Hugessen
J.A.:-This
is
an
appeal
from
a
judgment
of
the
trial
division
which
dismissed
the
appellant’s
appeal
from
reassessments
for
the
1985
and
1986
taxation
years.
The
appellant,
Hickman
Motors
Limited
(hereafter
sometimes
"Motors")
is
a
General
Motors
distributor
in
St.
John’s,
Newfoundland.
It
was,
at
all
relevant
times,
a
member
of
a
group
of
several
associated
companies
having
common
or
interlocking
ownership.
Towards
the
end
of
calendar
1984
(which
was
also
the
appellant’s
fiscal
year),
the
appellant
and
a
number
of
its
associated
companies
underwent
a
corporate
restructuring.
Most
of
the
details
of
that
restructuring
and
the
corporate
entities
involved
do
not
concern
us
here
and
it
is
necessary
to
mention
only
two
other
members
of
the
group,
Hickman
Equipment
Limited
(hereafter
sometimes
"Equipment")
and
Hickman
Equipment
(1985)
Limited
(hereafter
sometimes
"Equipment
(1985)").
The
former
was,
at
the
relevant
time,
a
wholly
owned
subsidiary
of
the
appellant
and
had
been
carrying
on
business
in
St.
John’s
in
the
leasing
of
heavy
equipment,
principally
supplied
by
John
Deere
Limited.
For
its
part,
"Equipment
(1985)"
was
also
a
wholly
owned
subsidiary
of
the
appellant;
it
was
incorporated
on
December
21,
1984,
and
from
January
2,
1985,
it
carried
on
the
same
heavy
equipment
leasing
business
that
had
formerly
been
carried
on
by
"Equipment".
The
transactions
with
which
we
are
here
concerned
took
place
on
December
28,
1984
(a
Friday),
and
January
2,
1985
(the
following
Wednesday,
after
the
New
Year’s
holiday).
On
the
former
date
’’Equipment”
was
voluntarily
liquidated
and
wound-up
into
its
parent
"Motors”.
Its
assets
which
included
depreciable
property
with
an
undepreciated
capital
cost
of
$5,196,422
thus
became
the
property
of
"Motors”.
On
January
2,
1985,
those
same
assets,
net
of
the
liabilities
of
"Equipment",
were
sold
by
"Motors"
to
"Equipment
(1985)"
for
a
consideration
of
$860,000.
In
its
1984
tax
return,
the
appellant
made
a
claim
for
capital
cost
allowance
in
the
amount
of
$2,029,942
in
respect
of
the
property
which
it
had
acquired
from
"Equipment"
on
the
winding-up
of
the
latter.
The
Minister
disallowed
this
claim
on
the
grounds
that
the
assets
of
"Equipment"
had
not
been
acquired
by
the
appellant
for
the
purpose
of
gaining
or
producing
income
and
the
result
of
such
disallowance
had
consequential
adverse
impact
on
the
appellant’s
1985
and
1986
tax
assessments.
There
followed
the
usual
notices
of
objection
and
an
unsuccessful
appeal
to
the
trial
division.
It
will
be
noted
that
while
the
contested
assessments
are
for
the
years
1985
and
1986,
the
only
issue
between
the
parties
is
as
to
the
claim
for
capital
cost
allowance
in
1984.
The
appellant’s
position,
if
I
understand
it
correctly,
is
that
the
provisions
of
subsection
88(1)
of
the
Income
Tax
Act,
R.S.C.
1952,
c.
148
(am.
S.C.
1970-71-72,
c.
63)
(the
"Act")
create
for
it
an
independent
right
to
claim
capital
cost
allowance
on
the
undepreciated
capital
cost
of
the
property
which
it
acquired
on
the
winding-up
of
"Equipment".
The
relevant
parts
of
that
subsection
read
as
follows:
88(1)
Where
a
taxable
Canadian
corporation
(in
this
subsection
referred
to
as
the
"subsidiary")
has
been
wound
up
after
May
6,
1974
and
not
less
than
90
per
cent
of
the
issued
shares
of
each
class
of
the
capital
stock
of
the
subsidiary
were,
immediately
before
the
winding-up,
owned
by
another
taxable
Canadian
corporation
(in
this
subsection
referred
to
as
the
"parent")
and
all
of
the
shares
of
the
subsidiary
that
were
not
owned
by
the
parent
immediately
before
the
winding-up
were
owned
at
that
time
by
persons
with
whom
the
parent
was
dealing
at
arm’s
length,
notwithstanding
any
other
provision
of
this
Act,
the
following
rules
apply:
(a)
subject
to
paragraph
(a.l),
each
property
of
the
subsidiary
that
was
distributed
to
the
parent
on
the
winding-up
shall
be
deemed
to
have
been
disposed
of
by
the
subsidiary
for
proceeds
equal
to,
(iii)
in
the
case
of
any
other
property,
the
cost
amount
to
the
subsidiary
of
the
property
immediately
before
the
winding-up;
(c)
the
cost
to
the
parent
of
each
property
of
the
subsidiary
distributed
to
the
parent
on
the
winding-up
shall
be
deemed
to
be
the
amount
deemed
by
paragraph
(a)
to
be
the
proceeds
of
disposition
of
the
property,
plus,
where
the
property
was
a
capital
property
(other
than
depreciable
property)
owned
by
the
subsidiary
at
the
time
that
the
parent
last
acquired
control
of
the
subsidiary
and
thereafter
without
interruption
until
such
time
as
it
was
distributed
to
the
parent
on
the
winding-up,
the
amount
determined
under
paragraph
(d)
in
respect
thereof;
(f)
where
property
that
was
depreciable
property
of
a
prescribed
class
of
the
subsidiary
has
been
distributed
to
the
parent
on
the
winding-up
and
the
capital
cost
to
the
subsidiary
of
the
property
exceeds
the
amount
deemed
by
paragraph
(a)
to
be
the
subsidiary’s
proceeds
of
disposition
thereof,
for
the
purposes
of
sections
13
and
20
and
any
regulations
made
under
paragraph
20(l)(a),
(i)
notwithstanding
paragraph
(c)
the
capital
cost
to
the
parent
of
the
property
shall
be
deemed
to
be
the
amount
that
was
the
capital
cost
thereof
to
the
subsidiary,
and
(ii)
the
excess
shall
be
deemed
to
have
been
allowed
to
the
parent
in
respect
of
the
property
under
regulations
made
under
paragraph
20(1
)(a)
in
computing
income
for
taxation
years
before
the
acquisition
by
the
parent
of
the
property.
The
appellant
argues
that
the
purpose
and
intent
of
this
legislative
provision
is
to
permit
a
parent
company
to
retain
and
continue
the
tax
character,
attributes
and
history
of
its
wholly
owned
subsidiary
on
the
winding-up
of
the
latter
so
as
to
allow
the
parent
to
step
into
the
’’tax
shoes"
of
the
subsidiary.
From
this,
the
appellant
argues,
it
follows
that
the
depreciable
property
in
the
hands
of
its
subsidiary
"Equipment"
necessarily
became
depreciable
property
in
appellant’s
hands
following
the
winding-up,
thereby
permitting
it
to
claim
capital
cost
allowance
on
the
undepreciated
capital
cost
thereof.
While
I
am
prepared,
in
general
terms,
to
agree
with
the
appellant’s
characterization
of
the
purpose
and
intent
of
subsection
88(1),
I
cannot
agree
that
it
gives
rise
to
the
results
contended
for.
In
and
of
itself,
the
subsection
creates
no
rights
to
any
deductions
at
all.
It
is
neither
a
charging
nor
a
relieving
provision.
It
produces
its
effect
not
at
the
time
when
liability
for
tax
arises,
at
the
end
of
a
taxpayer’s
taxation
year,
but
rather
at
the
time
that
the
event
to
which
it
relates,
the
winding-up
of
the
subsidiary,
takes
place.
That
event
is
deemed
to
produce
certain
results
which
may
be
compendiously
described
as
the
flow-through
from
the
subsidiary
to
the
parent
of
the
cost,
including
the
undepreciated
capital
cost,
of
the
subsidiary’s
property.
That
flow-
through
will
of
course
produce
important
tax
consequences,
but
they
are
not
to
be
found
in
the
text
of
section
88
itself.
It
nothing
serves
the
appellant
to
show
that
it
is
deemed
to
have
the
same
undepreciated
capital
cost
for
the
property
which
it
acquired
from
"Equipment"
as
"Equipment"
itself
had
immediately
prior
to
the
winding-
up;
nor
that
the
depreciable
property
of
"Equipment"
has
become
depreci-
able
property
in
appellant’s
hands.
The
question,
and
the
only
relevant
one
for
our
purposes,
is
to
know
whether
in
virtue
of
the
provisions
of
the
Income
Tax
Act
and
the
Regulations,
the
appellant
is
entitled
to
claim
capital
cost
allowance
on
such
undepreciated
capital
cost
in
respect
of
such
depreciable
property,
whatever
it
may
be.
A
very
similar
question
arose
in
the
recent
decision
of
this
Court
in
Mara
Properties
Ltd.
v.
Canada,
[1995]
2
C.T.C.
86,
95
D.T.C.
5168
(F.C.A.).
There
the
issue
was
whether
property
acquired
on
the
winding-up
of
the
subsidiary
had
become
part
of
the
taxpayer’s
inventory
so
as
to
give
rise
to
a
trading
loss
upon
its
disposition.
Speaking
for
the
majority
of
this
Court,
Marceau
J.A.,
said
at
page
89
(D.T.C.
5169):
I
have
no
doubt
that
subsection
88(1)
of
the
Income
Tax
Act
contains
a
rule
which
is
meant
to
apply
automatically.
It
is
even
expressed
to
operate
notwithstanding
any
other
provision
of
the
Act.
The
conditions
for
application
of
the
provision
are
clearly
set
out
and
have
been
met.
Subsection
88(1)
is
certainly
applicable
here.
As
I
understand
the
rule
enacted
in
that
provision,
it
is
to
the
effect
that
on
the
winding-up
of
a
subsidiary,
there
shall
be
a
deemed
disposition
by
the
subsidiary
of
each
of
its
properties
at
the
cost
amount
to
it
and
a
deemed
acquisition
of
the
property
by
the
parent
at
the
same
cost.
I
cannot
read
anything
else
in
that
provision.
More
particularly,
I
cannot
read
the
provision
as
saying
that,
if
the
property
was
part
of
the
inventory
of
the
subsidiary,
it
will
become
part
of
the
inventory
of
the
parent;
nor
does
it
specify
that
unrealized
losses
of
the
subsidiary
become
business
losses
for
the
parent.
It
does
not
say
that
the
parent
will
be
considered
for
tax
purposes
to
be
in
the
same
situation
as
the
subsidiary
was
with
regard
to
the
property.
It
determines
a
deemed
cost
of
acquisition
but
it
does
not
determine,
as
I
read
it,
whether
that
deemed
cost
and
the
actual
proceeds
of
sale
of
the
property
will
enter
into
the
calculation
of
the
parent’s
income
from
its
business.
That
determination
must
be
made
according
to
section
9
of
the
Act
which
defines
business
income.
In
order
to
satisfy
the
requirements
of
that
provision,
the
parent
must
demonstrate
that
the
property
has
become
part
of
its
own
inventory.
[Emphasis
added.]
Counsel
for
the
appellant
attempted
valiantly
to
distinguish
the
decision
in
Mara
Properties
on
the
grounds
that
it
dealt
with
inventory
and
trading
losses
whereas
the
present
case
has
to
do
with
depreciable
property
and
capital
cost
allowance,
but
I
must
confess
that,
in
my
view,
the
distinction
is
one
without
a
difference.
The
right
to
claim
capital
cost
allowance
is
wholly
statutory.
The
general
principle
with
regard
to
deductions
in
computing
business
income
is
set
forth
in
paragraph
18(l)(a):
18(1)
In
computing
the
income
of
a
taxpayer
from
a
business
or
property
no
deduction
shall
be
made
in
respect
of
(a)
an
outlay
or
expense
except
to
the
extent
that
it
was
made
or
incurred
by
the
taxpayer
for
the
purpose
of
gaining
or
producing
income
from
the
business
or
property.
As
an
exception
to
that
general
rule,
paragraph
20(1
)(a)
provides:
20(1)
Notwithstanding
paragraphs
18(l)(a),
(b)
and
(h),
in
computing
a
taxpayer’s
income
for
a
taxation
year
from
a
business
or
property,
there
may
be
deducted
such
of
the
following
amounts
as
are
wholly
applicable
to
that
source
or
such
part
of
the
following
amounts
as
may
reasonably
be
regarded
as
applicable
thereto:
(a)
such
part
of
the
capital
cost
to
the
taxpayer
of
property,
or
such
amount
in
respect
of
the
capital
cost
to
the
taxpayer
of
property,
if
any,
as
is
allowed
by
regulation;
Part
XI
of
the
Regulations
contains
the
rules
relating
to
capital
cost
allowance
and
Schedule
II
sets
out
the
various
classes
of
property
in
respect
of
which
such
allowance
may
be
claimed.
Paragraph
1102(l)(c)
of
the
Regulations
reads:
1102(1)
The
classes
of
property
described
in
this
Part
and
in
Schedule
IT
shall
be
deemed
not
to
include
property
(c)
that
was
not
acquired
by
the
taxpayer
for
the
purpose
of
gaining
or
producing
income;
This
text
is
wholly
consonant
with
paragraph
18(l)(a)
of
the
Income
Tax
Act:
deductions
for
capital
cost
allowance,
like
any
other
deductions,
are
prohibited
if
not
related
to
an
expenditure
incurred
for
the
purpose
of
gaining
or
producing
income.
Depreciable
property
which
was
not
acquired
for
such
purpose
is
deemed
not
to
be
included
in
any
of
the
classes
of
property
in
respect
of
which
capital
cost
allowance
may
be
claimed.
The
appellant
further
argues
that
subsection
1102(14)
operates
as
an
exception
to
this
general
rule:
1102(14)
For
the
purposes
of
this
Part
and
Schedule
II,
where
a
property
is
acquired
by
a
taxpayer
(a)
in
a
transaction
in
respect
of
which
an
election
was
made
under
subsection
8591)
or
(2),
97(2)
or
98(3)
of
the
Act,
(a.l)
in
a
transaction
in
respect
of
which
subsection
85(5.1)
or
98(5)
of
the
Act
is
applicable,
(b)
by
virtue
of
an
amalgamation
(within
the
meaning
assigned
by
subsection
87(1)
of
the
Act),
(c)
as
the
result
of
the
winding-up
of
a
Canadian
corporation
in
respect
of
which
subsection
88(1)
of
the
Act
is
applicable,
(d)
from
a
person
with
whom
the
taxpayer
was
not
dealing
at
arm’s
length
at
the
time
the
property
was
acquired,
or
(e)
for
rent
or
lease
to
the
person
from
whom
the
property
was
acquired
or
to
another
person
who,
at
the
time
the
property
was
acquired,
was
not
dealing
at
arm’s
length
with
the
person
from
whom
the
property
was
acquired,
and
the
property,
immediately
before
it
was
so
acquired
by
the
taxpayer,
was
property
of
a
prescribed
class
or
a
separate
prescribed
class
of
the
person
from
whom
it
was
so
acquired,
the
property
shall
be
deemed
to
be
property
of
that
same
prescribed
class
or
separate
prescribed
class,
as
the
case
may
be,
of
the
taxpayer.
The
appellant
points
in
particular
to
the
provisions
of
paragraph
(c)
in
this
text
and
claims
that
its
effect
is
to
nullify
the
general
rule
in
subsection
1102(1),
supra,
and
to
put
the
property
which
it
acquired
on
the
winding-up
of
"Equipment"
into
the
appropriate
prescribed
classes
in
Schedule
II
for
the
appellant,
whether
or
not
such
property
was
acquired
by
the
appellant
for
the
purposes
of
gaining
or
producing
income.
I
cannot
agree.
Subsection
1102(14)
does
not
have
the
reach
contended
for
it.
It
does
not
say
that
it
operates
notwithstanding
the
general
rule
set
out
in
subsection
1102(1)
or
the
underlying
principle
enshrined
in
paragraph
18(l)(a).
The
purpose
of
subsection
1102(14)
is
manifestly
to
prevent
the
acquirer
of
depreciable
property,
in
the
circumstances
described
in
the
various
paragraphs
thereof,
from
switching
such
property
from
one
class
to
another.
This
is
all
that
it
does.
One
has
only
to
look
at
the
provisions
of
paragraph
1102(14)(d)
(which,
incidently,
also
applies
to
the
acquisition
by
appellant
of
the
assets
of
"Equipment")
to
see
that
this
provision
cannot
possibly
have
the
effect
of
automatically
allowing
a
non-
arm’s
length
acquirer
to
claim
capital
cost
allowance
simply
because
the
person
from
whom
the
property
was
acquired
had
the
right
to
do
so.
I
conclude,
accordingly,
that
section
88
does
not
create
for
the
appellant
an
independent
right
to
claim
capital
cost
allowance
on
the
property
which
it
acquired
on
the
winding-up
of
its
subsidiary
"Equipment".
Such
a
claim
can
only
succeed
if
the
appellant
can
demonstrate
that
it
otherwise
meets
the
requirements
of
the
Act
and
Regulations.
Whether
or
not
the
appellant
is
in
its
subsidiary’s
"tax
shoes",
it
is,
like
every
other
taxpayer,
entitled
only
to
those
deductions
which
the
Act
allows.
It
is
the
Minister’s
position
that
the
appellant
did
not
acquire
the
property
of
"Equipment"
for
the
purposes
of
gaining
or
producing
income
as
required
by
paragraph
1102(l)(c)
of
the
Regulations
and
that,
as
a
consequence,
such
property
is
excluded
from
the
classes
in
Schedule
II
and
no
capital
cost
allowance
may
be
claimed
in
respect
of
it.
The
appellant,
on
the
other
hand,
argues
that
the
property
of
"Equipment"
was
acquired
for
income
producing
purposes
and
did
in
fact
produce
income
for
it
during
the
five-day
period
in
which
it
held
such
property.
The
question,
as
to
whether
property
has
been
acquired
for
the
purposes
of
gaining
or
producing
income
is,
of
course,
one
of
fact.
The
trial
judge
determined
it
adversely
to
the
appellant,
describing
as
’’notional”
any
attempt
by
the
appellant
to
earn
income
from
the
assets.
We
must,
of
course,
approach
that
finding
with
proper
deference.
In
my
view,
the
test
to
be
applied
in
determining
whether
property
has
been
acquired
for
the
purpose
of
gaining
or
producing
income
is
similar
to
that
which
was
authoritatively
settled
by
the
Supreme
Court
of
Canada
for
determining
the
analagous
question
as
to
whether
a
taxpayer
is
carrying
on
a
business
with
a
reasonable
expectation
of
profit.
In
Moldowan
v.
The
Queen,
[1978]
1
S.C.R.
480,
[1977]
C.T.C.
310,
77
D.T.C.
5213,
Dickson
J.,
as
he
then
was,
speaking
for
the
Court,
said
as
follows
at
pages
485-86
(C.T.C.
313-14,
D.T.C.
5215):
There
is
a
vast
case
literature
on
what
reasonable
expectation
of
profit
means
and
it
is
by
no
means
entirely
consistent.
In
my
view,
whether
a
taxpayer
has
a
reasonable
expectation
of
profit
is
an
objective
determination
to
be
made
from
all
of
the
facts.
The
following
criteria
should
be
considered:
the
profit
and
loss
experience
in
past
years,
the
taxpayer’s
training,
the
taxpayer’s
intended
course
of
action,
the
capability
of
the
venture
as
capitalized
to
show
a
profit
after
charging
capital
cost
allowance.
The
list
is
not
intended
to
be
exhaustive.
Several
of
the
criteria
mentioned
by
Dickson
J.
in
his
non-
exhaustive
list
argue
strongly
against
the
taxpayer’s
contention;
there
is
no
evidence
to
support
any
which
would
point
the
other
way.
In
particular,
"Equipment’s"
experience
in
past
years
was
one
of
substantial
losses;
"Motors"
was
not
in
the
business
of
leasing
heavy
equipment;
and
the
intended
course
of
action
of
the
appellant,
at
the
time
the
assets
of
"Equipment"
were
acquired
by
it,
was
admittedly
to
turn
such
assets
over
to
"Equipment
(1985)"
within
five
days’
time.
While
I
would
not
wish
to
be
taken
as
suggesting
that
there
is
any
temporal
requirement
to
a
taxpayer’s
holding
of
property
for
the
purposes
of
earning
income,
the
fact
that
this
taxpayer
held
the
property
here
in
issue
only
over
the
period
of
a
long
holiday
weekend
is
surely
indicative
of
the
fact
that
it
had
no
intention
of
actually
earning
income
from
the
property.
For
practical
purposes,
the
rollover
from
the
appellant
to
"Equipment
(1985)"
might
as
well
have
occurred
immediately
following
the
winding-up
of
"Equipment".
The
trial
judge’s
use
of
the
word
"notional"
was
appropriate.
The
evidence
also
makes
it
plain
that
the
appellant
itself
did
not
at
the
time
treat
the
property
which
it
acquired
from
the
winding-up
of
"Equipment"
as
being
a
potential
or
actual
source
of
income:
no
such
income
was
shown
in
the
appellant’s
books
for
either
its
1984
or
its
1985
taxation
years.
The
evidence
of
the
appellant’s
sole
witness,
Mr.
Grant,
commenting
on
the
notes
to
the
financial
statements,
is
eloquent
(at
pages
54-55
of
the
transcript
of
the
proceedings,
Trial
Division):
A.
The
last
paragraph
outlines
the
wind-up
on
December
28.
And
it
goes
on
to
state
that
the
assets
and
liabilities
acquired
have
a
net
value
approximating
the
above
investment
of
$860,000,
and
are
not
reflected
in
these
financial
state-
ments.
So
we
show
that
as
a
net
figure,
that
would
be
the
assets
less
the
liabilities.
Q.
Well,
if
the
business
of
Hickman
Equipment
Ltd.
was
wound
up
into
Hickman
Motors
Ltd.
effective
December
28,
1984,
why
did
you
not
show
the
revenues
and
expenses
of
Hickman
Equipment
Ltd.
as
part
of
the
revenues
and
expenses
of
Hickman
Motors
Ltd.
as
at
December
31,
1984?
A.
Well,
in
our
judgment
at
that
time,
the
revenue—the
income
and/or
loss
that
may
have
been
generated
would
not
have
adjusted
[sic:
"justified"?]
the
auditing
expense
and
the
accounting
expense
to
reconstruct
the
records
for
the
three-,
four-day
period.
We
would
have
had
to
have
had
our
external
auditors
involved
for
a
period
of
time
and
we
would
have
had
to
have
had
our
own
staff
involved.
[Emphasis
added.
]
In
sum
therefore,
I
am
of
the
view,
that
the
trial
judge’s
finding
of
fact
to
the
effect
that
the
appellant
did
not
acquire
the
property
of
"Equipment"
for
the
purpose
of
gaining
or
producing
income
is
concordant
with
the
applicable
principles
of
law
and
is
solidly
based
in
the
evidence.
I
would
not
interfere
with
it.
This
brings
me
to
the
appellant’s
last
argument
which
is
based
upon
a
submission
which
was
advanced
neither
in
the
original
notice
of
opposition
nor
in
the
proceedings
in
the
trial
division.
Assuming,
which
I
doubt,
that
the
question
is
properly
raised
before
us,^
it
is,
in
my
view,
without
substance.
If
I
understand
the
argument
correctly,
it
is
that
the
appellant
is
entitled
to
claim
a
terminal
loss
equal
to
the
entire
amount
of
the
undepreciated
capital
cost
of
the
property
which
it
received
from
"Equipment"
and
which
it
still
owned
as
at
the
close
of
its
fiscal
year
on
December
31,
1984.
Since
this
property
is
deemed
by
the
operation
of
subsection
1102(1),
supra,
not
to
be
included
in
any
of
the
classes
in
Schedule
II,
the
appellant,
it
is
argued,
did
not
own
any
property
of
the
relevant
class
at
year
end
and
is
therefore
governed
by
the
provisions
of
subsection
20(16):
20(16)
Notwithstanding
paragraphs
18(l)(a),
(b)
and
(h),
where
at
the
end
of
a
taxation
year,
(a)
the
aggregate
of
all
amounts
determined
under
subparagraphs
13(21)(f)(i)
to
(ii.l)
in
respect
of
depreciable
property
of
a
particular
prescribed
class
of
a
taxpayer
exceeds
the
aggregate
of
all
amounts
determined
under
subparagraphs
13(21)(f)(iii)
to
(viii)
in
respect
of
depreciable
property
of
that
class
of
the
taxpayer,
and
(b)
the
taxpayer
no
longer
owns
any
property
of
that
class,
in
computing
the
taxpayer’s
income
for
the
year
(c)
there
shall
be
deducted
the
amount
of
the
excess
determined
under
paragraph
(a),
and
(d)
no
amount
shall
be
deducted
for
the
year
under
paragraph
(l)(a)
in
respect
of
property
of
that
class,
and
the
amount
of
the
excess
determined
under
paragraph
(a)
shall
be
deemed
to
have
been
deducted
under
paragraph
(l)(a)
in
computing
the
taxpayer’s
income
for
the
year
from
a
business
or
property.
The
argument
is
ingenious
but
the
flaw
is
obvious.
If
the
effect
of
subsection
1102(1)
is
that
the
appellant
did
not
own
any
property
of
the
relevant
class
as
of
December
31,
it
equally
did
not
own
it
on
December
28.
Assuming
without
deciding
that
the
effect
of
paragraph
20(16)(b),
supra,
is,
as
the
appellant
argues,
to
remove
any
requirement
that
there
be
a
disposition
in
order
to
trigger
a
terminal
loss,
the
text
makes
it
abundantly
plain
that
the
taxpayer
must,
at
some
previous
time,
have
owned
property
of
the
relevant
class;
no
other
meaning
can
be
attributed
to
the
use
by
Parliament
of
the
words
"no
longer
owns".
Indeed,
if
it
were
possible
to
claim
a
terminal
loss
in
respect
of
property
which
one
had
never
owned
it
is
difficult
to
see
why
anyone
should
ever
have
to
pay
any
taxes
at
all.
For
all
the
foregoing
reasons,
I
would
dismiss
the
appeal
with
costs.
Appeal
dismissed.