MacGuigan,
J.A.:—We
have
not
been
persuaded
by
the
appellant
that
Martin,
J.
made
any
error
of
law.
The
fundamental
question
in
issue,
whether
a
limited
partner
can
claim
a
loss
beyond
the
amount
for
which
he
or
she
can
be
made
liable
for
the
debts
and
obligations
of
the
partnership,
appears
to
us
to
have
been
correctly
decided
by
the
House
of
Lords
in
Reed
v.
Young,
[1986]
B.T.C.
242,
where
Lord
Oliver
of
Aylmerton
said
(at
246):
A
partnership
sustains
a
loss,
it
is
argued,
only
if
and
so
long
as
he
or
his
property
is
“at
risk”
of
having
to
pay
the
amount
of
the
loss.
Like
Nourse
J.
and
the
Court
of
Appeal,
I
find
myself
unable
to
subscribe
to
that
reasoning.
The
profits
and
losses
with
which
we
are
concerned
here
are
the
profits
and
losses
of
the
partnership
from
the
carrying
on
of
the
trade
as
shown
by
its
annual
profit
and
loss
account
and
computed
in
accordance
with
the
provisions
of
the
Act
The
assessment
of
tax
on
the
individual
partners
is
by
reference
to
their
respective
shares
as
set
out
in
the
partnership
deed
and
has
no
necessary
relation
to
what
may
ultimately
turn
out
to
be
the
proportions
in
fact
in
which
the
partner
is
called
upon
to
contribute
to
payment
of
the
firm’s
debts—for
instance,
if
one
or
more
of
his
partners
is
insolvent.
Thus
the
partnership's
trading
losses
are
conceptually
quite
distinct
from
the
debts
and
liabilities
of
the
firm
and
from
the
assets
which
are
available
to
meet
them.
We
would
be
concerned
in
particular
about
what
might
be
called
the
timing
effect
of
the
appellants
argument,
resulting
from
the
fact
that,
until
subsection
96(2.1)
was
added
to
the
Income
Tax
Act
by
S.C.
1986,
c.
55,
subsection
25(1),
there
was
no
carry-forward
of
a
loss
available
at
the
level
of
the
partnership.
Hence
the
appellants
position
could
lead
to
the
unfortunate
result
that
a
limited
partner
might
end
up
by
being
taxed
over
a
number
of
years
on
more
than
he
earned,
no
loss
carry-forward
being
available.
The
respondents
share
of
the
income
or
loss
over
a
period
of
years
(Appeal
Book
at
87)
shows
a
profit
of
$30,231
by
1979,
so
that
there
is
no
long-term
loss
of
tax
revenue
to
the
Government,
as
on
the
opposite
hypothesis
there
would
be
to
the
taxpayer
if
profits
were
subsequently
realized
that
could
not
be
offset
by
earlier
losses.
The
legislative
resolution
arrived
at
by
subsection
96(2.1)
appears
to
us
to
be
much
more
efficacious
than
the
kind
of
judicial
solution
proposed
by
the
Crown.
The
appeal
should
therefore
be
dismissed
with
costs.
Appeal
dismissed.
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