Geoffrey
Stirling,
[1985]
1
C.T.C.
275
;
85
D.T.C.
5199,
in
which
Mr.
Justice
Pratte
stated,
at
page
276
(D.T.C.
5200):
.
.
I
any
expense
that
he
may
have
incurred
in
order
to
put
himself
in
a
position
to
pay
that
price
or
to
keep
the
property
afterwards.
The
expense
relating
to
the
action
to
cancel
the
zoning
by-law
is
not
related
to
maintaining
the
property
or
financing
the
purchase
price.
In
my
view,
it
is
an
expense
which,
in
certain
circumstances,
depending
on
the
evidence,
may
be
considered
to
be
incurred
for
the
disposition
of
a
property.
In
this
case,
according
to
the
evidence
that
I
have
heard,
this
was
the
purpose
of
the
dispute.
Since
the
public
authorities
were
not
buying,
it
was
hoped
to
change
the
zoning
so
as
to
be
able
to
dispose
of
it
more
easily
to
individuals.
I
am
therefore
of
the
opinion
that
the
professional
fees
related
to
the
zoning
dispute
fall
within
the
terms
of
subparagraph
40(1)a)(i).
My
conclusion
is
not
the
same
with
respect
to
the
professional
fees
relating
to
the
dispute
of
the
municipal
assessment.
This
was
an
expense
related
to
the
maintenance
of
the
property
which
does
not
fall
within
the
terms
of
subparagraph
40(1)(a)(i).
The
appeal
is
allowed
without
costs
and
the
assessment
is
referred
back
to
the
Minister
for
reconsideration
and
reassessment
in
accordance
with
the
admissions
and
the
foregoing
reasons.
Appeal
allowed
in
part.
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