Date: 20020205
Dockets: 1999-3556-IT-G,
1999-3558-IT-G,
1999-3561-IT-G
BETWEEN:
FRANCIS DECK,
THERESA DECK WOOD,
ELLEN JANE ROSE,
Appellants,
and
HER MAJESTY THE QUEEN,
Respondent.
Reasons for Judgment
Hershfield, J.T.C.C.
[1] These appeals from assessments of
tax with respect to the 1997 taxation year were heard on common
evidence under the Tax Court of Canada Rules (General
Procedure).
[2] The sole issue is whether a
business investment loss was properly claimable in the year by
the Appellants in respect of amounts owed to them by
Fran Restaurants Limited (the "Company"). This
issue comes down to the question of whether the Appellants
properly determined that such amounts owed to them had become
uncollectible or bad debts, in the subject year. The facts have
been partially agreed to pursuant to the following statement
submitted by the parties to which I have made minor clarifying
edits based on comments of counsel at the hearing.
Partial Agreed Statement of Facts:
The Appellants and the Respondent agree on the following
Facts:
1. The
Appellants are individuals residing in the City of Toronto, in
the Province of Ontario.
2. The
Appellants are brother and sisters.
3. The Company
was incorporated in 1940.
4. The parents
of the Appellants originally owned all the shares of the
Company.
5. The parents
through the Company started a small ten stool restaurant in
1940.
6. In May 1959
the Company had four restaurants.
7. The
Appellant Francis Deck joined the family restaurant business in
1959.
8. After the
parents' death the shares of the Company were inherited by
the three Appellants in equal proportions.
9.
Historically, the restaurants had been funded by the family.
10. The father would
provide the capital to run the restaurant and would make advances
to the Company as needed for capital expenditure, then he would
draw the capital out or recover the money through loan
repayment.
11. The Company did not
own the buildings used by the restaurants rather the parents
owned them. The leasehold improvements, tables, chairs, kitchen
equipment and other such items were owned by the Company.
12. After the parents'
death the Appellants owned the restaurant buildings first through
a trust set up by their parents and then directly after being
flowed through the trust. The Appellants continued to lease
these buildings to the Company.
13. These buildings were
rolled over under section 85(1) of the Income Tax Act (the
"Act") into the Company in 1994 for the value of
buildings with the Appellants receiving common shares and a long
term demand note in the amount of $1,926,532. There was no
capital gains tax paid by the Appellants (on the transfer out of
the trust or the transfer to the Company). The Company
subsequently sold these buildings, realized capital gains and
utilized these gains against its losses for the other years.
14 In 1994 the Company
owed money to its creditors. The Appellants rolled the buildings
to the Company as stated in paragraph 13 (plus made additional
cash advances) in order to provide cash flow to the Company and
to prevent the Company from declaring bankruptcy and thereby
effectively advanced $1,934,525 as a long term interest free loan
which was to be repaid at the rate of $15,000 per month.
15 At all relevant times,
the Company was a Canadian Controlled Private Corporation that
was a Qualifying Small Business Corporation as those terms are
defined in the Income Tax Act.
16. At all relevant times
the Company was in the restaurant business in the Province of
Ontario.
17. In 1997 the Company
owed money and was unable to pay its creditors. Most of the debt
was owed to Revenue Canada and the Government of Ontario for
various tax non-payments.
18. After unsuccessful
negotiations with it creditors, the Company filed a "Notice
of Intention to make a Proposal" with the Official Receiver
on October 9th, 1997. On or about December 31st, 1997,
the Company made a proposal to its creditors, through Mintz &
Partners Limited, Trustees and Bankruptcy, pursuant to
subsection 50.4(1) of the Bankruptcy and Insolvency
Act (the "Proposal").
19. The Proposal is
annexed hereto as Exhibit "A".
20. The Company was not
paying its debts and the Appellants did not want the Company to
declare bankruptcy. They wanted it to carry on business. They
wanted to get out of the financial difficulty by making the
Proposal. In the Proposal they agreed that they would not ask for
the repayment of their own long term loan at that time and their
claims were to be subordinated and postponed and were not to be
paid until the other creditors were paid in accordance with the
Proposal by March 2002. The governments of Canada and Ontario and
other small Creditors voted to accept the Proposal involving
lower repayments in order to keep the Company viable. In addition
to Revenue Canada and the Ontario Minister of Finance, there were
small suppliers.
21. This Proposal was
accepted by the Creditors and later approved by the Court under
subsection 62(2) of the Bankruptcy and Insolvency Act.
22. Section L on page 14
of the summary of the Proposal in Exhibit "A"
shows an estimated distribution to ordinary unsecured creditors
per dollar of proven claim of 15.5 ¢ .
23. Paragraph 23 of page 6
of the Proposal at Exhibit "A" provides as follows:
"Where this Proposal is accepted by the Debtor's
creditors and approved by the Court, the claims of Francis Deck,
Ellen Jane Rose, Theresa Wood and 747081 Ontario Limited
(hereinafter referred to as the "Related Creditors" as
at the date of filing of the Notice of Intention shall, be
subordinated and postponed until the fulfilment of the terms and
conditions of this Proposal by the Debtor. Upon the satisfaction
of the terms and condition of this Proposal by the Debtor or in
the event that the Debtor fails to comply with any of the terms
of this Proposal and the Proposal is annulled pursuant to the
provisions of the Act, the Related Creditors shall be
entitled to pursue payment in full for such claims against the
Debtor and receive payment for such claims."
24. The Company has made
payments to its creditors of $630,000 as provided for in the
Proposal (which amount satisfied all secured and preferred
claims).
25. As at December 31st,
1997, the Company owed the Appellant Francis Deck the amount
of $618,760.56, the Appellant Theresa Deck the amount of
$643,673.61 and the Appellant Ellen Jane Rose the
amount of $1,103,406.16 in respect of the long term advances made
by the Appellants. These loans were not secured. According to the
1997 financial statements of the Company no amount of loan was
due within one year.[1]
26. In computing their
income for the 1997 taxation year, the Appellant
Francis Deck claimed a business investment loss of $16,500,
the Appellant Ellen Jane Rose claimed a business
investment loss of $275,000 and the Appellant Theresa Deck
claimed no business investment loss. These loans were claimed
under sections 50(1)(a) and 39(1)(c) of the
Act.
27. Subsequently the
Appellants (sic) were advised by their accountants that
the claims referred to in paragraph 26 would not be
acceptable since the entire amount must be uncollectible in order
to qualify under section 50 of the Act. Accordingly,
all of the three Appellants filed Notices of Objection requesting
a business investment loss in the full amount of their debts. The
Canada Customs and Revenue Agency disallowed these claims on the
basis that the debts had not become bad debts in the year under
section 50(1)(a) of the Act and accordingly they
did not have a business investment loss under
section 39(1)(c) of the Act.
28. On July 24, 2001 the
Company made an Assignment in Bankruptcy under the Bankruptcy
and Insolvency Act.
29. As at the present
time, the Company has made no repayment to the Appellants of the
shareholder advances.
THE PARTIES DO NOT AGREE ON THE FOLLOWING FACTS:
30. That the Appellants had determined
at the time of filing this tax return that the whole of the
Appellants' debts had become uncollectible in the 1997
taxation year.[2]
[3] As noted in paragraph 19 of the
Partial Agreed Statement of Facts, a copy of the Proposal was
annexed to it. Included with the annexed Proposal was a
report to the creditors of the Company prepared by Mintz &
Partners Limited in January 1998. That report was prepared
after the Notice of Intention to Make a Proposal was filed with
the Official Receiver pursuant to the Bankruptcy and
Insolvency Act in October 1997. The report and
enclosures to it set out certain financial information as at
particular times between October 9, 1997 and December 31, 1997.
For example, the book value of the Company's assets as at
December 1, 1997 was $1,199,900.00. Creditor claims as at
October 9, 1997 were $4,655,278.00 and Mintz & Partners
Limited reported that if the Proposal were not accepted, the
Company would be bankrupt in January 1998 with an estimated
realizable value of assets of between $179,700.00 and
$240,200.00. Creditor claims were classified as follows:
Creditor
Classification
Amount
Secured
$ 649,599.00
Preferred
55,586.00
Unsecured
$3,950,093.00
Employee
Unknown
$4,655,278.00
Secured creditor claims consisted of a claim for $361,500.00
by a related entity and $288,099.00 by Revenue Canada. The
related entity's claim was to be postponed until fulfilment
of the terms of the Proposal. The Revenue Canada claim was, at
least in part, a claim for unpaid source deductions and/or GST
remittances and were to that extent trust obligations.[3]
[4] The Proposal was ultimately
accepted by creditors and it required that the Company make
payments during 1998 through 2001 to the trustee totalling
$630,000.00 plus 10% of excess profits (defined in the Proposal).
Based on estimates of corporate earnings, secured (and preferred)
creditors would receive 100 cents on the dollar while
unsecured creditors would receive between 15.2 cents and 17.9
cents on the dollar, being the low and high range of the
estimates. The amount of $630,000.00 was based on the lower
estimate. Further payments to Revenue Canada of 70% of any excess
profits were also provided for to ensure its cooperation. The
directors and officers of the Company were released from any
claims including any statutory claims and obligations pursuant to
which directors might otherwise be liable by law as
directors.
[5] As noted in the Agreed Statement
of Facts, the Company declared bankruptcy in 2001, after
$630,000.00 was paid to creditors pursuant to the Proposal.
Further Evidence
[6] Two witnesses testified at the
trial, namely, the Appellant Francis Deck and the accountant who
had represented the Company and the Appellants at all relevant
times. On the critical issue relating to the determination
actually made when the initial partial claim for a business
investment loss was filed, the testimony of both witnesses was
consistent and credible. Francis Deck and the accountant had
discussed the shareholder receivable prior to filing shareholder
personal tax returns for 1997 and, in light of the Proposal,
which had by then been accepted by creditors and the Court, and
the circumstances of the Company, it was acknowledged that
repayment of the shareholder loans was remote. Mr. Deck
testified that at the time he met with the accountant he thought
it would be a "miracle" if anything were collected. The
accountant testified that he agreed at that time that the whole
debt was a bad debt. Put in perspective, it is clear that the
Proposal advanced a new business plan refocusing efforts on more
viable operations and reducing overhead. It afforded some chance
to pay other creditors which chance immediate bankruptcy would
preclude (at least at the corporate level in respect of certain
funds owing to governments) and it was consistent with their (the
Appellants) struggle to keep the business afloat. However, the
ultimate survival of the shareholder receivable under the
Proposal and the financial projections upon which it was framed
were not, according to the testimony of the witnesses, sufficient
to change the determination that the loans were bad. That was the
express view of the accountant and Francis Deck when
considering the filing position of the Appellants for 1997. That
is, they determined that there was little if any chance of
collecting any of these shareholder loan amounts in spite of the
fact that they had been deferred and subordinated under the
Proposal on terms that left them potentially collectable (see
paragraph 23 of the Partial Agreed Statement of Facts).
[7] In spite of this determination,
the accountant advised the Appellants that the allowable
investment loss was available to the extent needed in the year by
each of them respectively and that is how the initial claims came
about. The accountant only discovered his error when the loss
claims were questioned. The testimony was clear that there was no
intention in the initial filings to suggest that the
determination was that only small portions of the loan accounts
were bad or that the Appellants had each taken different
positions as to the collectability of the accounts. Each
Appellant had agreed with the determination that the accounts
were bad and the disparate claims resulted from an error as to
how the losses could be claimed. I accept the accountant's
testimony on this point.
[8] There was testimony as well that
right up until July 1997, the shareholders were still advancing
funds to the Company as they had done in 1994 and 1996. I draw no
inference from this that the Appellants must thereby have
believed that their loan accounts were collectible throughout
1997 or that such advances in any way cast doubt on the
determination made in early 1998 as to the loans being bad by the
end of 1997. I accept the testimony of Mr. Deck that the decision
to seek bankruptcy protection was not made until August 1997 and
that the determination made in or about April 1998, that the
loans were uncollectible in 1997, was bone fide.
[9] There was testimony that no demand
for payment had ever been made in respect of the long term demand
note or any other part of the shareholders' loans. This
raises a question as to whether the debt was due and payable and
how that impacts on the claim for a business investment loss.
Analysis
[10] The Appellants submit that there are
four elements that must be met in order to claim a business
investment loss in the case of a shareholder loan[4]. These are:
1. The Company must
have been indebted to the Appellants
(subparagraph (39(1)(c)(iv));
2. The debt must have
become bad in the year (subsection 50(a));
3. The Company must have
been a small business corporation
(clause 39(1)(c)(iv)(A)); and
4. The debt must have been
acquired by the Appellants for the purpose of gaining or
producing income from business or property
(subparagraph 40(2)(g)(ii)).
The Appellants cite Gamus v. The Queen, [2001] 3 C.T.C.
2342 at paragraph 10 (TCC) as authority for these tests.
While these elements do not seem to be exhaustive of potential
elements that may be of issue in other cases, they are sufficient
in the context of the case at hand. Indeed, as stated, the
parties agreed that the only test or element in dispute in this
matter was whether the debt had become bad in the subject year.
Accordingly my analysis will be so limited.
[11] The Respondent's position in
these appeals is based on the argument that it was not reasonable
to determine that the debt had become bad at the end of 1997.
Since the debt was never paid and the debtor is bankrupt, the
Respondent's position is, necessarily, that the debt became
bad either before or after 1997. Counsel for the Respondent
points to the following as supporting the Respondent's
position:
(a)
the required determination as to the whole debt being bad was not
made or if made was not timely made. Factors the Respondent
relies on to support this position include the following: (i) the
shareholders had not acted in respect of the year (1997) in a
manner consistent with the position ultimately taken by them. In
1997 they were, like in earlier years, advancing funds on the
basis that such funds so advanced were recoverable; (ii) the
first determination of collectability of the loans was that they
were partially collectable. The attempt to amend such
determination as initially filed was not reasonable or timely in
respect of the 1997 year; and (iii) the Respondent asserts that
the Proposal which subordinated the advances was insufficient
reason to change their classification of them from presumably
recoverable in July 1997 when further advances were made, into
unrecoverable advances particularly given that projections used
in the Proposal suggested that the planned repayment schedule
might reasonably be back on track within 4 years;
(b)
the receivable was not due in the year; and
(c)
the Federal Court of Appeal decision in Flexi-Coil Ltd. v. The
Queen, 96 DTC 6350 (F.C.A.).
[12] As to (a) above, the Appellants assert
that they made a timely determination that the debt was a bad
debt and that their acts were not inconsistent with having done
so. I have accepted that the determination that the whole debt
was bad, was the first and only determination made by the
shareholders and that it was made prior to the filing of returns
for the 1997 year. As such, I have accepted that the
determination of the debt being bad was made on a timely basis.
This is not a case of a creditor changing a prior determination
as to the collectability of a debt which was the case in
Anjalie Enterprises Ltd. v. The Queen, 95 DTC 216 (TCC)[5]. However this
finding still assumes that 1997 was the right year to claim the
debt as a bad debt.
[13] Respondent's counsel has
suggested that the determination might just as readily have been
made in an earlier year (say 1996) or that the determination, if
properly postponed until after the creditors approved the
Proposal, might as appropriately have been further postponed
until there was some evidence that the business plan advanced by
the Proposal would not work. To respond to these suggestions
requires confirmation that the determination of when a debt
becomes a bad debt is a subjective one to be made by the debtor.
Such confirmation is found in Hogan v. M.N.R., 56
DTC 183 (T.A.B.) where a bad debt was defined at page 193 as
follows:
For the purposes of the Income Tax Act,
therefore, a bad debt may be designated as the whole or a portion
of a debt which the creditor, after having personally considered
the relevant factors mentioned above in so far as they are
applicable to each particular debt, honestly and reasonably
determines to be uncollectable at the end of the fiscal year when
the determination is required to be made, notwithstanding that
subsequent events may transpire under which the debt, or any
portion of it, may in fact be collected. The person making the
determination should be the creditor himself (or his or its
employee), who is personally thoroughly conversant with the facts
and circumstances surrounding not only each particular debt but
also, where possible, each individual debtor . . .
While this often quoted passage does not expressly identify
the year in which the bad debt determination is required to be
made, I think the inference is clear that it is the particular
year in which the creditor has honestly and reasonably
established the debt "to have become" bad. This is
consistent with the requirement in paragraph 50(1)(a) which deems
a bad debt to have been disposed of at the end of the year where
the debt (still owing at the end of the year) is established by
the taxpayer "to have become" a bad debt in the year.
While the expression "to have become" might suggest
that there is a burden on the taxpayer to prove that the debt had
not become bad in an earlier year, I do not think that is a
proper inference to be drawn from either the legislation in this
instance or the jurisprudence. A debt is only bad when it has
been proved uncollectible[6]. If a debt has not been "proved"
uncollectible in a prior year (presumably by the respondent where
the appellant has prima facie evidenced that a determination was
made in respect of a later year), it is open for the debt to be
"proved" (by the appellant) to have become
uncollectible in a later year even if circumstances, objectively
considered, might suggest that the debt had become uncollectible
in an earlier year. A creditor acting reasonably and honestly,
must be given some latitude in determining the year in which a
debt should first be considered to be a bad debt. That is,
recognition of a bad debt should not be too lightly refused by an
assertion that it was claimed too late where a creditor has only
been too optimistic or unaggressive in terms of seeking a
write-off of the bad debt.
[14] This being the case, I find that this
appeal cannot fail because the subject debt might have been
determinable as bad in an earlier year. The creditors have not
demonstrated any bad faith in not considering the write-off
earlier. There is no suggestion that the Appellants
inappropriately delayed for some mischievous purpose proving the
debt as having become bad.[7]
[15] The issue of accelerating the bad debt
claim is more squarely dealt with by the factors considered in
Hogan and subsequent cases since in such cases the
issue is whether the debt is uncollectible, not whether it was
uncollectible in an earlier year. In such cases the onus of
establishing that it is not too soon to treat a debt as bad,
i.e. not too soon to claim a loss for tax purposes, is
squarely on the creditor making the determination. However even
in this case the test is a subjective one if the creditor acts
reasonably and honestly. The prudence of the creditor as a
reasonable businessperson in making the determination might be
considered as a means of objectifying a determination that might
otherwise inappropriately accelerate a loss claim. In the context
of an attempted change of a prior determination by a creditor for
loss utilization purposes (i.e. where the bone fideness of the
person making the determination was suspect) Judge Lamarre
addressed the question in Anjalie at page 218 as
follows:
In general the question of when a debt becomes bad is a
question of fact to be determined according to the circumstances
of each case. Primarily a debt is recognized to be bad when it
has been proved uncollectible in the year. The question of when a
debt is to be considered uncollectible is a matter of the
taxpayer's own judgment as a prudent businessman.
(Emphasis mine)
Similarly in Flexi-Coil the trial Judge stated that the
Court must be satisfied that the taxpayer acted reasonably and in
a pragmatic business-like manner applying the proper factors in
making the determination that a debt was a bad debt.[8]
[16] In the case at hand, it is hard not to
accept that the Appellants acted reasonably and honestly and that
they made a prudent and pragmatic business-like decision in
determining that the advances had become uncollectible in 1997
having proceeded in that year to make a proposal under the
Bankruptcy Act.
[17] In Houle v M.N.R., 90 DTC 1247
(TCC), Judge Tremblay remarked at page 1252 that in the life of
an account different circumstances and factors may arise that
will establish the account as uncollectible "...but
the bankruptcy of the debtor is undoubtedly the simplest
case". In the spectrum of possible cases, the
Appellant's counsel argues that a proposal under the
Bankruptcy Act is the next simplest case. I see no
circumstances in this case that would cause me to take exception
with this argument. That there was some chance for recovery of
the debt (or at least a resumption of the planned repayment
schedule of $180,000.00 per year) after the four-year payout
period covered by the Proposal does not bar the determination
that the debts had become bad. As stated by Judge Sarchuk in the
case of Berretti v. M.N.R., 86 DTC 1719 (TCC) at
page 1722:
...Certain principles can be excerpted from these decisions.
There is for example no necessity that a debt be absolutely
irrecoverable ... and that possible recovery in the future is not
per se a bar to a determination of uncollectability...
These judgments also confirm the proposition that the
determination of uncollectability is to be made by the appellant
and not by an official of the respondent or some other
person.
[18] Further, I note that the extent of the
insolvency of the Company in 1997 supports Mr. Deck's
testimony that the chances of a business recovery sufficient to
permit any repayment of the debt was remote. The Company was
reorganizing under the Proposal but there no longer appeared to
be any means to continue on a scale that afforded the Company any
realistic chance of repaying shareholders. The objective of the
Proposal was to facilitate repayment of preferred creditors with
minimal repayment opportunities for the unsecured creditors. At
the end of 1997 the debt to asset value of the Company would seem
to overwhelmingly support a determination that the debt was bad
and that determination was in fact made before filing returns for
that year.
[19] Accordingly, having considered all the
factors that the Respondent raised in respect of its position (as
set out in paragraph 11(a) of these Reasons), I find that they do
not dissuade me from accepting that the determination that the
debt had become bad in 1997 meets the requirements in the
Act for establishing a business investment loss.
[20] As to the Respondent's reliance
(as set out in paragraph 11(b) of these Reasons) on the fact that
the shareholder advances were not a current liability due in the
year, I would concur that the advances, although on a demand
basis, were not a current liability in 1997. No demand had been
made and the financial statements did not show any part of these
advances as being current. However, this is not fatal to a
determination that the debt is bad in the year. I refer again to
Houle at page 1252. There, it is acknowledged that
circumstances may arise at any time during the life of the
account, "even if not yet payable", that might make
it uncollectible. In the case at bar the annual repayment amount
was not paid. Normally that would constitute a default and an
acceleration of the entire indebtedness. Even accepting that that
was not the result here and even if it is not appropriate to
infer a notional demand having been made, the whole of the
indebtedness can according to the principles set out in the
Houle decision still be considered to have become a bad
debt in a particular year, as circumstances permit or dictate,
notwithstanding that it is not due in that year. That is, that
only $180,000.00 was due according to the repayment schedule
accepted by the shareholders and that that repayment schedule
might have been resumed in four years, is not a bar to finding
that the entire indebtedness is bad. In this case there was
virtually no chance of getting the $180,000.00 per year for at
least four years and only the remotest chance (described as a
miracle) of getting paid anything, even then, on account of the
advances. The repayment terms of the loan were infringed upon by
the Proposal requirements. The Proposal came about by virtue of
the insolvency of the debtor Company which had depended on
advances from shareholders that were no longer forthcoming. These
circumstances justify the determination that the advances had
become, at that point, uncollectible whether or not they were
then due.
[21] Lastly, I will consider whether, as
asserted by the Respondent (see paragraph 11(c) of these
Reasons), the decision of the Federal Court of Appeal in
Flexi-Coil supports the Respondent's position that
the shareholder's advances in this case should not be
regarded as uncollectible in 1997. There are similarities between
the facts of that case and the facts of the case at hand. In
Flexi-Coil a parent Company as shareholder advanced funds
to two subsidiaries. As in the case at bar the shareholder
creditor was not at arms-length with the debtor and the debtor
relied on advances from its shareholder to be at least solvent if
not viable. In Flex-Coil the financial statements of
one subsidiary creditor did not show the debt as being a current
obligation. The subsidiaries were not going out of business. In
Flexi-Coil the Court of Appeal found that the partial
write-off of advances was not appropriate. There was a long-term
goal to keep operating. The similarities of that case and the
case at bar however end here. In Flexi-Coil there was a
finding that the parent was committed to keep funding the
subsidiaries. The financial statements of one of the subsidiaries
included a statement that the parent had undertaken to provide
additional working capital for another year. In the case at bar
the commitment of the shareholders to provide additional funds
ended in August 1997. In Flexi-Coil, the subsidiary with a
current liability to the parent had sufficient current assets to
pay all of its current accounts. That was not the case in the
case at bar. To the contrary in the case at bar the corporate
debtor was virtually insolvent as described in the Proposal and
would, but for the Proposal, be bankrupt by January 1998. The
Proposal in giving a breath of air to the Company did not thereby
give it access to further funds or assurances of the sort present
in Flexi-Coil. The historical support of the
shareholders and the non-currency of the loans are not sufficient
to bring the case at bar within the presidential scope of
Flexi-Coil in my view. The decision of the
Appellants in August 1997 to cause the Company to seek protection
from bankruptcy and the Company having filed a Notice of
Intention to make a Proposal with the Official Receiver in
October 1997, set this case apart. The commitment of the
Appellants (as distinct from the Company) to continue operating
under the Proposal on the chance of a business recovery in the
Company are not sufficient to dissuade me from a finding that the
Appellants acted reasonably from a business perspective in
determining that the debts had become bad in 1997. As such it is
not open for me to second-guess their judgment which has proven,
albeit four years later, to be correct.
[22] Accordingly, the appeals are allowed
with costs. The assessment in respect of each Appellant is
referred back to the Minister for reconsideration and
reassessment on the basis that the full amount of their
respective advances as agreed to in paragraph 25 of the Partial
Agreed Statement of Facts were business investment losses in
1997.
Signed at Ottawa, Canada this 5th day of February 2002.
J.T.C.C.
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