Teskey,
T.C.J.:
—The
appellant
appeals
his
1981
income
reassessment
dated
June
6,
1986
as
confirmed
on
June
1,
1987.
Issues
The
appellant
transferred
15
shares
of
RAWL
Developments
Ltd.
(RAWL)
and
his
shareholder's
loan
in
a
non-arm's
length
transaction
to
Johnson
Engineering
and
Management
Services
Ltd.
(Engineering).
The
Court
must
determine:
1.
the
date
of
the
transfer,
2.
the
value
of
the
shareholder's
loan,
and
3.
were
penalties
properly
assessed.
Date
Of
Transfer
The
appellant
alleged
that
the
shares
of
RAWL
and
his
shareholder's
loan
were
transferred
in
October
of
1980.
The
date
of
transfer
is
relevant
as
the
value
of
the
project
(hence
the
value
of
the
shareholder's
loans)
started
to
fall
dramatically
as
the
year
1981
progressed.
The
appellant
owned
15
shares
of
RAWL,
a
private
company.
The
total
shares
issued
and
outstanding
were
100.
There
were
on
June
1,
1979,
three
shareholders
who
each
had
paid
$1
for
their
shares
and
had
loaned
to
RAWL
a
total
of
$1,000,000
by
way
of
shareholder
loans.
The
appellant
had
loaned
to
RAWL
$318,000.
In
1979,
RAWL
purchased
the
old
Drake
Hotel
in
Regina.
The
basement,
main
and
first
floors
were
converted
into
a
shopping
and
office
complex;
the
second,
third
and
top
floors
were
renovated
into
56
large
hotel
rooms.
On
October
31,
1980,
the
appellant
and
Engineering
(a
company
owned
50
per
cent
by
the
appellant
and
50
per
cent
by
his
wife)
switched
their
banking
from
the
Bank
of
Montreal
to
the
Royal
Bank
of
Canada.
At
this
time,
the
appellant
alleges
he
transferred
his
15
shares
and
his
$318,000
shareholder's
loan
to
Engineering.
Engineering
paid
off
the
appellant's
personal
loan
of
$300,000
at
the
Bank
of
Montreal,
thus
making
Engineering
a
creditor
of
the
appellant.
The
Court
heard
a
great
deal
of
evidence
and
received
a
great
number
of
exhibits,
some
of
which
are
highly
suspect
and
some
of
which
the
Court
can
accept,
the
others
the
Court
must
reject.
Since
the
transfer
of
the
shares
and
the
shareholder's
loan
was
not
arm's
length,
the
Court
must
deal
with
the
evidence
in
the
same
fashion
as
it
would
in
a
typical
trading
case.
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.
It
was
particularly
incumbent
on
the
appellant
and
Engineering
to
have
prepared
and
completed
all
necessary
corporate
documents
at
the
appropriate
time
and
in
good
fashion
to
confirm
their
stated
intentions.
The
respondent
in
his
reply
assumed
that
the
transfer
took
place
on
December^,
1981.
The
best
evidence
presented
to
the
Court
came
through
Kim
Thorson,
a
Saskatchewan
solicitor
practising
in
Regina.
As
expected,
he
stated
that
he
did
not
remember
the
details
of
the
transactions
but
that
he
did
have
his
file
and
he
knew
that
it
was
accurate.
The
file
was
made
Exhibit
A-23.
From
his
hand-
written
notes,
it
becomes
evident
that
there
was
an
additional
shareholder's
loan
of
$400,000
advanced
to
RAWL
by
another
shareholder
on
September
1,
1980
and
that
there
were
further
advances
to
RAWL
on
March
16,
1981
which
then
raised
the
total
of
the
shareholder's
loans
to
$1,700,000.
The
statement
and
balance
sheet
of
RAWL
as
of
June
30,
1981
showed
that
between
March
16,
1981
and
June
30,
1981
there
were
additional
shareholder's
loans
which
further
raised
the
total
to
$1,993,945.
Also
on
that
statement
it
shows
that
a
second
mortgage
had
been
placed
on
the
property
for
$600,000.
The
solicitor's
note
indicates
that
this
second
mortgage
of
$600,000
which
bore
interest
at
the
rate
of
20
per
cent
per
annum
went
on
prior
to
September
1,
1980.
The
handwritten
note
of
solicitor
Thorson
is
the
most
reliable
evidence
the
Court
has.
In
a
handwritten
note
made
December
18,
1981,
Thorson
received
instructions
concerning
the
error
in
the
issuance
of
share
certificate
number
10
for
15
shares
of
RAWL
in
favour
of
Johnson
Engineering
and
Management
Ltd.
He
testified
that
he
wrote
“issued
in
error"
on
that
certificate.
He
also
said
that
Exhibit
A-7
which
purports
to
be
RAWL
share
certificate
number
10
for
15
shares
dated
March
31,
1981
in
favour
of
Engineering
was
not
a
certificate
that
their
office
would
use,
and
when
the
shares
were
transferred
from
the
appellant
to
Engineering
has
to
be
a
mystery.
It
is
common
ground
that
the
shares
had
a
nominal
value,
the
date
of
the
transfer
is
immaterial
except
that
it
is
probably
the
same
date
as
the
transfer
of
the
shareholder's
loan.
Presented
to
the
Court
was
a
document
that
purports
to
be
minutes
of
a
meeting
of
the
shareholders
of
Engineering
dated
April
10,
1981.
The
solicitor
did
not
prepare
these
minutes.
The
minutes
are
signed
by
E.
Johnson,
but
were
not
certified
by
the
secretary
with
the
corporate
seal
of
Engineering
affixed
thereto.
This
document
was
obviously
prepared
by
a
lay
person
and
reads
as
follows:
Minutes
Of
Meeting
Johnson
Engineering
&
Management
Services
Ltd.
April
10,
1981
A
meeting
of
the
Shareholders
of
Johnson
Engineering
&
Management
Services
Ltd.,
was
held
at
#205—4401
Albert
Street,
Regina,
Saskatchewan.
All
shareholders
were
present,
namely,
L.V.
Johnson,
President
E.
Johnson,
Secretary
Treasurer.
L.V.
Johnson
chaired
the
meeting
and
E.
Johnson
was
secretary.
The
following
business
was
dealt
with:
Purchase
of
15
shares
in
RAWL
Developments
Ltd.,
held
by
L.V.
Johnson.
1.
Moved
by
Eva
Johnson
and
seconded
by
Lloyd
Johnson,
that
the
above
purchase
of
15
shares
be
approved.
2.
Moved
by
Eva
Johnson
and
seconded
by
Lloyd
Johnson
that:
(a)
Johnson
Engineering
&
Management
Services
Ltd.,
assume
the
Shareholder's
Loans
of
L.V.
Johnson
in
RAWL
at
book
value
as
of
April
1,
1981
and
pay
L.V.
Johnson
the
amount.
The
book
value
of
the
Shareholder's
Loans
was
agreed
at
$300,000.
(b)
Johnson
Engineering
shall
pay
L.V.
Johnson
interest
on
the
outstanding
balance
of
the
Shareholder's
Loans
at
Royal
Bank
prime
plus
one
percent
until
the
loan
was
paid.
This
was
equal
to
the
interest
being
paid
by
L.V.
Johnson
on
his
personal
bank
loan
for
the
Shareholder's
Loans.
(c)
Johnson
Engineering
and
Management
Services
Ltd.,
would
pay
the
outstanding
balance
on
or
before
December
31,
1981,
including
the
interest.
3.
Moved
by
Eva
Johnson
and
seconded
by
Lloyd
Johnson
that
an
agreement
would
be
prepared
by
the
Solicitors
for
L.V.
Johnson
to
incorporate
the
minutes
of
this
meeting
into
the
Sales
Agreement
on
or
before
the
date
Johnson
Engineering
&
Management
Services
Ltd.,
pays
the
outstanding
balance
of
the
Shareholder's
Loans,
plus
interest
to
L.V.
Johnson.
There
being
no
further
business,
the
meeting
was
adjourned
at
2:30
p.m.
The
face
value
of
the
Johnson's
shareholder
loan
as
of
August
18,
1980
from
solicitor
Thorson's
notes
was
$318,000.
Whoever
typed
up
this
document
did
not
use
the
correct
amount
of
the
loan
nor
the
correct
terminology
as
the
company
had
to
purchase
from
the
appellant
and
receive
an
assignment
of
the
loan.
Up
to
December
1981,
there
is
nothing
in
writing
signed
by
or
binding
on
Johnson
and/or
Engineering
agreeing
to
the
assignment
or
purchase
of
this
chose-in-action.
The
appellant
borrowed
from
the
Royal
Bank
on
March
27,
1981
$300,000
and
paid
the
same
on
the
same
day
to
Engineering
so
that
his
indebtedness
would
not
show
on
the
financial
statement
of
Engineering
for
its
year-end
March
31,
1981.
On
December
16,
1981,
Engineering
paid
to
the
Royal
Bank,
on
behalf
of
Lloyd
Johnson,
the
$300,000
that
had
been
borrowed
and
the
$18,000
interest
that
had
accumulated
on
the
borrowing
from
March
27,
1981
to
December
16,
1981;
Exhibit
R-4
is
the
demand
note
that
the
appellant
gave
to
the
Royal
Bank
which
shows
account
5695705
and
the
top
part
of
Exhibit
R-3
shows
interest
on
account
5695705
individual
Lloyd
Johnson.
This
is
the
first
point
in
time
where
there
is
any
reliable
written
document
supporting
Engineering's
alleged
intention
to
purchase
the
shareholder's
loan
at
$300,000.
It
paid
for
the
shareholder's
loan
on
December
15,
1981.
Solicitor
Thorson's
handwritten
memo
dated
December
21,
1981
shows
when
he
received
instructions
to
do
the
documentation
transferring
the
shareholder's
loan
from
the
appellant
to
Engineering.
On
July
12,
1982,
solicitor
Thorson
sent
to
Mr.
Johnson
a
confirmation
of
assignment
in
triplicate
and
a
document
dated
December
22,
1981.
The
confirmation
of
assignment
which
is
Exhibit
A-9
is
purported
to
be
signed
on
January
6,
1982
by
the
appellant,
Engineering
and
RAWL.
However,
we
know
that
the
solicitor
sent
that
document
to
his
client
unsigned
on
July
12,
1982.
Therefore
the
parties
deliberately
inserted
the
wrong
date
of
signing
the
confirmation
of
assignment.
The
agreement
that
solicitor
Thorson
sent
out
by
letter
on
July
12,
states
that
he
dated
the
agreement
December
22,
1981
because
that
was
the
date
he
had
received
instructions.
A
third
party
purusing
that
document
would
be
led
to
believe
it
was
signed
on
December
22,
1981
when
in
fact
it
was
not
signed
until
some
time
after
July
12,
1982
even
though
the
agreement
says
signed,
sealed
and
delivered
as
of
the
date
first
written
above”.
This
agreement
in
the
second
recital
says:
"And
Whereas
on
December
12,
1981
the
vendor
assigned
and
transferred
to
the
purchaser
the
right
to
collect
a
shareholder's
loan
from
RAWL
Developments
Ltd.
in
the
principal
amount
of
$300,000.”
In
view
of
the
conflicting
evidence
and
the
less
than
satisfactory
documentation,
the
appellant
has
not
met
the
onus
of
disproving
that
the
transfer
took
place
other
than
on
December
16,
1981
or
that
it
took
place
on
a
date
substantially
prior
to
December
1981.
Value
Of
Loans
The
respondent
in
his
reply
assumes
that
at
the
time
of
the
transfer
the
fair
market
value
of
the
shareholder's
loan
was
nil.
At
trial,
the
respondent
called
Edward
Klymchuk,
a
real
estate
appraiser.
It
was
his
opinion
that
the
market
value
of
the
property
on
December
12,
1981
was
$1,767,000.
Since
the
mortgage
loans
against
the
properties
at
that
time
were
$2,800,000,
the
shareholder's
loan
would
then
be
worthless.
The
appellant
called
Terry
M.
Fox,
a
real
estate
appraiser.
It
was
his
opinion
that
if
you
determined
the
market
value
of
the
property
on
the
cost
approach,
it
would
be
$4,994,000
and
if
you
used
the
income
approach,
it
would
be
$3,387,466.
He
argued
on
the
basis
of
the
cost
approach
that
the
shareholder's
loan
had
full
value
and
alternatively
if
the
Court
found
the
market
value
to
be
less
than
the
total
amount
of
all
shareholder's
loans
and
mortgages,
then
the
appellant's
shareholder's
loan
should
be
prorated
against
the
lower
value
after
subtracting
the
mortgage
debt
of
$2,800,000.
One
of
the
problems
with
Klymchuk's
appraisal
is
that
it
was
done
many
years
after
the
fact.
Since
the
project
was
unique
to
Regina
in
that
it
was
combining
commercial
with
hotel
rooms,
comparables
do
not
really
apply.
The
cost
approach
of
a
commercial
project
may
also
lead
to
a
wrong
conclusion
as
to
value.
If
the
Toronto
Sky
Dome
was
built
in
Moosonee
although
the
cost
may
exceed
$500,000,000
it
would
be
virtually
worthless
in
the
private
market
the
day
after
completion.
The
principals
and
the
mortgage
holders
had
invested
a
total
of
$4,794,000
into
the
project.
Obviously,
they,
in
1980
and
in
the
first
part
of
1981
had
faith
in
its
economic
viability.
Normally
developers
of
commercial
projects
do
not
pour
their
own
money
into
a
project
to
lose
it.
They
obviously
felt
that
this
project
made
sense
and
the
income
therefrom
would
give
them
a
good
return
on
their
investment.
The
income
from
the
project,
of
course,
would
be
predicated
on
successfully
leasing
the
commercial
units
and
the
percentage
of
occupancy
of
the
56
hotel
rooms
rented
at
a
rate
to
produce
the
required
income.
At
the
commencement
of
commercial
projects,
there
is
a
bloom
of
expectancy
that
may
or
may
not
prove
to
be
realistic.
The
Court
can
assume
that
there
was
one
independent
appraisal
of
the
project
that
must
have
been
done,
that
is,
by
Investors
Syndicate
Realty
Ltd.
(Investors)
the
first
mortgagee
who
is
a
sophisticated
commercial
money
lender.
It
originally
on
April
11,
1980,
agreed
to
lend
$3,650,000.
This
commitment
was
reduced
downward
on
three
occasions.
Finally
a
revised
commitment
dated
February
23,
1981
stated
that
the
loan
would
only
be
in
the
amount
of
$2,500,000
with
an
advance
of
only
$2,200,000
and
the
final
$300,000
to
be
advanced
only
when
it
could
be
demonstrated
the
hotel
was
producing
an
annualized
projected
net
profit
of
$200,000.
Annualized
projection
was
defined
as
the
projection
of
any
period
of
operation
of
three
months
or
longer
projected
to
a
12-month
period.
RAWL
was
unable
to
demonstrate
this
and
on
November
20,
1981
the
mortgage
loan
was
closed
off
at
$2,200,000.
In
April
1980,
Investors
real
estate
appraiser
and
Mortgage
Managers
must
have
come
to
the
conclusion
that
the
project
on
completion
would
have
a
market
value
in
excess
of
$5,000,000.
It
appears
apparent
that
as
interest
rates
rose
and
the
economy
turned
down,
Investors’
evaluation
was
scaled
down.
However,
it
must
have
believed
that
advancing
$2,200,000
without
the
required
revenue
being
demonstrated
as
required
by
its
February
23,
1981
revised
commitment
letter
made
sound
business
sense
and
that
the
value
of
the
project
would
still
be
approximately
$3,700,000.
By
November
20,
1981
when
the
mortgage
loan
was
closed
off
at
$2,200,000,
the
hotel
had
a
short
track
record
which
originally
exceeded
expectation
but
as
the
fall
came
the
original
expectations
were
proving
to
be
over
optimistic.
Having
made
these
assumptions,
the
Court
must
look
carefully
at
Klymchuk's
evidence
as
given
at
trial
and
his
report.
The
Court
is
drawn
to
the
conclusion
that
he
must
have
been
influenced
by
the
benefit
of
hindsight.
He
knew
that
the
project
was
a
commercial
disaster.
Although
his
appraisal
with
the
benefit
of
hindsight
appears
to
be
accurate,
the
Court
is
convinced
that
the
market
value
of
the
project
on
December
16,1981
would
have
been
substantially
higher.
If
an
appraiser
was
hired
on
December
1,
1981
to
prepare
an
appraisal
of
the
property
as
of
December
16,
1981,
he
would
have
had
to
combine
all
three
components
of
appraising
commercial
properties,
that
is
by
using
reasonable
comparables
subject
to
adjustment,
cost
analysis
and
income.
In
order
to
give
the
income
approach
the
proper
weight,
certain
assumptions
would
have
to
be
made.
The
Court
is
satisfied
that
because
of
the
fall-off
of
occupancy
during
the
months
of
October
and
November
in
1981
that
it
would
have
been
apparent
that
the
project
was
not
worth
what
had
been
invested
into
it.
A
bona
fide
third
party
purchaser
for
value
on
December
16,
1981
would
have
set
his
purchase
price
primarily
on
an
income
basis.
He
would
have
had
to:
1.
estimate
gross
income,
2.
estimate
expenses,
and
3.
calculate
net
income
and
capitalize
it
at
an
appropriate
rate
to
arrive
at
the
capital
value
of
the
property.
As
the
property
was
not
for
sale
or
sold
at
that
time,
the
Court
must
perform
these
functions
using
the
evidence
that
was
only
available
in
the
first
two
weeks
of
December
1981.
The
decision
of
Investors
in
late
November
1981
supports
and
lends
valuable
weight
to
the
valuation
of
Terry
Fox
who
sets
the
value
at
$3,387,466.
The
Court
is
satisfied
that
this
figure
is
as
accurate
as
could
possibly
be
arrived
at
back
in
December
1981
and
therefore
finds
the
value
of
the
property
as
of
December
16,
1981
to
be
$3,387,466.
Since
as
of
that
date
the
mortgage
debt
totalled
$2,800,000,
the
total
value
of
the
shareholder
loans
would
be
($3,387,466
-
$2,800,000
=)
$587,466.
The
appellant’s
loan
therefore
had
a
prorated
value
of
$91,331.23.
Penalties
Subsection
163(2)
of
the
Income
Tax
Act,
R.S.C.
1952,
c.
148
(am.
S.C.
1970-71-72,
c.
63)
(the
'Act")
is
the
penalty
provision
and
it
reads:
(2)
Every
person
who,
knowingly,
or
under
circumstances
amounting
to
gross
negligence
in
the
carrying
out
of
any
duty
or
obligation
imposed
by
or
under
this
Act,
has
made
or
has
participated
in,
assented
to
or
acquiesced
in
the
making
of,
a
false
statement
or
omission
in
a
return,
form,
certificate,
statement
or
answer
(in
this
section
referred
to
as
a
"return")
filed
or
made
in
respect
of
a
taxation
year
as
required
by
or
under
this
Act
or
a
regulation
is
liable
to
a
penalty
of
Subsection
163(2)
places
the
burden
of
establishing
facts
justifying
the
assessment
of
a
penalty
onto
the
Minister.
The
idea
to
transfer
the
interest
in
RAWL
to
Engineering
was
conceived
by
Johnson's
accountant.
There
is
no
evidence
whatsoever
to
the
effect
that
the
accountant
knew
or
even
suspected
that
the
project
was
worth
anything
less
than
what
moneys
had
been
invested
in
it.
The
appellant
alleges
that
the
shareholder's
loan
was
transferred
in
October
1980.
At
that
point
in
time
the
appellant
should
have
had
suspicions
that
the
project
was
not
as
viable
as
Originally
contemplated.
However,
it
is
quite
reasonable
at
that
time
for
Johnson
to
entirely
blame
the
lowering
of
the
mortgage
amount
by
Investors
on
the
conservatism
of
Investors
and
the
rising
of
interest
rates.
By
December
1981,
Johnson
should
have
realized
that
the
loans
were
not
worth
full
value.
He
also
should
have
realized
when
the
tax
returns
were
signed
that
the
loan
was
transferred
at
full
value
and
at
least
questioned
his
accountant
on
this.
The
question
to
be
determined
is:
Does
Johnson's
conduct
as
described
fall
within
the
provisions
of
subsection
162(3)?
Cattanach,
J.
of
the
Exchequer
Court
in
Udell
v.
M.N.R.,
[1969]
C.T.C.
704;
70
D.T.C.
6019
at
713-14
(D.T.C.
6025-26)
said:
Accordingly
there
remains
the
question
of
whether
or
not
section
56(2)
contemplates
that
the
gross
negligence
of
the
appellant's
agent,
the
professional
accountant,
can
be
attributed
to
the
appellant.
Each
of
the
verbs
in
the
language
"participated
in,
assented
to
or
acquiesced
in”
connotes
an
element
of
knowledge
on
the
part
of
the
principal
and
that
there
must
be
concurrence
of
the
principal's
will
to
the
act
or
omission
of
his
agent,
or
a
tacit
and
silent
concurrence
therein.
The
other
verb
used
in
section
56(2)
is
"has
made".
The
question
therefore,
is
whether
the
ordinary
principles
of
agency
would
apply,
that
is,
that
what
one
does
by
an
agent,
one
does
by
himself,
and
the
principal
is
liable
for
the
actions
of
his
agent
purporting
to
act
in
the
scope
of
his
authority
even
though
no
express
command
or
privity
of
the
principal
be
proved.
In
my
view
the
use
of
the
verb
"made"
in
the
context
in
which
it
is
used
also
involves
a
deliberate
and
intentional
consciousness
on
the
part
of
the
principal
to
the
act
done
which
on
the
facts
of
this
case
was
lacking
in
the
appellant.
He
was
not
privy
to
the
gross
negligence
of
his
accountant.
This
is
most
certainly
a
reasonable
interpretation.
I
take
it
to
be
a
clear
rule
of
construction
that
in
the
imposition
of
a
tax
or
a
duty,
and
still
more
of
a
penalty
if
there
be
any
fair
and
reasonable
doubt
the
statute
is
to
be
construed
so
as
to
give
the
party
sought
to
be
charged
the
benefit
of
the
doubt.
Strayer,
J.
of
the
Federal
Court-Trial
Division
in
Venne
v.
The
Queen,
[1984]
C.T.C.
223
;
84
D.T.C.
6247
at
234
(D.T.C.
6256)
said:
"Gross
negligence”
must
be
taken
to
involve
greater
neglect
than
simply
a
failure
to
use
reasonable
care.
It
must
involve
a
high
degree
of
negligence
tantamount
to
intentional
acting,
an
indifference
as
to
whether
the
law
is
complied
with
or
not.
My
sister
Judge
Lamarre
Proulx
in
Boileau
v.
M.N.R.,
[1989]
2
C.T.C.
2001;
89
D.T.C.
247
at
2005-2006
(D.T.C.
250)
said:
I
am,
however
of
the
view
that
subsection
163(3)
does
require
that
the
Minister
produce
some
evidence,
of
satisfactory
composition,
that
the
appellant
knowingly,
or
under
circumstances
amounting
to
gross
negligence,
in
the
carrying
on
of
any
duty
or
obligation
imposed
upon
him,
made
a
false
statement
or
omission
in
a
return.
There
is
no
doubt
that
the
mens
rea
or
the
gross
negligence
may
be
established
by
circumstantial
evidence,
as
either
can
seldom
be
established
by
direct
proof
of
the
taxpayer's
intention.
However,
that
evidence
should
be
clear
and
convincing,
for
example:
the
course
of
conduct
of
the
taxpayer,
what
it
is
that
ought
to
have
been
done
that
was
not
done,
what
led
the
respondent
to
assess
the
penalty,
discussions
that
took
place
with
the
taxpayer
in
respect
of
the
assessment
of
the
penalties
and
other
matters
pertinent
to
the
decision
leading
to
the
assessment
of
the
penalty
under
subsection
163(2).
Keeping
these
judicial
comments
in
mind,
I
do
not
find
that
high
a
degree
of
negligence
on
Johnson's
part.
Granted,
the
appellant
did
not
exercise
the
care
of
a
reasonable
person
and
he
should
have
questioned
the
accountant
before
signing
the
return.
The
respondent
has
failed
to
prove
that
the
appellant
"knowingly"
transferred
the
shareholder's
loan
at
an
improper
value.
The
loan
was
probably
worth
its
face
value
at
the
alleged
date
of
transfer
The
appellant
failed
to
prove
his
alleged
date
of
transfer
because
of
sloppy
incomplete
documentation.
His
whole
conduct
amounts
to
negligence
but
not
gross
negligence.
Decision
For
the
reasons
set
out
above,
the
appeal
is
allowed
in
part
and
the
assessment
is
referred
back
to
the
Minister
for
reconsideration
and
reassess-
ment
on
the
following
basis,
namely,
that:
1.
The
transfer
from
the
appellant
to
Engineering
of
shareholder's
loan
with
RAWL
took
place
on
December
16,
1981.
2.
The
fair
market
value
of
the
shareholder's
loan
on
that
date
was
$91,331.23.
3.
No
penalties
are
to
be
assessed.
At
the
conclusion
of
the
trial,
both
counsel
asked
to
submit
written
argument.
It
was
obvious
that
counsel
for
the
respondent
required
a
copy
of
the
transcript
before
she
could
submit
argument
as
she
had
not
taken
notes
during
the
trial.
The
appellant
has
not
been
successful
to
the
extent
of
50
per
cent,
but
nevertheless
his
win
has
been
substantial
and
there
has
been
considerable
cost
in
preparing
the
written
argument.
If
the
respondent
had
not
agreed
to
the
request
for
written
argument,
I
would
have
insisted
upon
oral
argument.
The
appellant
is
to
have
one-half
of
his
party-and-party
costs
up
to
the
end
of
the
trial
and
his
full
costs
for
the
written
argument.
Appeal
allowed
in
part.
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