Date: 20031217
Docket: A-403-02
Citation: 2003 FCA 483
CORAM: ROTHSTEIN J.A.
NOËL J.A.
MALONE J.A.
BETWEEN:
BRENT G. McCLELLAND
Appellant
and
HER MAJESTY THE QUEEN
Respondent
Heard at Calgary, Alberta, on December 16, 2003.
Judgment delivered at Edmonton, Alberta, on December 17, 2003.
REASONS FOR JUDGMENT BY: NOËL J.A.
CONCURRED IN BY: ROTHSTEIN, J.A.
MALONE, J.A.
Date: 20031217
Docket: A-403-02
Citation: 2003 FCA 483
CORAM: ROTHSTEIN J.A.
NOËL J.A.
MALONE J.A.
BETWEEN:
BRENT G. McCLELLAND
Appellant
and
HER MAJESTY THE QUEEN
Respondent
REASONS FOR JUDGMENT
NOËL J.A.
[1] This is an appeal from a judgment of Beaubier J. of the Tax Court of Canada ([2002] T.C.J. No. 274) in which he dismissed the appeals lodged by the appellant against assessments issued with respect to his 1988 through 1997 taxation years on the basis that the appellant had no reasonable expectation of profit and that "[h]e was not in that business [the work of an artist] in those years" (reasons, paragraph 10).
[2] At issue in this appeal is whether the artistic endeavours of the appellant in each of the ten years in issue could be considered "a source of income", having regard to the test set out by the Supreme Court in Stewart v. Canada, [2002] 2 S.C.R. 645, a decision which was issued four days before Judge Beaubier rendered his decision and which may not have been brought to his attention.
[3] The Tax Court Judge, in the course of his reasons made a number of findings. Of significance for present purposes are the following which I extract from paragraphs 8 and 9 of the reasons:
There is no evidence of any profit or any loss by the Appellant respecting any work of art. There is no evidence that he produced any work of art during the years in question or before that or until March, 2002.
...
For the years in question, there is no evidence of any capital investment by the Appellant in this alleged venture. There is no evidence of any business venture to produce a work of art during the years in question. There is no evidence that the Appellant tried to or intended to produce an actual work of art, or an actual work of art to sell for a profit during the years in question. When the Appellant was asked twice, during his examination-in-chief, how he expected to generate revenue from works of art, he was unable to answer the question. Instead he indulged in two long meandering discourses.
...
The Appellant has a personal interest in art. Moreover his samples of expenses contained numerous proposed deductions for motel rooms and travel to visit his daughter in British Columbia. On the evidence it is clear that most, and perhaps all, of his proposed expenses relate to expenses he incurred in relation to his daughter or to personal visits to British Columbia.
...
The Appellant had no plan during the years in question to produce a work of art, or what the medium or material might be, or to make a profit from a work of art. He testified that he was experimenting with materials. From his testimony he may have been thinking about art, reading about it or even looking for inspiration. But he had no plan by which he would produce art for a profit. Nor did he formulate such a plan in those years.
[4] Although the reasons were drafted without the benefit of Stewart, supra, it seems clear that the Tax court Judge was of the view that the appellant's endeavours had a personal element and were not carried out in a commercial manner. In my opinion, these findings provide ample support for the conclusion that the appellant's endeavours over the lengthy period in issue did not constitute a source of income for purposes of the Act having regard to the approach set out in Stewart, supra (see in particular paragraphs 52 and 53 of that decision).
[5] The appellant however takes issue with the findings of fact made by the Tax Court Judge. Specifically, he submits that he did produce art work during the relevant period and that he had a planned course of action to produce art for profit. He asserts that the Tax Court Judge made a palpable error or ignored the evidence in holding otherwise.
[6] I can detect no such error. First, it seems clear from the reasons read as a whole that the Tax Court Judge did not find that the appellant had produced no art during the relevant period. Rather, he found that he produced no art for profit (reasons, paragraph 8, subparagraph 3; paragraph 9, subparagraph 2). His conclusion in that regard is amply supported by the evidence. As to the finding that the appellant had no set business plan, it is also supported by the evidence (See in particular the transcript of the appellant's testimony Appeal Book pages 130 to 136).The appellant suggests that we draw a different conclusion but is unable to show that the conclusion reached by the Tax Court Judge was not justified by the evidence.
[7] The appellant also alleges that the Tax Court Judge erred in limiting the expert testimony of Dr. Cynthia Freeland to the field of critical art theory. According to the appellant, Dr. Freeland should have been also qualified in the field of contemporary art and allowed to testify as an expert regarding "the business nature of the Appellant's conceptual art" (appellant's memorandum of fact and law, page 8. Points in issue, 2nd paragraph).
[8] However, the decision to qualify a witness as an expert, and the extent and relevance of that expertise is discretionary in nature (Tax Court of Canada (General Procedure) Rules, section 145). No reviewable error has been shown in the exercise of that discretion. In particular, I note that the question whether the appellant's artistic endeavours amounted to a business was at the heart of what the Tax Court Judge had to decide with the result that the usefulness of Dr. Freeland's opinion on this very question was dubious at best.
[9] I would dismiss the appeal with costs.
"Marc Noël
J.A.
FEDERAL COURT OF APPEAL
NAMES OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: A-403-02
STYLE OF CAUSE: BRENT GLYNN McCLELLAND v.
HER MAJESTY THE QUEEN
PLACE OF HEARING: Calgary, Alberta
DATE OF HEARING: December 16, 2003
REASONS FOR JUDGMENT: Noël, J.A.
CONCURRED IN BY: Rothstein, J.A.
Malone, J.A.
DATED: December 17, 2003
APPEARANCES:
Mr. Kerry W. McClelland FOR THE APPELLANT
Ms. Belinda Schmid FOR THE RESPONDENT
SOLICITORS OF RECORD:
Kerry W. McClelland, Calgary, AB FOR THE APPELLANT
Mr. Morris Rosenberg FOR THE RESPONDENT
Deputy Attorney General of Canada
Edmonton, AB
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