Cullen
J.:
—
This
is
a
motion
by
the
plaintiff
under
Rule
324
to
reconsider
the
terms
of
the
pronouncement
of
my
judgement
in
this
matter,
dated
November
30,
1995.
Specifically,
the
plaintiff
requested
that
I
address
the
issue
of
whether
it
can
claim
a
non-
capital
loss
for
the
1982
taxation
year,
carrying
in
back
to
the
1981
taxation
year.
Upon
reading
submissions
and
affidavit
from
counsel
for
the
plaintiff,
I
agree
that
this
matter
was
overlooked
by
the
Court
and
I
will
consider
it
now.
I
am
following
the
interpretation
of
Aallcann
Wood
Suppliers
v.
R.
(sub
nom.
Aallcann
Wood
Suppliers
v.
Canada),
[1994]
2
C.T.C.
2079
(sub
nom.
Aallcann
Wood
Suppliers
Inc.
v.
Her
Majesty
The
Queen),
94
D.T.C.
1475
(T.C.C.),
that
I
expressed
earlier:
the
Court
has
jurisdiction
to
consider
a
nil
assessment
year
where
the
computations
from
the
nil
assessment
year
have
an
actual
impact
on
another
taxation
year.
Accordingly,
the
carry-back
of
a
non-capital
loss
from
1982
(the
nil
assessment
year)
to
1981
is
validly
before
this
Court.
I
found,
and
still
maintain,
that
the
Minister
properly
deemed
interest
to
have
been
received
by
the
plaintiff
in
the
1981
and
1982
taxation
years
pursuant
to
subsection
17(1)
of
the
Income
Tax
Act,
and
that
the
Minister
properly
included
those
amounts
in
the
plaintiff’s
income
for
1981
and
1982
taxation
years
pursuant
to
paragraph
12(1)(c)
of
the
Act.
However,
at
no
time
did
the
plaintiff
actually
receive
payment
from
Tennis
World
to
whom
it
had
loaned
money.
As
both
parties
agree,
when
the
debt
was
deemed
bad
in
1982,
the
plaintiff
was
able
to
write
off
the
outstanding
principal
balance
as
a
capital
loss
in
its
1982
taxation
year.
The
interest
which
had
been
included
in
the
plaintiff
income,
however,
was
not
included
as
part
of
that
capital
loss.
The
plaintiff
is
not
claiming
an
interest
deduction
pursuant
to
paragraph
20(1
)(c)
of
the
Act;
rather,
it
is
seeking
to
declare
the
interest
deemed
to
have
been
received
as
a
bad
debt
expense
pursuant
to
paragraph
20(1
)(p).
If
I
understand
counsel
for
the
plaintiff’s
argument
correctly,
the
plaintiff
was
deemed
to
have
received
income
in
1981
and
1982
that
it
did
not
actually
receive.
When
it
became
clear
that
the
interest
would
not
be
received,
it
became
a
bad
debt
expense.
This
bad
debt
expense
is
simply
a
set-off
against
the
interest
inclusion
made
pursuant
to
subsection
17(1)
and
paragraph
12(1)(C)
of
the
Act.
I
find
the
plaintiff’s
argument
to
be
very
persuasive.
For
example,
if
the
plaintiff
had,
at
some
later
point,
received
the
interest
which
it
had
already
included
in
its
income
for
the
1981
and
1982,
it
would
not
have
had
to
declare
the
interest
as
income
a
second
time.
On
the
other
hand,
when
it
became
clear
that
the
interest
payments
would
not
be
received,
it
is
only
logical
that
the
plaintiff
be
able
to
claim
some
off-setting
amount.
While
the
Minister
was
correct
in
including
in
the
income
of
the
plaintiff
the
interest
on
its
loan
to
Tennis
World,
I
have
decided
that
the
plaintiff
should
also
be
allowed
a
bad
debt
expense
in
respect
of
the
interest
portion
of
the
debt
in
its
1982
taxation
year
as
a
bad
debt
expense.
The
bad
debt
expense
would
increase
the
plaintiff’s
1982
non-capital
loss
available
to
carry
back
and
would
off-set
the
income
inclusion
made
pursuant
to
subsection
17(1)
and
paragraph
12(l)(c)
of
the
Act.
The
plaintiff
will
be
allowed
to
claim
a
bad
debt
expense
in
respect
of
the
interest
portion
of
the
debt
to
Tennis
World
in
its
1982
taxation
year.
Motion
allowed.
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