King,
D.J.T.C.:—The
appellant
is
appealing
from
a
reassessment
for
her
1985
and
1986
taxation
years.
The
appellant,
husband
and
a
friend,
were
involved
in
a
company
called
Global
Habitat
Inc.
in
early
1985.
This
company
along
with
others
was
attempting
to
build
homes
for
the
Malaysian
Government
in
Malaysia.
They
needed
money
and
the
appellant
was
persuaded
to
invest
some
$26,000
in
Global
Habitat
Inc.
shares
in
early
1985
which
yielded
her
in
excess
of
180
thousand
shares.
The
venture
fell
through
due
to
lack
of
financing
and
in
the
fall
of
1985
she
sold
approximately
one
half
of
the
shares
for
$2
and
sold
the
balance
in
1986
for
$2.
The
appellant
claimed
the
loss
in
her
income
tax
returns
for
the
years
1985
and
1986
on
the
basis
that
the
purchase
and
sale
of
the
shares
was
an
adventure
in
the
nature
of
trade
and
thus
the
loss
was
fully
deductible.
The
Department
of
National
Revenue,
on
reassessment
did
not
allow
the
full
business
loss
as
they
stated
that
the
purchase
of
these
shares
and
the
advances
were
outlays
on
account
of
capital.
The
appellant's
husband
had
suffered
some
severe
financial
problems
prior
to
the
appellant
purchasing
these
shares.
She
was
employed
and
found
it
necessary
to
somehow
increase
her
income.
She
became
convinced
that
with
the
purchase
and
resale
of
these
shares
she
could
make
a
fairly
quick
profit.
To
this
end,
she
borrowed
money
to
make
the
purchase.
The
appellant
was
not
in
the
business
of
buying
and
selling
shares.
This
in
effect
was
a
one-shot
effort
to
try
and
alleviate
the
family
financial
problem.
The
Supreme
Court
of
Canada
in
Irrigation
Industries
Ltd.
v.
M.N.R.,
[1962]
S.C.R.
346;
[1962]
C.T.C.
215;
62
D.T.C.
1131
dealt
with
this
question
of
when
a
transaction
is
an
adventure
in
the
nature
of
trade
and
thus
any
losses
being
fully
deductible
for
income
tax
purposes.
Martland,
J.,
in
writing
the
decision
for
the
Court,
stated
as
follows
at
page
219
(D.T.C.
1133):
I
cannot
agree
that
the
question
as
to
whether
or
not
an
isolated
transaction
in
securities
is
to
constitute
an
adventure
in
the
nature
of
trade
can
be
determined
solely
upon
that
basis.
In
my
opinion,
a
person
who
puts
money
into
a
business
enterprise
by
the
purchase
of
the
shares
of
a
company
on
an
isolated
occasion,
and
not
as
a
part
of
his
regular
business,
cannot
be
said
to
have
engaged
in
an
adventure
in
the
nature
of
trade
merely
because
the
purchase
was
speculative
in
that,
at
that
time,
he
did
not
intend
to
hold
the
shares
indefinitely,
but
intended,
if
possible,
to
sell
them
at
a
profit
as
soon
as
he
reasonably
could.
I
think
that
there
must
be
clearer
indications
of
"trade"
than
this
before
it
can
be
said
that
there
has
been
an
adventure
in
the
nature
of
trade.
On
the
facts
in
this
case
it
is
my
opinion
that
the
appellant
in
advancing
the
money
for
the
purchase
of
these
shares
was
making
an
advance
on
account
of
capital.
This
isolated
transaction
does
not
equate
to,
in
law,
an
adventure
in
the
nature
of
trade.
I
am
further
supported
in
my
conclusion
by
the
nature
of
the
subscription
form
signed
by
the
appellant
at
the
time
of
transaction
(Exhibit
R-1).
For
the
above
reasons,
I
dismiss
the
appeal.
Appeal
dismissed.
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