Date: 19990430
Docket: A-7-98
CORAM: THE CHIEF JUSTICE
STONE, J.A.
DESJARDINS, J.A.
BETWEEN:
DOUGLAS B. SPENCER
Applicant
- and -
HER MAJESTY THE QUEEN
Respondent
HEARD at Toronto, Ontario, Friday, April 30, 1999.
JUDGMENT delivered at Toronto, Ontario, Friday, April 30, 1999.
REASONS FOR JUDGMENT OF THE COURT BY: STONE J.A.
Date: 19990430
Docket: A-7-98
CORAM: THE CHIEF JUSTICE
STONE, J.A.
DESJARDINS, J.A.
BETWEEN:
DOUGLAS B. SPENCER
Applicant
- and -
HER MAJESTY THE QUEEN
Respondent
REASONS FOR JUDGMENT OF THE COURT
(Delivered from the Bench at Toronto, Ontario
on Friday, April 30, 1999)
STONE J.A.
[1] This is an application under section 28 of the Federal Court Act to review and set aside a judgment of Rowe DJTCC of November 28, 1997, rejecting the applicant"s appeals from assessments for the taxation years 1992, 1993 and 1994 on the ground that the business losses which the applicant sought to deduct in those years arose out of activities in respect of which he had no reasonable expectation of profit. These activities consisted of producing travel videos for possible future presentation on television.
[2] The learned Tax Court Judge found as a fact1:
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In 1992 through 1994, he was working full-time with the Attorney General"s department of Ontario in a position which required him to work hard during the day and also to have other commitments, on occasion, in the evenings. |
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He began filming during a two week holiday in the summer or other times and then, as his holiday entitlement expanded up to five weeks, he began utilizing five weeks of his time to travel to these various locations and to undertake the necessary film work. |
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He also found that these activities were lacking in adequate funding and that no income has been generated since the inception of the concept in 1988 up until the date of the hearing before him in November 1997. The Court also noted that many of the expenses claimed "were specifically prohibited" by the provisions of the Income Tax Act . |
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[3] Although the Tax Court Judge considered that the applicant was entitled to a start-up period to establish the intended business, he was equally of the view such a period "cannot last forever". As he found in his reasons2: |
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The difficulty is to determine when that period actually starts. And, in this particular instance this business is such that, as the appellant put it, it requires all of the pieces of the jigsaw puzzle to come together. It is a difficult venture made more difficult by the fact that he is working full time and needs to find about 100 and some thousand dollars, or more, in order to do the necessary post-production work to make these [the videos] saleable. |
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[4] In our view, the applicant has failed to demonstrate that the Tax Court erred in any way that would warrant the intervention of this Court. Accordingly, the section 28 application will be dismissed. |
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FEDERAL COURT OF CANADA
Names of Counsel and Solicitors of Record
DOCKET: A-7-98
STYLE OF CAUSE: DOUGLAS SPENCER
Applicant
HER MAJESTY THE QUEEN
Respondent
DATE OF HEARING: FRIDAY, APRIL 30, 1999
PLACE OF HEARING: TORONTO, ONTARIO
REASONS FOR JUDGMENT
| OF THE COURT BY: STONE J.A. |
Delivered at Toronto, Ontario
on Friday, April 30, 1999
APPEARANCES: Mr. Douglas Spencer
Ms. Marie-Thérèse Boris
For the Respondent
| SOLICITORS OF RECORD: Douglas Spencer |
41 Hambly Avenue
Toronto, Ontario
M4E 2R6
Morris Rosenberg
Deputy Attorney General
For the Respondent
FEDERAL COURT OF APPEAL
Date: 19990430
Docket: A-7-98
BETWEEN:
DOUGLAS SPENCER
Appellant
- and -
Respondent
REASONS FOR JUDGMENT
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1 Reasons for Judgment, at p. 4.
2 Reasons for Judgment, at p. 11.
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