The taxpayer, which owned five revenue-producing properties, entered into an agreement to purchase a property comprising two apartment towers (the Talbot property), but was unable to complete the purchase at the originally agreed closing date because of cash flow difficulty, and ultimately settled the ensuing litigation by agreeing to purchase the property at the originally-agreed price.
In finding that a gain realized by the taxpayer less than three years later, pursuant to an offer that it did not actively seek out, was realized on income account, Nadon J. stated (at p. 6200) that:
"the fact that the Plaintiff could not afford and did not want the property points to a secondary intention at the time of acquisition of disposing of the property if the right offer came along."
A residential and commercial complex (Boundaryview) owned by the same taxpayer was found to have been acquired on capital account in light of evidence that it was intended to be its "crown jewel" and was sold approximately a year following the completion of construction only because of financial difficulties. Although title to the building was stratified, it was the industry practice at the time to do so in order to satisfy financing requirements.