Rowe,
D.J.T.C.C.
(orally):—The
appellant
appeals
with
respect
to
his
1986,
1987
and
1988
taxation
years,
whereby
the
Minister
of
National
Revenue
disallowed
claimed
losses
in
respect
of
the
Medical
Laser
Beams
Partnership.
The
appellant
then
filed
an
amended
notice
of
appeal
abandoning
the
claims
for
the
losses
in
1983
and
1988,
and
restricting
his
claim
to
a
$5000
loss
for
the
1986
taxation
year,
that
amount
being
the
amount
of
his
contribution
in
what
was
known
as
the
Medical
Laser
Beams
Partnership.
In
reassessing
the
appellant
in
disallowing
the
losses,
the
Minister
of
National
Revenue
assumed
certain
facts,
being
that
Medical
Laser
Beams
Partnership
did
not
exist
or
carry
on
business
in
1986,
1987
and
1988,
and
no
business
loss
was
incurred
by
the
partnership.
A
further
assumption
was
that
the
investment
of
the
appellants
funds
went
to
John
Edwards,
the
promoter
of
this
tax
sheltering
scheme,
and
that
Medical
Laser
Beams
U.K.
Ltd.
Laser
Beams
Partnership
did
not
make
any
payment
for
a
franchise
fee
in
the
sum
of
$17,500,000.
The
respondent
further
made
an
assumption
that
no
entity
known
as
Fibre
Optics
Laser
Partnership
existed
or
carried
on
business.
Further,
the
respondent's
position
is
that
the
alleged
expenses
of
the
Medical
Laser
Beams
Partnership,
if
they
were
incurred,
were
not
incurred
to
gain
or
produce
income
from
business
or
property,
and
that
they
were
unreasonable
under
the
circumstances,
and
further,
would
artificially
reduce
the
income
of
the
partnership.
Having
regard
to
the
evidence,
it
is
clear
that
Mr.
Haddow
was
the
victim
of
a
scheme
which
was
perpetrated
by
Mr.
John
Edwards
of
the
City
of
Vancouver.
It
is
clear
on
the
evidence
that
the
Medical
Laser
Beams
Partnership
was
not
a
business
as
defined
by
the
jurisprudence.
It
is
further
clear
on
the
evidence
that
one
cannot
find
as
a
fact
that
the
$17,500,000
franchise
fee
was
paid,
and
further,
in
the
event
that
it
was
paid,
which
I
cannot
conclude,
it
was
unreasonable
having
regard
to
what
was
apparently
obtained
in
consideration
for
it.
The
unfortunate
situation
is
that
the
appellant
was
basically
a
victim
of
a
scam
and
that
he
is
left
in
the
position
of
not
being
able
at
all
to
produce
the
kind
of
evidence
which
has
the
effect
of
discharging
the
onus
on
any
a
pellant
that
is
required,
namely
to
demolish
the
assumptions
of
fact
upon
which
the
reassessments
rest.
We
had
previously
at
the
outset
dismissed
the
appeal
for
the
1987
and
1988
taxation
years
in
accordance
with
the
amended
notice
of
appeal,
and
at
this
time
the
appeal
for
the
appellant's
1986
taxation
year
is
also
dismissed.
Appeal
dismissed.
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