Citation: 2008TCC522
Date: 20080916
Docket: 2008-125(IT)I
BETWEEN:
DARRELL G. LESNICK,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR JUDGMENT
Webb J.
[1]
The Appellant has filed an appeal
in relation to the amount of the allowable business investment loss that he
incurred in the year 2000 for the purposes of the Income Tax Act. The
Respondent does not dispute that the Appellant had incurred an allowable
business investment loss in 2000 but does dispute the amount of such loss that
was incurred.
[2]
The Appellant is claiming that the
amount of his business investment loss was $38,011 while the Respondent submits
that the amount of the Appellant’s business investment loss was $1,861. The
business investment loss of the Appellant will be the amount that is equal to
the amount that was owing to the Appellant by Lescom Investments Limited,
when it ceased operations in June 2000. The Appellant was a shareholder of
Lescom Investments Limited and the Respondent does not dispute that whatever
amount was owing to the Appellant became a bad debt in 2000 and was a business
investment loss, but, as noted above, states that this amount was only $1,861.
[3]
In filing his tax return for 2000
the Appellant claimed an allowable investment business investment loss of
$25,340, which is two-thirds of the amount of his claimed business investment
loss of $38,011. The position of the Respondent is that the amount of any
allowable business investment loss arising as a result of the amount owing to
the Appellant by Lescom Investments Limited becoming a bad debt in 2000 should
only be one-half of the amount of the business investment loss.
[4]
Prior to 1996, the Appellant was
working as a manager of a Tim Horton’s store in Prince Edward Island. The
Appellant decided to approach The TDL Group Ltd. about opening a
franchise in Cheticamp, Nova Scotia. The Appellant indicated that the initial cost for a
franchise was approximately $350,000. The Appellant did not have any funds to
invest in this project, but he did have the expertise as the manager of another
Tim Horton’s location. The Appellant arranged for three of his relatives to
provide most of the initial capital that was required. The Appellant stated
that he initially borrowed $5,800 from the Royal Bank and advanced these funds
to the company.
[5]
Only the Appellant and his brother
Kim were shareholders of Lescom Investments Limited, which was the company
that was formed to purchase the franchise rights. The Appellant stated that the
TDL Group Ltd. would not approve the granting of the franchise if all four
individuals, who were involved, were shareholders.
[6]
The Appellant indicated that the
franchise encountered problems from the outset. He indicated that it was his intention
to have the building open and available for business in the spring of 1996, but
it did not open until July 3, 1996. The company encountered cash flow problems
from the beginning and additional cash was required. A significant amount of
cash was required in 1997 and the other three individuals who were involved
were unable or unwilling to fund the entire additional amount that was required.
[7]
The Appellant's mother testified
during the hearing, and I accept her testimony. She indicated that when she
heard from the Appellant that they would require additional cash for their
company in 1997, she agreed to refinance her house and to lend the Appellant
the sum of $24,000. The Appellant's mother switched financial institutions to
arrange for this. She had been with the Toronto Dominion Bank and switched
to Canada Trust (this was prior to the merger of these two institutions). The
Appellant submitted a copy of the PowerLine Commitment Letter from Canada Trust
dated April 3, 1997. This document shows that the principal amount of $52,500
was borrowed by the Appellant’s mother and that this amount was split into two
parts – one was a closed amount of $24,000 and the other was an open amount of
$28,500. The Appellant's mother confirmed that the $24,000 closed amount was
the amount that she lent to the Appellant. The loan amount was split into two
parts so that they could identify the portion that was being advanced to the
Appellant and so that they could keep track of the amounts that he was repaying
on the loan. The Appellant’s mother testified that the Appellant has fully
repaid this loan to her.
[8]
There were certain costs incurred
in arranging this financing and the amount that the Appellant advanced to
Lescom Investments Limited from the $24,000 that was borrowed by the
Appellant’s mother from Canada Trust was $22,850.
[9]
The company continued to struggle
financially and additional funds were required. The Appellant stated that he advanced
an additional $12,500 to the company prior to the company collapsing in June of
2000 when the franchise was taken over by The TDL Group Ltd. After the franchise
was taken over by The TDL Group Ltd., the company no longer had any
assets.
[10]
The position of the Respondent is
that the Appellant did not produce sufficient evidence to establish that he was
owed $38,011 by Lescom Investments Limited when this company lost its Tim
Horton’s franchise to The TDL Group Ltd. and no longer had any assets.
[11]
In The Continental Insurance
Company v. Dalton Cartage Company Limited, [1982] 1 S.C.R. 164, Chief
Justice Laskin stated as follows:
Where there is
an allegation of conduct that is morally blameworthy or that could have a
criminal or penal aspect and the allegation is made in civil litigation, the
relevant burden of proof remains proof on a balance of probabilities. So this
Court decided in Hanes v. Wawanesa Mutual Insurance Co., [1963] S.C.R.
154. There Ritchie J. canvassed the then existing authorities, including especially
the judgment of Lord Denning in Bater v. Bater, [1950] 2 All E.R. 458,
at p. 459, and the judgment of Cartwright J., as he then was, in Smith v.
Smith and Smedman, [1952] 2 S.C.R. 312, at p. 331, and he concluded as
follows (at p. 164):
Having regard to the above authorities, I am of opinion that the
learned trial judge applied the wrong standard of proof in the present case and
that the question of whether or not the appellant was in a state of
intoxication at the time of the accident is a question which ought to have been
determined according to the "balance of probabilities".
It is true that apart from his reference to Bater v. Bater and to
the Smith and Smedman case, Ritchie J. did not himself enlarge on what
was involved in proof on a balance of probabilities where conduct such as that
included in the two policies herein is concerned. In my opinion, Keith J. in
dealing with the burden of proof could properly consider the cogency of the
evidence offered to support proof on a balance of probabilities and this is
what he did when he referred to proof commensurate with the gravity of the
allegations or of the accusation of theft by the temporary driver. There is
necessarily a matter of judgment involved in weighing evidence that goes to the
burden of proof, and a trial judge is justified in scrutinizing evidence with
greater care if there are serious allegations to be established by the proof
that is offered. I put the matter in the words used by Lord Denning in Bater
v. Bater, supra, at p. 459, as follows:
It is true that by our law there is a higher standard of proof in
criminal cases than in civil cases, but this is subject to the qualification
that there is no absolute standard in either case. In criminal cases the charge
must be proved beyond reasonable doubt, but there may be degrees of proof
within that standard. Many great judges have said that, in proportion as the
crime is enormous, so ought the proof to be clear. So also in civil cases. The
case may be proved by a preponderance of probability, but there may be degrees
of probability within that standard. The degree depends on the subject-matter.
A civil court, when considering a charge of fraud, will naturally require a
higher degree of probability than that which it would require if considering
whether negligence were established. It does not adopt so high a degree as a
criminal court, even when it is considering a charge of a criminal nature, but
still it does require a degree of probability which is commensurate with the
occasion.
I do not
regard such an approach as a departure from a standard of proof based on a
balance of probabilities nor as supporting a shifting standard. The question in
all civil cases is what evidence with what weight that is accorded to it will
move the court to conclude that proof on a balance of probabilities has been
established.
(emphasis
added)
[12]
In Hickman Motors Limited v.
The Queen, [1997] 2 S.C.R. 336, Justice L'Heureux-Dubé stated as
follows:
92 It
is trite law that in taxation the standard of proof is the civil balance of
probabilities: Dobieco Ltd. v. Minister of National Revenue, [1966]
S.C.R. 95, and that within balance of probabilities, there can be varying
degrees of proof required in order to discharge the onus, depending on the subject
matter: Continental Insurance Co. v. Dalton Cartage Co., [1982] 1 S.C.R.
164; Pallan v. M.N.R., 90 D.T.C. 1102 (T.C.C.), at p. 1106. The
Minister, in making assessments, proceeds on assumptions (Bayridge Estates
Ltd. v. M.N.R., 59 D.T.C. 1098 (Ex. Ct.), at p. 1101) and the initial onus
is on the taxpayer to "demolish" the Minister's assumptions in the
assessment (Johnston v. Minister of National Revenue, [1948] S.C.R. 486;
Kennedy v. M.N.R., 73 D.T.C. 5359 (F.C.A.), at p. 5361). The initial
burden is only to "demolish" the exact assumptions made by the
Minister but no more: First Fund Genesis Corp. v. The Queen, 90 D.T.C.
6337 (F.C.T.D.), at p. 6340.
93 This
initial onus of "demolishing" the Minister's exact assumptions is met
where the appellant makes out at least a prima facie case: Kamin v. M.N.R.,
93 D.T.C. 62 (T.C.C.); Goodwin v. M.N.R., 82 D.T.C. 1679 (T.R.B.). In
the case at bar, the appellant adduced evidence which met not only a prima
facie standard, but also, in my view, even a higher one. In my view, the
appellant "demolished" the following assumptions as follows: (a) the
assumption of "two businesses", by adducing clear evidence of only
one business; (b) the assumption of "no income", by adducing clear evidence
of income. The law is settled that unchallenged and uncontradicted evidence
"demolishes" the Minister's assumptions: see for example MacIsaac
v. M.N.R., 74 D.T.C. 6380 (F.C.A.), at p. 6381; Zink v. M.N.R.,
87 D.T.C. 652 (T.C.C.). As stated above, all of the appellant's evidence in the
case at bar remained unchallenged and uncontradicted. Accordingly, in my view,
the assumptions of "two businesses" and "no income" have
been "demolished" by the appellant.
94 Where
the Minister's assumptions have been "demolished" by the appellant,
"the onus . . . shifts to the Minister to rebut the prima facie case"
made out by the appellant and to prove the assumptions: Magilb Development
Corp. v. The Queen, 87 D.T.C. 5012 (F.C.T.D.), at p. 5018. Hence, in the
case at bar, the onus has shifted to the Minister to prove its assumptions that
there are "two businesses" and "no income".
95 Where
the burden has shifted to the Minister, and the Minister adduces no evidence
whatsoever, the taxpayer is entitled to succeed: see for example MacIsaac, supra,
where the Federal Court of Appeal set aside the judgment of the Trial Division,
on the grounds that (at p. 6381) the "evidence was not challenged or
contradicted and no objection of any kind was taken thereto". See also Waxstein v. M.N.R.,
80 D.T.C. 1348 (T.R.B.); Roselawn Investments Ltd. v. M.N.R., 80 D.T.C.
1271 (T.R.B.). Refer also to Zink, supra, at p. 653, where, even if the
evidence contained "gaps in logic, chronology, and substance", the
taxpayer's appeal was allowed as the Minister failed to present any evidence as
to the source of income. I note that, in the case at bar, the evidence contains
no such "gaps". Therefore, in the case at bar, since the Minister
adduced no evidence whatsoever, and no question of credibility was ever raised
by anyone, the appellant is entitled to succeed.
(emphasis
added)
[13] In the recent decision of the House of Lords of In
re Doherty, [2008] UKHL 33, Lord Carswell stated as follows:
25. The phrase
“degree of probability” was picked up and repeated in a number of subsequent
cases – see, for example, In re Dellow’s Will Trusts [1964] 1 WLR 451,
455, Blyth v Blyth [1966] AC 643, 669 and R v Secretary of State for
the Home Department, Ex p Khawaja [1984] AC 74, 113-4 – and may have caused
some courts to conclude that a different standard of proof from the balance of
probabilities or a higher standard of evidence was required in some cases. In
so far as such misunderstanding has occurred, it should have been put to rest
by the frequently-cited remarks of Lord Nicholls of Birkenhead in In re H (Minors).
Immediately after the passage which I have quoted from his opinion, he went on
at pages 586-7:
“When assessing the
probabilities the court will have in mind as a factor, to whatever extent is
appropriate in the particular case, that the more serious the allegation the
less likely it is that the event occurred and, hence, the stronger should be
the evidence before the court concludes that the allegation is established on
the balance of probability. Fraud is usually less likely than negligence.
Deliberate physical injury is usually less likely than accidental physical
injury. A stepfather is usually less likely to have repeatedly raped and had
non consensual oral sex with his under age stepdaughter than on some occasion
to have lost his temper and slapped her. Built into the preponderance of
probability standard is a generous degree of flexibility in respect of the
seriousness of the allegation.
Although the result is much the
same, this does not mean that where a serious allegation is in issue the
standard of proof required is higher. It means only that the inherent
probability or improbability of an event is itself a matter to be taken into
account when weighing the probabilities and deciding whether, on balance, the
event occurred. The more improbable the event, the stronger must be the
evidence that it did occur before, on the balance of probability, its
occurrence will be established … No doubt it is this feeling which
prompts judicial comment from time to time that grave issues call for proof to
a standard higher than the preponderance of probability.”
…
27. Richards LJ expressed the
proposition neatly in R (N) v Mental Health Review Tribunal (Northern
Region) [2005] EWCA Civ 1605, [2006] QB 468, 497-8, para 62, where he said:
“Although there is a single
civil standard of proof on the balance of probabilities, it is flexible in its
application. In particular, the more serious the allegation or the more serious
the consequences if the allegation is proved, the stronger must be the evidence
before a court will find the allegation proved on the balance of probabilities.
Thus the flexibility of the standard lies not in any adjustment to the degree
of probability required for an allegation to be proved (such that a more
serious allegation has to be proved to a higher degree of probability), but in
the strength or quality of the evidence that will in practice be required for
an allegation to be proved on the balance of probabilities.”
In my opinion this paragraph
effectively states in concise terms the proper state of the law on this topic.
I would add one small qualification, which may be no more than an explanation
of what Richards LJ meant about the seriousness of the consequences. That
factor is relevant to the likelihood or unlikelihood of the allegation being
unfounded, as I explain below.
28. It is recognised by
these statements that a possible source of confusion is the failure to bear in
mind with sufficient clarity the fact that in some contexts a court or tribunal
has to look at the facts more critically or more anxiously than in others
before it can be satisfied to the requisite standard. The standard
itself is, however, finite and unvarying. Situations which make such heightened
examination necessary may be the inherent unlikelihood of the occurrence taking
place (Lord Hoffmann’s example of the animal seen in Regent’s Park), the
seriousness of the allegation to be proved or, in some cases, the consequences
which could follow from acceptance of proof of the relevant fact. The seriousness
of the allegation requires no elaboration: a tribunal of fact will look closely
into the facts grounding an allegation of fraud before accepting that it has
been established. The seriousness of consequences is another facet of the same
proposition: if it is alleged that a bank manager has committed a minor
peculation, that could entail very serious consequences for his career, so
making it the less likely that he would risk doing such a thing. These are all
matters of ordinary experience, requiring the application of good sense on the
part of those who have to decide such issues. They do not require a different
standard of proof or a specially cogent standard of evidence, merely
appropriately careful consideration by the tribunal before it is satisfied of
the matter which has to be established.
(emphasis added)
[14]
In the recent decision of the
House of Lords of In re B (Children), [2008] UKHL 35, Lord Hoffmann
stated as follows.
14. Finally, I should say
something about the notion of inherent probabilities. Lord Nicholls said,
in the passage I have already quoted, that —
“the court will have in mind as
a factor, to whatever extent is appropriate in the particular case, that
the more serious the allegation the less likely it is that the event occurred
and, hence, the stronger should be the evidence before the court concludes that
the allegation is established on the balance of probability.”
15. I wish to lay some stress
upon the words I have italicised. Lord Nicholls was not laying down any rule of
law. There is only one rule of law, namely that the occurrence of the fact in
issue must be proved to have been more probable than not. Common sense,
not law, requires that in deciding this question, regard should be had, to
whatever extent appropriate, to inherent probabilities.
(emphasis
added)
[15]
And in the same case Baroness Hale
of Richmond stated as follows.
70. …Neither the seriousness of
the allegation nor the seriousness of the consequences should make any
difference to the standard of proof to be applied in determining the facts. The
inherent probabilities are simply something to be taken into account, where
relevant, in deciding where the truth lies.
(emphasis added)
[16]
It seems to me that these cases
are consistent and the issue in a civil case (which will include the current
appeal) will be whether the evidence as presented is sufficient to satisfy the
trier of fact, on a balance of probabilities, that the person who has the burden
of proof has established what is required of him or her. In analyzing the proof
or evidence that has been presented, the probability or improbability of the
event that is in issue is a factor that can be taken into account in this
analysis. The more improbable the event the stronger the evidence that would be
required. Conversely it would also seem to me that a person may be able to
establish, on a balance of probabilities, that a highly probable event occurred
based on weaker evidence than would be required to establish that an improbable
event had occurred.
[17]
In this particular case, the
Respondent did not dispute that Lescom Investments Ltd. was in financial
trouble, or that it ceased operations in 2000 as result of The TDL Group Ltd.
reacquiring the franchise and the other operating assets. That a shareholder
would be required to provide initial capital to a new company that is acquiring
a franchise for approximately $350,000 and additional capital if that company
is in financial trouble, is a highly probable event. Therefore it seems logical
that the level of evidence required of the Appellant to establish that he was
owed $38,011 (which is slightly less than 11% of the cost of the franchise
without taking into account the working capital requirements of the company) by
Lescom Investments Limited would be less than if the event was improbable.
[18]
In this case the Appellant and his
mother (who lent him $24,000) testified and there were additional documents
that supported the claim being made by the Appellant. The loan application
documents related to the refinancing arranged by the Appellant’s mother
indicated that the amount that she borrowed from Canada Trust was split
into two separate parts.
[19]
Counsel for the Respondent had
submitted that the Appellant had not produced any documentation to show that
the net amount borrowed ($22,850) by the Appellant’s mother from Canada Trust
was lent by her to the Appellant and then advanced by him to the company. The
advance of the funds to the company was arranged through the lawyer’s office
who arranged the financing. His office burned and his records were destroyed.
While there was no written loan agreement between the Appellant and his mother,
I accept their oral testimony that she was borrowing this amount from Canada
Trust to lend to the Appellant so that he could lend this money to the company.
It is not an improbable event that a mother would lend her son money if he
needed the money and not document the loan with a written loan agreement.
[20]
The General Ledger for the company
also confirmed that the Appellant had advanced $22,850 to the company in 1997.
In my opinion, since there was no contradictory evidence and since the
advancing of funds to a company in financial trouble by its shareholder is a
highly probable event and since it is also highly probable that the Appellant’s
mother would help her son, the Appellant should succeed in this case based on
the testimony of the Appellant and his mother and the general ledger records.
In my opinion, this is sufficient to establish, on a balance of probabilities,
that the Appellant’s mother borrowed $24,000 from Canada Trust and lent this
amount to the Appellant and that $22,580 of this amount was advanced by the
Appellant to the company in 1997.
[21]
There were also additional amounts
that the Appellant had stated were advanced by him to the company. There was an
initial advance of $5,800 that the Appellant stated that he had borrowed from
the Royal Bank. There was also the sum of $12,500 (comprised of two amounts of
$5,000 each and a separate advance of $2,500) that the Appellant stated that he
had borrowed from the credit union after he had advanced the money he received
from his mother and before the company ceased operations.
[22]
The balance sheet of the company
stated that the outstanding shareholder loans were $152,818 after the company
ceased operation. The General Ledger in detail for the Appellant’s shareholder’s
loan (taking into account the handwritten adjustment of $139.08) indicated that
the Appellant was owed $28,510.92 as of the end of September 1997 which was
determined as follows:
JE # 163 03/03/97 $5,800
JE # 172 23/03/97 $22,850
Hand written adjustment: ($139.08)
Net Amount: $28,510.92
[23]
The shareholder loan account
statement for the fiscal year of Lescom Investments Limited ending
September 30, 1998 indicated that the Appellant was then owed $25,510.92 as a
result of a repayment to him of $3,000. The journal entries posted in 2000 were
also introduced and these entries indicated that the Appellant advanced an
additional $12,500 that would not have been reflected in the balance indicated
as of September 30, 1998. Although the dates of the journal entries do not
correspond to the dates that the Appellant indicated that he advanced funds to
the company, these entries do confirm the amounts that were advanced and it is
plausible that a company that is in financial trouble may not be as diligent about
documenting shareholder advances as it should be.
[24]
The Appellant also had copies of
the loan applications for loans that the Appellant had received from the credit
union but he did not have any documentation related to the amount that he had borrowed
from the Royal Bank to fund his initial advance to the company. In the loan
documentation related to the credit union loans, the amounts identified as the
amounts borrowed were not equal to the amounts that the Appellant stated were
advanced by him to the company and the purpose for the loans did not reveal
that the Appellant would be lending the money to Lescom Investments Limited.
The Appellant was borrowing money from the credit union for other purposes
which would explain why the amount on the loan form would not be equal to the
amount that the Appellant lent to the company. The Appellant also stated that
it was his understanding that the credit union would not have lent him money if
the stated purpose was to allow the Appellant to lend money to Lescom
Investments Limited. Therefore in some of the credit union loan application
forms the generic term “miscellaneous” is used to describe the purpose for the
loan. The Appellant is also not certain whether all of the loan application
forms have been submitted into evidence.
[25]
In my opinion the Appellant has
introduced sufficient evidence for him to establish, on the balance of
probabilities, that he advanced the $5,800 and the $12,500 (in addition to the
$22,850 that is referred to above) to the company. As noted the inherent
probability that a shareholder would be required to provide initial capital to
a new company and additional capital to a company that is in financial trouble
is very high. These amounts are also relatively small amounts in comparison to
an initial franchise cost of approximately $350,000, which would not take into
account any working capital requirements.
[26]
As a result I find that the Appellant
had advanced the following amounts to Lescom Investments Limited prior to June
30, 2000:
|
Source of Funds
|
Amount
|
|
Borrowed
from the Royal Bank
|
$5,800
|
|
Borrowed
from the Appellant’s mother
|
$22,850
|
|
Borrowed
from the Credit Union
|
$5,000
|
|
Borrowed
from the Credit Union
|
$5,000
|
|
Borrowed
from the Credit Union
|
$2,500
|
|
Total:
|
$41,150
|
[27]
The General Ledger also indicates
that an adjustment of $139.08 in 1997 reduced the amount outstanding to the
Appellant and that $3,000 was repaid to the Appellant in 1998. The Appellant
could not explain these adjustments and therefore they will remain as
adjustments to the amount outstanding. As a result, the amount that would be
payable by the company to the Appellant as of June 30, 2000 would be:
|
Item
|
Amount
|
|
Total
amount advanced by the Appellant
|
$41,150
|
|
Less:
adjustment in 1997:
|
($139)
|
|
Less:
amount repaid in 1998
|
($3,000)
|
|
Net
amount owing to the Appellant:
|
$38,011
|
[28]
As a result, I find that the
amount of the debt owing by Lescom Investments Limited to the Appellant as of June
30, 2000 was $38,011. As noted above, the Respondent does not dispute that any
amount that was owing to the Appellant by Lescom Investments Limited would be a
business investment loss since the Appellant was a shareholder of Lescom
Investments Limited (and therefore the amounts would have been advanced by him
to this company to earn income) and since the debt would have become a bad debt
after the company ceased operations in 2000. However, the Respondent submitted
that the allowable business investment loss should only be one-half and not two-thirds
of the amount of the debt.
[29]
Subsection 50(1) of the Income
Tax Act provides, in part, as follows:
50. (1) For
the purposes of this subdivision, where
(a) a debt
owing to a taxpayer at the end of a taxation year (other than a debt owing to
the taxpayer in respect of the disposition of personal-use property) is
established by the taxpayer to have become a bad debt in the year, or
…
and the
taxpayer elects in the taxpayer's return of income for the year to have this
subsection apply in respect of the debt or the share, as the case may be, the
taxpayer shall be deemed to have disposed of the debt or the share, as
the case may be, at the end of the year for proceeds equal to nil
and to have reacquired it immediately after the end of the year at a cost equal
to nil.
(emphasis
added)
[30]
This subsection applies when a
taxpayer establishes that a debt owing to such taxpayer at the end of the
taxation year is a bad debt. In this case since the Appellant is claiming the
allowable business investment loss, it is the Appellant who established that the
amount owing to him by Lescom Investments Limited at the end of his 2000
taxation year had become a bad debt in 2000.
[31]
Therefore the Appellant was deemed
on December 31, 2000 to have disposed of the debt owing to him at the end of
his 2000 taxation year for the purposes of determining the amount of his
business investment loss for the purposes of the Income Tax Act. During
the year 2000, the rate applied to a business investment loss to determine the
allowable business investment loss changed from three‑quarters to
two-thirds of the business investment loss and then from two‑thirds to
one-half of the business investment loss. On December 31, 2000 an allowable business
investment loss was one‑half of the business investment loss. Since the
deemed disposition of the debt owing to the Appellant by Lescom Investments
Limited did not occur until December 31, 2000, the allowable business
investment loss is equal to one-half of the business investment loss and this
is not affected by any of the grandfathering provisions found in subsection
22(5) of SC2001, c. 17. Therefore the Appellant’s allowable business investment
loss for 2000 will be one-half of $38,011 which is $19,005.
[32]
As a result the appeal is allowed,
with costs fixed at $600, and the matter is referred back to the Minister of
National Revenue for reconsideration and reassessment on the basis that the
Appellant is entitled to claim an allowable business investment loss of $19,005
in the year 2000.
Signed at Ottawa, Ontario, this 16th day of September 2008.
“Wyman W. Webb”
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