Muldoon,
J:—This
is
an
action
in
appeal
from
the
decision
of
the
Tax
Review
Board
dated
May
27,
1983,
dismissing
the
plaintiffs
appeal
from
the
notice
of
assessment
dated
June
23,
1980,
in
regard
to
the
plaintiffs
1975
taxation
year.
At
all
material
times
the
plaintiff
carried
on
a
motel
business
on
land
in
Jasper
National
Park
occupied
under
the
terms
of
a
written
licence
agreement
regarding
that
land,
which
licence
expired
on
June
30,
1972.
The
licensee,
in
1962,
(when
the
licence
agreement
was
executed),
was
an
Albertan
corporation,
Resorts
Limited;
however,
by
a
number
of
permitted
assignments
the
licence
became
one
between
the
plaintiff
and
Her
Majesty
the
Queen.
The
text
of
the
licence
agreement
is
set
out
in
Exhibit
1.
On
the
expiry
of
the
written
terms
of
the
licence
to
occupy
the
lands,
the
plaintiff
continued
in
occupation
thereof
and
continued
to
carry
on
its
business
there
and
to
make
licence
payments
to
the
defendant.
The
provisions
of
that
licence
agreement
(Ex
1),
which
expired
on
June
30,
1972,
include
the
following
covenant:
1.
The
permission
herein
granted
operates
solely
as
a
licence
and
does
not
transfer
any
exclusive
possessory
right
or
leasehold
interests
to
the
licensee.
On
September
13,
1973,
the
plaintiff
entered
into
an
agreement
with
Kolstar
Developments
Ltd
to
sell
to
the
latter
all
of
the
plaintiff’s
interest
in
the
said
land
and
the
buildings,
contents,
including
improvements
to
permanent
fixtures
on
the
land
known
as
Tekarra
Lodge,
and
goodwill,
for
a
purchase
price
of
$530,000.
A
photocopy
of
the
accepted
offer
to
purchase
is
Exhibit
2.
The
terms
of
the
agreement
speak
for
themselves,
as
both
parties
agree.
The
accepted
offer
to
purchase
expresses
the
following
particular
covenant:
2.
The
Purchaser
may,
at
its
option,
cancel
this
agreement
and
the
deposit
shall
be
repaid
to
the
Purchaser
without
deduction
if
prior
to
January
15,
1974
the
Purchaser
shall
be
unable
to
obtain
a
satisfactory
lease
from
the
Crown
for
a
term
of
forty-two
(42)
continuous
years
of
twelve
(12)
month
annual
occupancy,
at
a
rent
which
shall
be
no
greater
than
other
similar
developments
in
the
area.
One
witness,
Norman
Martin
Knebel,
was
called
by
the
plaintiff
to
testify
viva
voce.
He
was
the
president
of
the
plaintiffs
corporation.
He
testified
that
the
business
had
been
well
run
by
its
manager,
one
Harold
Winfield,
who
was
assisted
by
his
wife,
Claire
Winfield.
Mr
Knebel
was
himself
familiar
with
the
licence
arrangements,
asserting
that
there
were
never
any
problems
between
the
plaintiff
and
the
Park
Superintendent,
with
whom
an
easy
relationship
was
maintained.
The
plaintiff’s
principals,
prior
to
the
expiry
of
the
original
licence,
began
to
consider
a
substantial
expansion
and
renovation
of
the
motel
premises,
and
expected
and
planned
to
renew
the
licence
or
obtain
a
lease
for
continued
operations.
They
knew
that
after
the
expiry
of
that
licence
they
would
have
to
have
a
new
arrangement
with
the
government.
Indeed
it
was
after
the
initial
talks
concerning
renewals
that
they
decided
to
expand
and
were
never
concerned
that
their
site
and
licence
would
be
allocated
to
someone
else
because,
“the
Parks
Department
didn’t
operate
that
way’’.
The
extensions
and
renovations
of
the
facilities
would
have
cost
in
excess
of
$1
million.
Then
in
September,
1972,
Harold
Winfield
died
suddenly
and
prematurely
according
to
Mr
Knebel’s
very
credible
testimony.
Furthermore,
he
said,
about
that
time
he
himself
was
transferred
in
his
employment
from
Calgary
to
Toronto.
“We
were
more
or
less
fragmented
so,
it
was
in
our
best
interests
to
put
the
property
up
for
sale.
It
was
necessary
to
include
the
particular
clause
[since]
the
purchasers
were
going
to
invest
a
substantial
sum
of
money”,
Mr
Knebel
said.
He
was
referring
to
the
above-recited
clause,
paragraph
2.
After
the
plaintiffs
principals
signed
the
agreement,
according
to
the
witness,
the
“right”
to
continue
negotiations
with
the
Crown
devolved
upon
or
was
delegated
to
the
purchaser.
The
plaintiff
continued
to
pay
rental,
but
in
the
amount
of
$1,836
from
April
1,
1973,
on
the
basis
of
the
proposed
new
lease
which
was
then
under
discussion.
The
charge
had
been
$96
per
annum
under
the
written
licence
agreement.
The
purchaser
was
anxious
to
get
into
operation
and
the
plaintiff
realized
that
if
it
lost
its
purchaser,
it
would
have
to
hire
staff
for
the
1974
season.
Architects’
plans
were
finally
obtained
not
too
long
before
Mr
Winfield
died,
but,
Mr
Knebel
said,
talks
had
been
going
on
with
the
government
long
before
that
tragic
event,
indeed,
over
the
course
of
the
previous
year.
He
added
that
those
expansion
plans
had
not
been
provided
to
the
purchaser.
The
discussions
with
the
government
involved
a
number
of
enterprises
in
the
park,
and
not
only
the
plaintiff.
They
were
all
assured
that
there
was
no
intention,
on
the
part
of
the
superintendent
or
the
Minister,
to
create
any
hardship
for
such
enterprises
although
all
realized
that
the
licence
fees
or
rental
would
be
considerably
increased.
At
no
time
were
they
concerned
that
they
would
lose
their
place
and
all
correspondence
and
discussions
indicated
that
the
plaintiffs
principals
had
no
cause
to
worry
in
that
regard.
Mr
Knebel
said
that
at
the
request
of
the
government
the
new
lease
(Ex
3)
was
made
retroactive
to
July
1,
1972,
(the
day
following
the
expiry
of
the
plaintiffs
original
licence)
and
was
granted
nominally
to
the
plaintiff
which
would
assign
its
interest
to
the
purchaser.
He
likened
the
situation
to
that
of
a
collective
labour
agreement
which,
when
finally
settled,
is
made
retroactive
to
the
time
of
expiry
of
the
preceding
agreement.
The
plaintiff
had
no
participation
in
the
formulating
of
terms,
conditions
and
covenants
after
the
sale
to
the
purchaser.
It
was,
of
course,
actively
negotiating
with
the
superintendent
and
the
government
before
that
event.
The
new
lease
was
for
a
term
of
42
years,
to
expire
on
June
30,
2014,
and
was
between
Her
Majesty
the
Queen
and
the
plaintiff.
Although
it
was
made
retroactively
effective
as
of
July
1,
1972,
the
new
lease
was
actually
executed
on
April
1,
1974.
On
that
very
day
the
plaintiff,
by
written
assignment
(Ex
4),
assigned
all
its
right,
title,
interest
and
estate
in
the
land
and
the
lease
unto
the
purchaser.
The
stated
consideration
for
the
assignment
is
$530,000,
the
same
sum
which
is
stated
to
be
the
consideration
in
the
offer
to
purchase
(Ex
2),
because
the
assignment
is
in
the
main
merely
a
confirmation
and
completion
of
the
accepted
offer
to
purchase.
The
allocation
of
the
purchase
price
was
set
out
therein
as
follows:
(a)
$200,000
for
buildings,
(b)
$35,000
for
furniture
and
fixtures
(c)
$10,000
for
goodwill
arising
out
of
the
sale
of
the
name
Tekarra
Lodge,
and
(d)
$285,000
for
the
licence
of
occupation
granted
by
the
Government
of
Canada.
Like
all
the
other
exhibits
filed,
Exhibit
5
is
also
filed
by
agreement
of
the
parties.
It
is
as
follows:
REPLY
TO
NOTICE
OF
APPEAL
paragraph
re
eligible
capital
amounts
Goodwill
Licence/Lease
|
Gross
Proceeds
|
10,000
|
285,000
|
|
|
Selling
Cost
|
403
|
11,492
|
|
|
Net
Proceeds
|
9,597
|
273,508
|
|
|
Total
Net
Proceeds
of
Eligible
Capital
Amounts
|
273,508
|
|
9,597
|
|
283,105
|
|
Taxation
of
Eligible
Capital
Amounts
|
|
|
Eligible
Capital
Amounts
Received
or
Receivable
|
$283,105.00
|
|
Less
ITAR
21(1)
50%
|
|
141,552.50
|
|
*/
thereof
to
be
included
in
income
|
|
70,776.25
|
Both
parties
admit
that
the
computation
set
out
in
Exhibit
5
is
correct,
but
the
plaintiff
admits
that
the
calculation
is
relevant
only
in
the
event
that
the
court
holds
that
proceeds
were
received
as
a
result
of
a
disposition
of
eligible
capital
property
and
not
the
disposition
or
expiry
of
a
government
right.
From
their
most
helpful
agreed
statement,
all
of
the
facts
above-stated,
except
those
found
in
the
testimony
of
the
witness
Knebel,
are
drawn.
The
parties
also
agreed
upon
the
issues.
In
their
agreed
statement
and
in
respective
submissions
counsel
made
reference
to
the
Income
Tax
Application
Rules,
1971,
or
ITAR.
Before
setting
out
the
issues
upon
which
the
parties
have
agreed,
the
definition
of
a
“government
right”
expressed
in
the
ITAR
should
be
noted
in
its
pertinent
parts,
thus:
21.
(3)
In
this
section,
(a)
a
“government
right”
of
a
taxpayer
means
a
right
or
licence
(i)
that
enables
the
taxpayer
to
carry
on
a
business
activity
in
accordance
with
a
law
of
Canada
or
.
.
.
to
an
extent
to
which
he
would
otherwise
be
unable
to
carry
it
on
in
accordance
therewith,
(ii)
that
was
granted
or
issued
by
Her
Majesty
in
right
of
Canada
or
..
.
authorized
by
or
pursuant
to
a
law
of
Canada,
.
.
.
to
grant
or
issue
such
a
right
or
licence,
and
(ii)
that
was
acquired
by
a
taxpayer
(A)
as
a
result
of
a
transaction
occurring
before
1972,
or
(B)
at
a
particular
time
for
the
purpose
of
effecting
the
continuation,
without
interruption,
of
rights
that
are
substantially
similar
to
the
rights
that
the
taxpayer
had
under
a
government
right
held
by
him
before
the
particular
time;
(b)
a
taxpayer’s
“original
right’’
in
respect
of
a
government
right
means
a
right
or
licence
(i)
described
in
paragraph
(a),
and
.
.
.
(c)
a
taxpayer’s
“specified
right’’
in
respect
of
a
government
right
means
a
right
owned
by
a
taxpayer
on
December
31,
1971
that
was
(i)
an
original
right,
or
.
.
.
The
agreed
issues
as
stated
by
the
parties
are:
2.1
The
issues
under
appeal
relate
to
the
payment
of
the
$285,000
for
the
Licence
of
Occupation
granted
by
the
Government
of
Canada.
The
Plaintiff
reported
its
income
on
the
basis
that
it
received
the
sum
of
$285,000
“for
the
disposition
of,
or
for
allowing
the
expiry
of,
a
government
right’’,
namely,
the
rights
by
virtue
of
which
it
occupied
the
lands
upon
which
the
business
was
conducted.
By
Notice
of
Reassessment
the
Minister
of
National
Revenue
disallowed
the
Plaintiffs
treatment
of
the
$285,000
received,
saying
the
funds
were
received
for
the
disposition
of
something
other
than
a
government
right.
2.2
Paragraph
3(a)
provides
that
income
from
a
business
includes
amounts
taxable
under
section
14.
During
the
transitional
period,
for
the
purposes
of
section
14,
the
amount
payable
is
the
amount
specified
in
ITAR
21(1)
where
the
transaction
occurs
after
1971
and
before
1983.
2.3
For
eligible
capital
properties
sold
after
1971,
a
percentage
of
the
sale
proceeds
is
ordinarily
included
in
income
without
reference
to
the
cost
or
fair
market
value
of
the
property
on
valuation
day
except
in
the
case
of
certain
government
rights.
The
mechanics
of
section
14
are
such
that
one-half
of
the
proceeds
from
the
sale
of
the
eligible
capital
property
is
deducted
from
the
total
cumulative
eligible
capital
pool
of
the
business,
and
if
the
resulting
balance
is
negative
at
the
end
of
any
taxation
year,
such
negative
amount
is
to
be
included
in
income
for
the
year
pursuant
to
subsection
14(1).
During
the
transition
period
subsection
21(1)
of
the
ITAR
may
prescribe
a
lesser
amount
to
be
the
proceeds
from
the
sale
of
eligible
capital
property.
2.4
ITAR
21(1)(b)(ii)(B)
provides
for
special
treatment
of
the
consideration
received
for
the
disposition
of,
or
for
allowing
the
expiry
of,
a
government
right
by
excluding
from
the
cumulative
eligible
capital
calculation
an
amount
equal
to
the
fair
market
value
to
the
Plaintiff
as
at
December
31,
1971,
of
the
Plaintiffs
specified
right
in
respect
of
the
government
right.
2.5
If
it
is
found
to
be
a
government
right,
the
fair
market
value
of
the
government
right
as
of
valuation
day
was
$285,000.
2.6
The
Plaintiff
and
Defendant
join
issue
on
whether
or
not
the
Plaintiff
is
entitled
to
the
benefit
of
the
special
provision
recognizing
the
fair
market
value
of
its
government
right.
Further,
the
parties
join
issue
on
the
matters
set
out
below:
(a)
First
Issue
See
paragraph
11
of
the
Statement
of
Claim
and
paragraphs
10
and
11
of
the
Statement
of
Defence:
namely,
whether
or
not
the
rights
the
Plaintiff
had
under
the
Crown
lease
were
“substantially
similar’’
to
the
rights
it
had
before
under
the
Licence
of
Occupation,
within
the
meaning
of
paragraph
2
l(3)(a)
of
the
ITAR,
1971;
(b)
Alternative
Second
Issue
See
paragraph
8(b)
of
the
Statement
of
Claim
and
paragraphs
10
and
11
of
the
Statement
of
Defence:
namely,
whether
or
not
the
amount
received
by
the
Plaintiff
was
for
allowing
the
expiry
of
a
government
right;
(c)
Minister's
Position
If
The
Assessment
Is
Correct
If
the
Court
answers
“no’’
to
both
paragraphs
(a)
and
(b)
above,
then
the
Plaintiff
admits
that
the
proper
assessment
would
be
under
paragraph
10
of
the
Statement
of
Defence,
namely
that
the
proceeds
result
from
the
disposition
of
eligible
capital
property
and
are
taxable
pursuant
to
paragraph
3(a)
and
section
14
of
the
Income
Tax
Act
(see
Exhibit
“5’’).
Did
the
plaintiff
have
or
hold
a
“government
right”?
Clearly,
the
licence
agreement
effected
a
government
right
within
the
meaning
of
ITAR
21(3)(a)
having
been
“a
licence
.
.
.
acquired
by
the
taxpayer
[plaintiff],
(A)
as
a
result
of
a
transaction
occurring
before
1972”.
The
term
reserved
by
the
written
licence
agreement
(Ex
1)
expired
on
June
30,
1972;
but
the
licence
(a
metaphysical
concept
distinct
from
the
physical
writings
expressing
the
concept)
endured
with
continued
payments
to
the
defendant
until
it
was
allowed
by
both
parties
to
expire
when
they
mutually
displaced
the
licence
by
a
right
(or
rights)
expressed
in
a
new
written
agreement,
that
is,
a
lease
(Ex
3).
They
displaced
the
licence
by
executing
the
written
form
of
lease
on
April
1,
1974,
but
they
covenanted
with
each
other
that
the
term
of
the
lease
had
reached
back
for
its
commencement
to
July
1,
1972.
The
consequence,
which
arises
from
the
parties’
own
mutual
doing,
is
that
the
licence
in
fact
endured
until
April
1,
1974,
but
in
effect
endured
only
until
it
was
retroactively
displaced
by
the
rights
accorded
under
the
lease
on
July
1,
1972.
Thus,
it
is
clear
that
during
that
period
of
concurrence
from
June
30,
1972
until
March
31,
1974,
the
plaintiff
had
acquired
a
“right
[under
the
written
lease]
or
licence”
as
described
in
ITAR
21(3)(a),
(i)
and
(ii).
Since
it
is
no
part
of
either
party’s
case
that
either
one
of
them
duped
the
other
into
an
illegal
or
void
relationship
during
that
period
of
concurrence,
contrary
to
anything
which
was
“authorized
by
or
pursuant
to
a
law
of
Canada”
or
otherwise,
then
it
follows
that
the
plaintiffs
licence
was
uninterrupted,
or
it
had
acquired
a
right
during
that
period.
It
is
of
little
moment
which
it
be,
because
a
government
right
means
either
a
right
or
licence.
If
the
plaintiffs
government
right
were
a
licence,
then
it
is
the
licence
which
it
acquired
as
a
result
of
a
transaction
occurring
before
1972.
The
ten-year
term
of
the
written
licence
agreement
expired
half-way
through
1972,
and
the
defendant
accorded
the
plaintiff
a
licence
of
continuing
occupancy
in
fact
(if
not
in
effect)
until
the
written
form
of
lease
(Ex
3)
was
signed.
If
the
plaintiffs
government
right
were
evinced
in
the
written
form
of
lease
executed
on
April
1,
1974,
then
it
was
acquired
“at
a
particular
time”
after
1971,
even
if
its
effective
date
were
taken
as
July
1,
1972.
But,
the
question
remains,
was
that
right
acquired
by
the
plaintiff
“for
the
purpose
of
effecting
the
continuation
without
interruption,
of
rights
that
are
substantially
similar
to
the
rights
that
the
taxpayer
had
under
a
government
right
held
by
him
before
the
particular
time?”
Whatever
might
have
been
the
defendant’s
purpose
in
requiring
the
plaintiff
to
execute
the
lease
(Ex
3)
as
Mr
Knebel
testified,
it
seems
obvious
that
the
plaintiffs
purpose
was
identical
with
the
purpose
described
in
ITAR
21
(3)(a)(iii)(B).
The
plaintiff
will
have
achieved
that
purpose
only
if
the
rights
expressed
in
the
lease
(Ex
3)
be
substantially
similar
to
the
rights
which
the
plaintiff
had
under
its
government
right
—
the
licence
expressed
in
Exhibit
1
—
held
by
it
before
the
particular
time.
Two
contemplations
of
ITAR
21(3)(a)(iii)(B)
evoke
notions
of
what
it
does
not
say
—
that
is,
matters,
in
which
it
does
not
constrain
the
taxpayer
who
seeks
to
invoke
it.
It
does
not
require
that
the
purpose
be
of
continuation,
without
interruption,
for
the
taxpayer
alone
and
forever,
of
rights
which
are
substantially
similar
to
those
which
the
taxpayer
previously
had.
Indeed,
in
the
context
of
ITAR
21(1),
whose
subject
involves
the
disposition
of,
or
allowing
the
expiry
of
a
government
right
for
valuable
consideration,
such
a
lack
of
constraint
is
quite
consonant
with
logic
and
good
sense.
It
is
contemplated
that
the
taxpayer
is
contracting
with
a
third
party
—
a
purchaser.
That
purpose
described
in
the
provision
also
does
not
require
that
the
later-acquired
rights
be
identically
the
same
as
the
government
right
held
by
the
taxpayer
before
the
particular
time
of
acquisition,
but
only
substantially
similar.
The
distinction
between
a
lease
and
a
licence
is
discussed
in
several
judgments
cited
by
the
defendant’s
counsel.
They
are:
D
R
Fraser
&
Co
Ltd
v
MNR,
[1946]
Ex
CR
211;
[1945]
CTC
429;
2
DTC
761;
Winter
Garden
Theatre
(London),
Ltd
v
Millenium
Productions,
Ltd,
[1947]
2
All
ER
331
(HL);
Errington
v
Errington
and
Woods,
[1952]
1
KB
290
(CA);
Harrison
and
Harrison
v
Lucas
et
al
(1957),
7
DLR
157
(2d)
(BCSC);
Metro-Matic
Services
Ltd
v
Hulmann
(1970),
12
DLR
(3d)
21
(Ont
HC);
and
Re
York
Central
Hospital
Association
and
Township
of
Vaughan
(1971),
22
DLR
(3d)
632
(Ont
HC).
All
of
these
authorities
elucidate
the
noted
distinction
but
they
are
of
little,
if
any,
aid
here
where
lease
rights
and
licence
are
both
simultaneously
subsumed
within
the
definition
of
“government
right”,
in
what
appears
to
be
a
legislative
avoidance
of
any
technical
distinctiveness
of
one
as
against
the
other.
The
issue
posed
by
the
parties
is
whether,
on
the
facts
of
this
case,
the
right
or
licence
acquired
by
the
plaintiff
at
the
particular
time
was
substantially
similar
to
the
plaintiffs
rights
under
a
government
right
held
by
it
before
that
time.
Both
counsel
embarked
on
a
clause-by-clause
comparison
of
the
licence
document
(Ex
1)
with
the
lease
document
(Ex
3).
Both
counsel
were
absolutely
correct
in
every
distinction
and
every
similarity
which
they
respectively
mentioned.
There
are
differences
and
there
are
similarities
in
the
provisions,
but
a
certain
provision
in
each
document
is
so
fundamental
to
the
resolution
of
the
issue
that,
read
the
one
with
the
other,
the
common
intent
evinced
leads
inescapably
to
the
finding
of
substantial
similarity.
In
the
licence
agreement
(Ex
1)
the
fourth
paragraph
provides:
4.
The
Licensee
will
not
exercise
or
carry
on
or
permit
to
be
exercised
or
carried
on
upon
the
land
a
business,
trade
or
calling
other
than
a
bungalow
camp
and
dining
room.
In
the
lease
agreement
(Ex
3)
the
second
operative
paragraph
provides:
2.
The
Lessee
will
use
the
land
in
a
manner
satisfactory
to
the
Superintendent
for
the
purpose
of
operating
a
bungalow
camp
with
dining
room
and
related
sales
and
staff
accommodation
incidental
to
the
maintenance
and
operations
thereof
only
and
for
no
other
purpose
whatsoever.
This
last
quoted
provision
speaks
of
manner
of
use
of
the
land
which
is
to
be
satisfactory
to
the
superintendent,
a
constraint
which
is
not
dissimilar
from
the
provisions
of
paragraph
6
of
the
licence
document
(Ex
1).
Thus,
the
right
to,
or
licence
for,
the
occupation
of
the
described
land,
granted
by
the
defendant
in
consideration
of
the
payment
of
periodic
sums,
for
the
commercial
operation
of
“a
bungalow
camp”
with
“dining
room”
is
the
substantial,
salient
similarity
of
rights
which
was
continued
without
interruption.
All
of
the
other
provisions
of
the
licence
and
the
lease,
while
no
doubt
important
in
themselves,
are
in
truth
merely
incidental
to
the
substantially
similar
rights,
which
were
accorded
to
the
plaintiff
by
the
defendant.
Carrying
on
the
bungalow
camp
business
is
the
substantially
similar
right
under
both
dispensations.
Indeed,
in
the
circumstances,
the
notion
of
“substantially
similar”
verges
on
that
of
“virtually
identical”.
The
first
issue
propounded
by
agreement
of
the
parties
is
clearly
resolved.
The
rights
which
the
plaintiff
had
under
the
Crown
lease
were
indeed
“substantially
similar”
to
the
rights
which
it
had
before
under
the
licence
of
occupation,
within
the
meaning
of
paragraph
21(3)(a)
of
the
ITAR,
1971.
The
second
issue
is
designated
by
the
parties
to
be
an
alternative
one,
and
strictly
speaking,
does
not
need
to
be
resolved.
In
any
event
“whether
or
not
the
amount
received
by
the
plaintiff
was
for
allowing
the
expiry
of
a
government
right”
is
their
amputated
formulation
which
creates
an
unnecessary
difficulty
in
light
of
the
period
of
concurrence
created
by
the
parties’
manner
of
dealing
with
the
government
right
or
rights
which
notionally
overlapped
between
June
30,
1972
and
March
31,
1974.
Here,
again,
is
a
distinction
—
now
between
“disposition”
and
“expiry”,
which
is
not
strictly
exacted
by
the
text
of
subparagraph
21(l)(b)(i)
of
the
ITAR,
1971.
After
all,
that
provision
speaks
of
“the
consideration
received
by
[the
plaintiff]
for
the
disposition
of,
or
for
allowing
the
expiry
of,
a
government
right”.
So
long
as
the
consideration
is
received
for
either
one
—
and
that
much
is
sure
here
—
the
enquiry
into
which
one
it
was,
is
unnecessary.
The
very
configuration
of
the
ITAR’s
quoted
expression
supports
such
an
interpretation.
Even
if
the
words
were,
“consideration
.
.
.
for
the
disposition
of
a
government
right,
or
consideration
..
.
for
allowing
the
expiry
of
such
a
right”,
they
would
still
bear
such
an
interpretation.
It
is
certain
that
one
or
other
of
these
notions
was
reified
during
the
period
of
concurrence,
and
the
determination
of
which
one
it
was
achieves
no
statutory
purpose.
The
unanimous
decision
of
the
Appeal
Division
of
this
Court
in
Universal
Timber
Products
Ltd
v
The
Queen,
[1974]
CTC
499;
74
DTC
6413
is
instructive
in
this
regard.
The
case
involved
a
dispute
about
whether
the
profit
on
the
sale
of
an
interest
in
a
timber
cutting
licence
was
taxable
as
income.
Mr
Justice.
Thurlow,
now
chief
justice
of
the
Court,
is
reported
at
502
(DTC
6415)
as
saying:
In
my
view
what
the
evidence
as
a
whole
shows
is
that
by
the
transactions
in
question
the
appellant
succeeded
in
converting
into
dollars
something
of
value
that
it
already
had,
whether
that
something
was
a
legal
right
or
privilege
or
position
or
not
and
whether
it
was
capable
of
being
the
subject
matter
of
a
sale
as
known
to
the
law
or
not.
The
several
steps
taken
by
the
appellant
including
joining
Jackson
in
the
application
for
the
new
licence,
the
assignment
of
the
interest
in
the
licence
to
Jackson
and
the
letter
to
the
District
Forester,
as
I
view
them,
were
but
devices
used
and
steps
taken
to
effect
that
conversion.
They
amounted
to
no
more
than
a
liquidation
or
realization
of
what
the
appellant
already
had
and
were
not
activities
constituting
an
adventure
or
concern
in
the
nature
of
trade
for
the
purpose
of
making
profit
by
acquiring
and
selling
an
interest
in
the
new
licence.
Although
not
exactly
on
point,
these
conclusions
help
one
to
interpret
the
import
of
the
ITAR
provisions
here
which
seem
to
be
intentionally
crafted
so
as
to
avoid,
or
to
subsume,
the
very
distinctions
which
the
court
is
asked
to
resolve.
In
summation,
the
court
answers
“yes”,
to
resolve
the
first
issue
propounded
by
the
parties.
A
resolution
of
the
alternative
second
issue
is
found
to
be
unnecessary.
On
the
evidence
the
plaintiff
has
positively
established
its
entitlement
to
resort
to
the
benefit
of
the
special
provision
of
the
ITAR,
1971,
recognizing
the
fair
market
value
($285,000)
of
its
government
right.
The
plaintiff
had
a
specified
right
on
Valuation
Day
which
was
an
original
right.
The
original
licence
was
in
existence
on
Valuation
Day
and
it
is
that
specified
right.
This
matter
is
to
be
referred
back
to
the
Minister
for
reassessment
on
the
basis
that
the
sum
of
$285,000
was
consideration
received
by
the
plaintiff
for
the
disposition
of,
or
for
allowing
the
expiry
of,
a
government
right
within
the
meaning
of
section
21
of
the
ITAR.
One
further
matter
must
be
considered.
At
the
close
of
his
argument,
counsel
for
the
plaintiff
asked
for
triple
costs,
or
alternatively,
costs
on
a
solicitor-and-
client
basis
if
the
plaintiff
were
successful,
because
“some
consideration
should
be
given
to
compensate
the
taxpayer
for
[bearing
the
burden
of]
this
test
case.”
Alas,
that
is
not
indicated
here.
The
costs
prescribed
by
this
Court’s
tariff
are
simply
dismal,
to
be
sure.
After
a
decade
and
a
half
of
inflation,
the
original
tariff
of
the
Court
ought
surely
to
be
revised.
It
is
not
to
be
revised
by
discretionary
concessions
in
some
cases
even
when,
as
here,
counsel
was
of
great
assistance
to
the
Court
—
as
was
his
adversary
—
in
submitting
a
logical,
lucid
and
thoroughly
helpful
presentation.
Such
was
the
stance
of
Mr
Justice
Collier
in
Guerin
v
The
Queen,
[1982]
2
FC
445
at
452,
cited
with
approval
by
Chief
Justice
Thurlow
in
Warwick
Shipping
Limited
v
Government
of
Canada
(No
2)
(1983),
48
NR
390
at
396.
The
plaintiff
is,
of
course,
entitled
to
its
ordinary
costs,
to
be
taxed.
Appeal
allowed.
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