Muldoon,
J.:—The
main
issues
in
this
case
revolve
around
counter-allegations
of
capital
gain
in
the
disposition
of
an
alleged
primary
residence,
and
adventure
in
the
nature
of
trade.
Paragraphs
40(2)(b)
and
54(g)
and
(h)
of
the
Income
Tax
Act
(the
Act)
are
brought
into
play,
and
there
are
ancillary
issues
involving
interpretation
of
the
Condominium
Act,
R.S.B.C.
1979,
Chap.
61,
among
others.
These
issues
are
focussed
on
the
plaintiff's
construction
of
a
strata-title
horizontal,
or
side-by-side,
duplex
on
Point
Grey
Road,
in
Vancouver.
He
sold,
upon
its
being
built,
one
of
the
roughly
equal
two
units
for
$800,000,
thereby
realizing
a
gain
of
$297,394.30.
The
Court
is
requested
to
say
whether
this
sum
ought
to
be
characterized
as
income,
and
whether
it
be
income
in
the
1981
taxation
year.
The
parties
agree
that
the
entire
amount
of
the
gain
is
attributable
to
the
land
of
which
the
plaintiff
made
a
disposition,
and
that
no
portion
of
that
gain
is
attributable
to
the
duplex
building.
In
1979,
the
plaintiff
and
his
wife
were
residentially
occupying
a
splendid
house
and
lot
on
Appian
Way
in
Coquitlam,
British
Columbia.
(Transcript:
pp.
16,
144
&
146.)
That
residence,
with
its
indoor
swimming
pool,
was
too
big
for
a
childless
couple,
took
too
much
effort
to
maintain
the
grounds,
and
was
too
far
removed
from
Mrs.
Johnstone's
friends
who
resided
in
the
metropolis.
(Transcript:
pp.
18
&
144.)
So,
incredible
as
it
may
seem,
after
considerable
casting
about
for
another,
smaller
house,
and
after
narrowly
losing
one
prospective
acceptance
of
the
plaintiff's
offer
to
buy
a
suitable
residence
which
they
erroneously
thought
was
a
solid
transaction,
the
plaintiff
bought
another
big
house
on
a
large
lot
(but
with
a
grand
view
over
the
water)
at
3095
Point
Grey
Road
in
Vancouver.
Mrs.
Johnstone
alluded
to
that
house
as
"huge".
(Transcript:
p.
160.)
If
one
steadfastly
kept
in
mind
the
core
issues
here,
as
well
as
the
Johnstones'
principal
complaints
about
their
residence
on
Appian
Way,
one
would
wonder
how
they
could
be
so
dense
as
jump
out
of
the
frying
pan
and
into
the
fire.
But
they
both
testified
viva
voce
and
they
are
each
far
from
dense.
The
plaintiff
and
Mrs.
Johnstone
gave
convoluted
explanations
for
the
self-infliction
of
this
plight
which
merit
a
brief
recounting
here.
The
Johnstones
had
lived
on
Appian
Way
in
Coquitlam
for
about
five
years.
plaintiff
found
that
residence
to
be
"a
nice
family
home"
with
"a
nice
setting"
and
"very
convenient".
He
was
happy
there,
but
his
wife
would
not
stay
there
any
longer.
She
refused.
(Transcript:
pp.
16
&
144.)
Mrs.
Johnstone
testified
that
the
residence
on
Appian
Way
was
“all
right",
but
she
preferred
Vancouver.
She
said
that
initially
the
idea
was
to
live
there
only
three
years
or
so.
The
plaintiff
testified
that
he
"didn't
catch
on"
until
they
had
lived
there
about
four
years.
They
—
but
mostly
she
—
started
looking
around
for
another
dwelling,
all
throughout
Vancouver,
North
Vancouver
and
West
Vancouver.
Mrs.
Johnstone
was
the
more
aggressive
home
hunter.
She
searched
about,
while
studying
real
estate
weekly
magazines,
in
the
areas
of
Shaughnessy,
Kerrisdale,
University
and
such
areas.
Mrs.
Johnstone
always
liked
Point
Grey
Road
and
such
areas
because
she
felt
at
home
there.
She
said
the
plaintiff
really
did
not
want
to
live
there.
The
plaintiff
corroborated
that
testimony,
saying
that
he
was
not
used
to,
and
did
not
care
for,
the
expensive,
luxurious
kinds
of
houses
in
those
neighbourhoods
to
which
his
wife
aspired.
He
wanted
just
a
reasonable
home,
but
not
a
large
one;
he
said
that
they
didn't
need
a
big
home,
which
he
would
have
to
maintain,
so
he
wanted
a
small
lot.
(Transcript:
p.
18.)
She
wanted
"something
nice”,
with
"a
nice
view”
over
the
water,
and
they
did
not
want
anything
too
big
in
order
that
they
would
feel
more
secure
and
comfortable
to
“leave
it
when
we
go
on
holidays”.
(Transcript:
p.
146.)
The
plaintiff
had
a
limited
budget
in
mind
and
did
not
want
to
pay
a
fortune
for
a
new
house.
The
house
on
Appian
Way
the
plaintiff
testified
was
sold
for
$180,000
to
$190,000.
The
first
lively
prospect
mentioned
by
the
Johnstones
in
their
testimony
was
a
condominium
apartment
in
West
Vancouver.
Indeed,
the
plaintiff
said
he
found
some
nice
features
there,
but
his
wife
did
not
like
them.
Both
spouses
remembered
a
penthouse
condominium
which
the
plaintiff
liked
and
which
he
described
as
a
bargain
at
$90,000
to
$100,000.
He
said
his
wife
would
not
have
it
and
did
not
want
to
live
over
there
because
the
bridge
is
always
jammed
with
traffic.
(Transcript:
p.
79.)
Mrs.
Johnstone
described
this
prospect
as
a
large
condominium
consisting
of
two
penthouses,
with
a
good
view
except
for
the
gasoline
filling
station
below.
She
really
did
not
want
it,
but
looked
at
it
for
her
"husband's
sake”.
They
made
four
trips
over
there,
altogether.
So,
it
appears,
that
a
strata-type
residential
holding
could
have
met
their
needs
and
desires,
if
only
a
suitable
location
could
be
found
which
would
satisfy
Mrs.
Johnstone.
She
was
scouting
Point
Grey
Road
and
it
turned
out
that
there
was
a
nearly
completed
duplex
there
with
at
least
one
unit
then
for
sale.
Mrs.
Johnstone
liked
it.
Mr.
Johnstone
made
an
offer
on
it
for
a
price
which
he
thinks
was
in
the
range
of
$200,000
to
$275,000.
He
made
the
offer
after
only
one
visit
and
because
he
did
not
want
the
contractor
to
"go
cheap
on
the
job”,
he
wanted
to
specify
qualities
of
the
carpets,
the
plumbing
and
the
stove.
The
plaintiff
and
his
wife
thought
that
they
had
bought
that
duplex
unit
but,
in
fact
their
hopes
were
aborted.
At
that,
Mrs.
Johnstone,
as
they
both
testified,
"went
hysterical”,
and
turned
her
fury
upon
the
plaintiff.
Then,
two
weeks
later
according
to
the
plaintiff,
or
a
few
days
later
according
to
Mrs.
Johnstone,
the
same
real
estate
agent
announced
the
availability
for
sale
of
the
subject
property
at
3095
Point
Grey
Road,
at
the
corner
of
Blaclava.
Mrs.
Johnstone
described
the
house
which
then
stood
there
as
an
older
house
which
"needed
fixing”.
It
offered
a
"spectacular
view”.
The
plaintiff
described
the
house
as
a
“small,
cute
house"
(transcript:
pp.
22
&
23),
but
the
plan
included
in
Exhibit
4
on
the
scale
of
1"
=
2’,
indicates
a
house
whose
outside
dimensions
are
approximately
70
feet
by
70
feet.
It
was
a
two-storey
structure
with
many
little
rooms
upstairs,
which
Mrs.
Johnstone
described
more
accurately
as
a
fairly
large
even
"huge"
home
on
a
90-foot
waterfront
lot.
(Transcript:
p.
160,
lines
12-14.)
Cute
it
might
have
been,
but
small
it
was
not.
According
to
the
plaintiff
that
was
the
house
his
wife
just
had
to
have,
that
house
at
3095
Point
Grey
Road.
(Transcript:
p.
23.)
Now
on
the
innocent
face
of
it,
that
is
absurd,
since
Mrs.
Johnstone
had
become
hysterical
over
missing
the
purchase
of
the
duplex
property.
According
to
Mrs.
Johnstone
that
house
needed
fixing,
for
example
new
windows
would
have
to
be
installed
to
take
advantage
of
the
view.
She
was
interested,
as
she
constantly
indicated
during
her
testimony,
in
the
view.
Mrs.
Johnstone
never
testified
that
she
ever
really
liked
the
house
which
formerly
stood
on
the
subject
property.
In
that
she
appears
to
have
directly
contradicted
the
plaintiff.
However
this
testimony
is
consistent
with
a
shared
intention
to
buy
for
the
view
and
simply
to
demolish
the
house.
Nevertheless,
the
plaintiff,
using
his
corporation
Lancer
Investments
Ltd.
as
a
front
to
conceal
his
identity
from
the
vendor,
offered
to
buy
the
property
(Exhibit
3)
on
that
first
visit
for
$423,000
all
cash.
The
offer
was
accepted
the
very
next
day,
March
29,
1979.
It
is
at
this
point
in
the
Johnstones'
testimony
that
the
Court
experiences
difficulty
with
their
credibility.
They
both
gave
the
impression,
while
testifying,
of
distinct
thespian
tendencies.
If
one
were
to
accept
all
the
inferences
to
be
drawn
from
Mrs.
Johnstone's
testimony
and
demeanour,
she
is
a
very
self-centred,
manipulative
person.
But
is
she?
Maybe,
but
it
is
also
probable
as
the
Court
holds,
that
she
shaded
her
testimony
according
to
the
plaintiff's
position
on
the
matters
here
in
issue.
On
the
other
hand,
anyone
who
heard
and
observed
the
plaintiff,
as
this
Court
did,
cannot
credit
the
image
of
pliant,
confused
naivety,
which
he
sought
to
project.
That
image
is
quite
inconsistent
with
the
plaintiff's
experience
with
real
estate
transactions,
real
estate
agents,
real
estate
mortgages
and
the
real
profits
which
he
wrought
from
his
experienced
dealings
with
all
of
the
foregoing.
The
plaintiff's
grade
six
education
has
certainly
not
held
him
back
from
being
a
careful,
foxy
and
successful
investor.
Even
in
the
purchase
of
the
Revelstoke
Hotel
which
was
based
on
what
the
plaintiff
characterized
as
a
"silly
loan”
(transcript:
p.
69),
the
plaintiff
ultimately
after
two
years
and
ten
months
emerged
smelling,
financially
speaking,
of
roses.
After
observing
the
Johnstones'
demeanour,
and
attending
to
their
testimony,
compared
with
the
objective
evidence
in
the
documents,
the
Court
finds
that
the
plaintiff
bought
the
subject
property
with
the
intention
of
soon
selling
a
half-interest
in
it
in
order
to
earn
a
monetary
gain.
The
evidence
does
generate
a
strong
inference,
which
the
Court
adopts,
that
having
found
the
desirable
water-front
location
with
a
fine
view,
which
the
plaintiff
and
his
wife
were
seeking,
the
plaintiff
was
unconcerned
about
the
undesirable
size
of
the
house
thereon
because
from
the
outset
he
intended
to
demolish
it,
subdivide
the
lot
into
two
parcels,
and
sell
the
other
parcel
at
a
profit
which
would
be
turned
to
account
in
financing
the
project.
That
intention
runs
as
a
constant
demonstrable
theme
pursued
with
determination
and
zeal
until
the
result
was
achieved.
The
fact
that
the
plaintiff
was
unaware
of
the
zoning
at
the
moment
he
purchased
the
property
does
not
count
against
the
inference,
but
rather
supports
it.
Believing
first,
at
the
end
of
March
1979,
that
there
was
no
obstacle
in
pursuing
his
intention,
the
plaintiff
soon
learned
about
the
zoning
problem.
By
May
22,
1979,
according
to
the
date
on
Exhibit
4,
the
plaintiff
had
consulted
Mr.
White,
the
designer,
who
prepared
the
plan
which
was
attached
to
the
letter
of
application
for
subdivision.
The
plaintiff
may
be
quite
correct
in
testifying
that
after
March
30
he
did
not
know
“which
way
to
turn"
because
it
appeared
that
his
original
intention
to
subdivide
might
be
frustrated.
He
certainly
had
no
intention
to
resell
the
property
in
order
to
overcome
his
frustration.
Here
it
should
be
noted
that
even
if
the
plaintiff's
intentions
were
formed,
shaped,
influenced
or
manipulated
by
his
wife,
they
remain
his
intentions.
After
all,
his
mental
competence
is
not
at
all
in
doubt.
Both
Mr.
Johnstone's
testimony
and
common
sense
indicate
that
the
application
for
subdivision
(Exhibit
4),
was
not
prepared
overnight.
The
facts
that
it
is
dated
some
54
days
after
the
plaintiff's
signed
offer
was
accepted
by
the
vendors,
and
only
21
days
after
the
date
for
adjustments
and
possession,
do
not
count
against
the
clear
inference
of
an
abiding
intention
to
subdivide
the
subject
property.
This
is
an
instance
in
which
past
actions
speak
more
loudly
than
later
testimony.
The
intention
evinced
by
the
plaintiff's
conduct
was
to
buy
the
property
and
sell
nearly
half
of
it
as
soon
as
possible
for
gain.
Alternatively,
if
perchance
that
were
not
the
plaintiff's
secondary
intention
on
March
28,
1979,
it
is
clear
that
he
was
in
need
of
funds
to
make
a
thorough
going
renovation
of
the
house
for
which
he
had
already
“paid
a
fortune"
and
intended
to
take
a
"chance
to
get
back
a
little
money
.
.
.
a
little
bit
back
to
soften
the
blow".
(Transcript:
pp.
45,
93
&
130.)
So,
shortly
after
Mrs.
Johnstone
flatly
refused
to
move
into
this
house,
which
she
was
allegedly
keenly
interested
in
buying
on
March
28,
1979,
the
plaintiff
determined
to
divide
the
property
somehow
and
to
sell
a
half-interest
in
it
in
order
to
earn
a
monetary
gain,
or
profit.
Thus,
"even
if,
at
the
time
of
acquisition,
the
intention
of
turning
the
lands
to
account
by
resale
was
not
present,
it
does
not
necessarily
follow
that
profits
resulting
from
sales
are
not
assessable
to
income
tax"
as
was
written
by
Mr.
Justice
Cattanach
in
Moluch
v.
M.N.R.,
[1966]
C.T.C.
712
at
718;
66
D.T.C.
5463
at
5466
(Ex.
Ct.).
If
it
be
true
that
the
plaintiff
bought
the
subject
property
with
the
intention
of
residing
there,
that
which
the
plaintiff
has
not
established
on
a
balance
of
probabilities,
then
he
soon
changed
his
intention
and
single-
mindedly
turned
his
alleged
residential
investment
into
a
trading
venture.
That
point
of
time
must
have
been,
if
at
all,
when
Mrs.
Johnstone
refused
to
occupy
that
"huge"
house
no
matter
how
extensively
it
would
be
renovated.
If
the
Johnstones
could
be
believed
in
that
regard,
that
would
have
been
the
moment,
sometime
before
May
22,
1979,
when
the
plaintiff
must
have
changed
his
previous
intention
and
formed
the
dominant
intention
to
convert
half
of
the
property
to
inventory
for
sale
at
a
profit.
The
plaintiff,
of
course,
does
admit
this
latter
intention.
(Transcript:
pp.
131
&
132.)
He
said
he
needed
to
sell
off
the
other
part
in
order
to
help
pay
for
the
whole
project.
Assisted
by
his
wife
whom
he
tacitly
if
not
explicitly
authorized
to
act
for
him,
the
plaintiff
proceeded
to
bring
that
business
of
selling
the
other
strata
lot
to
a
successful
conclusion.
The
course
of
the
plaintiff's
conduct,
driven
or
manipulated
by
his
wife
throughout,
as
they
say,
or
in
complete
co-operation,
as
the
case
may
be,
is
demonstrated
by
the
sequence
of
documents
received
into
evidence.
The
plaintiff
and
Mrs.
Johnstone
did
not
indeed
inhabit
3095
Point
Grey
Road
until
after
that
property
had
been
converted
into
two
adjacent
strata
lots
on
February
18,
1981.
The
plaintiff
subsequently
retained
only
an
undivided
halfinterest
in
the
land
in
common
with
the
purchaser
of
the
other
strata
lot,
number
1.
It
was
not
clearly
explained,
if
at
all,
why
the
plaintiff
did
not
personally
acquire
registered
title
to
the
subject
property
until
December
3,
1980,
considering
that
Lancer's
offer
was
accepted
on
March
29,
1979.
In
any
event,
Exhibit
20
is
a
copy
of
the
plaintiff's
certificate
of
title
to
the
as
yet
undivided
property,
dated
December
3,
1980.
The
plaintiff
was
busy
working
on
his
intention
to
sell
off
half
of
his
newly
acquired
property
by
May
22,
1979.
Although
the
plaintiff
says
that
the
letter
represented
by
Exhibit
4
was
written
and
typed
for
him
by
his
then
solicitor,
he
acknowledged
that
he
would
not
object
to
that
letter.
It
is
an
application
to
the
City
of
Vancouver
for
permission
to
subdivide
the
subject
property
into
two
45-foot
lots
for
the
construction
of
two
single-family
dwellings.
Whether
they
were
misinformed
on
zoning
or
not,
and
it
appears
that
the
plaintiff
and
his
wife
were
in
fact
so
misinformed,
the
Court
infers
that
the
plaintiff
clearly
evinces
the
intent
to
sell
off
half
of
his
property
in
Exhibit
4
including
the
attached
sketch.
In
cross-examination
he
was
evasive.
Asked
about
his
having
signed
that
letter,
the
plaintiff
answered
that
he
"just
signed
that
letter
probably
without
reading
it.
I
don't
know."
This
Court
is
of
the
opinion,
however,
that
the
plaintiff
knew
very
well
that
he
was
in
his
own
words
making
a
"test",
"just
to
see
if
the
City
would
.
.
.
let
us
put
a
duplex
on
it.”
(Transcript:
p.
94.)
The
plaintiff's
initial
dissembling
about
his
lawyer's
expression
of
the
plaintiff's
intent
to
divide
the
property
does
nothing
to
strengthen
the
plaintiff's
credibility.
The
city’s
Planning
Department
took
a
long
time
to
reply.
The
plaintiff,
after
a
month
started
going
to
City
Hall
every
couple
of
weeks.
Mrs.
Johnstone
"got
pretty
strong
about
it
[this
delay]"
for,
as
she
testified,
"he
was
just
spinning
his
wheels",
or
as
the
plaintiff
said,
he
"just
got
brushed
off
every
time”.
Finally
on
August
13,
1979,
the
Deputy
Approving
Officer
wrote
(Exhibit
5)
to
reject
the
plaintiff's
application.
Exhibit
6
is
a
copy
of
the
plaintiff's
application
of
August
29,
1979,
for
a
permit
to
build
a
"two-storey
plus
cellar
two-family
dwelling
.
.
.
with
four-
car
garage"
on
the
subject
land.
It
bears
a
scrawled
notation:
"Withdrawn
by
applicant
Refer
to
letter
dated
Dec.
27/79
from
Mr.
Glen
Johnstone."
In
the
meanwhile
the
Johnstones
had
contacted
a
former
city
solicitor,
then
in
private
practice.
He
advised
them
that
they
would
get
nowhere
without
engaging
the
services
of
a
reputable
architect.
The
solicitor
wrote
(Exhibit
7)
on
October
9,
1979,
to
the
Planning
Department
to
ask
it
not
to
review
the
plans
and
application
then
before
it,
but
rather
to
wait
“until
the
new
set
is
supplied
in
substitution
therefor”.
The
plaintiff
and
Mrs.
Johnstone
met,
and
the
plaintiff
engaged
the
services
of
Mr.
Freeman
Chan,
MRAIC,
in
regard
to
the
contemplated
erection
of
"a
side-by-side
strata
title
residential
duplex
at
3095
Point
Grey
Road,
.
.
.
Vancouver,
.
.
.
for
the
client's
own
use
and
enjoyment,
and
for
sale.”
It
was
to
cost
not
more
than
$240,000.
The
agreement
is
copied
in
Exhibit
8
and
is
dated
October
30,
1979.
It
should
be
noted
that
after
moving
out
of
the
Appian
Way
house,
the
plaintiff
and
Mrs.
Johnstone
lived
in
an
apartment
at
1500
Haro
Street
in
Vancouver.
The
plaintiff
described
how
he
was
trying
to
cope
with
his
wife's
refusal
to
inhabit
the
big
house
on
the
subject
property.
One
thing
is
clear:
neither
the
plaintiff
nor
his
wife
was
minded
to
sell
it.
The
plaintiff
testified
that
if
he
had
tried
to
sell
—
"Well
a
divorce
or
one
thing
or
another".
(Transcript:
p.
84.)
Mrs.
Johnstone
testified:
“That
is
not
what
we
bought
it
for
to
sell,
no
I
wanted
another
solution,
not
to
sell
it.”
(Transcript:
p.
184.)
The
plaintiff's
recounting
of
his
alleged
agony
of
not
knowing
what
to
do
in
his
predicament
is
mere
make-believe.
There
was
never
any
intention
to
sell
the
subject
property,
as
a
rational
solution
to
the
alleged
predicament.
There
always
was,
or
at
least
very
shortly
after
buying
there
was,
the
intention
to
sell
half
the
lot
or
a
half-interest
in
the
lot,
complete
with
an
extra
housing
unit,
at
a
profit,
in
order
to
help
defray
the
costs
of
building
and
finishing
a
residence
to
suit
Mrs.
Johnstone's
exacting
and
expensive
tastes.
After
Mrs.
Johnstone
got
to
collaborating
with
Mr.
Chan
the
costs
soared.
At
first
the
Vancouver
City
Council
was
on
the
verge
of
refusing
the
proposals
prepared
by
Mr.
Chan,
basically
demonstrated
in
Exhibit
2.
The
matter
was
adjourned
and
Mrs.
Johnstone
effectively
lobbied
the
mayor
and
all
the
councillors
of
Vancouver
and
thereby
later
won
resounding
approval
of
the
project.
Exhibit
15
demonstrates
approval
of
Mr.
Chan's
last
proposal
submitted
January
9,
1980
and
permitted
on
May
15,
1980.
A
copy
of
the
building
permit,
which
was
issued
as
late
thereafter
as
June
3,
1980,
is
Exhibit
16.
Only
then
could
the
construction
process
begin,
if
in
fact
it
really
did.
Exhibit
9
is
a
copy
of
the
accepted
offer
of
Vivian
J.
Trethewey
to
buy
the
subject
property,
not
yet
fully
constructed,
on
November
5,
1980.
Mrs.
Trethewey's
offer
states
the
purchase
price
of
$800,000
in
cash.
It
runs,
in
part:
[typewritten]
Owner
to
construct
a
residence
upon
the
lands
in
accordance
with
plans
drawn
by
Freemen
Chan
MRAIC
(previously
shown
to
the
purchaser)
in
accordance
with
the
specifications
attached
hereto.
The
owner
is
to
have
the
unfettered
right
to
make
such
alterations
to
the
plans
aforesaid
as
he
may
deem
necessary
during
the
course
of
construction.
If
the
owner
is
unable
to
complete
the
residence
by
December
31st,
1980
due
to
reasons
beyond
the
owner's
control,
then
the
completion
and
adjustment
dates
shall
be
postponed
from
December
31,
1980
to
the
date
the
residence
is
substantially
completed.
Notwithstanding
the
foregoing
if
the
owner
is
prevented
from
substantially
completing
the
residence
on
or
before
December
31st,
1980
due
to
delays
occasioned
by
reason
of
the
purchaser
then
the
sale
shall
be
completed
on
December
31st,
1980
notwithstanding
the
fact
that
the
residence
has
not
been
substantially
completed
by
that
date
and
the
balance
of
the
purchase
price
in
full
shall
be
paid
to
the
owner.
Deposit
to
be
increased
to
$200,000.00
upon
three
quaters
[sic]
completion
of
the
residence
as
certified
by
the
builder.
All
deposits
are
to
be
paid
directly
to
the
owner.
This
agreement
is
subject
to
the
satisfactory
approval
of
the
Purchasers
lawyer
on
or
before
twelve
noon
November
8th,
1980.
This
subject
clause
is
for
the
sole
benefit
of
him/her
and
must
be
removed
on
or
before
twelve
noon
November
8th,
1980
in
writing.
There
is
no
commission
payable
by
vendor.
[printed]
The
purchaser
will
bear
all
costs
of
the
conveyance
and
.
.
.
mortgage
and
the
owner
will
bear
all
costs
of
clearing
title.
|
Balance
of
cash
payment
to
be
made
and
|
|
|
the
sale
completed
by
|
December
31,
1980
|
|
The
Purchaser
to
have
possession
of
the
|
|
|
property
subject
to
existing
tenancies
at
12
|
|
|
noon
on
|
December
31,
1980
|
|
The
Purchaser
will
assume
and
pay
all
|
|
|
taxes
[etc.]
.
.
.,
and
all
adjustments
.
.
.
of
|
|
|
whatsoever
nature
will
be
made
as
of,
|
December
31,
1980
|
|
.
.
.
date
of
inspection,
namely,
November
5,
1980,
|
|
|
See
attachment.
|
|
The
offer
was
accepted
by
the
plaintiff
on
the
following
day,
that
is
November
6,
1980.
The
terms
above
recited
are
extremely
important
in
the
premises
because
the
plaintiff's
(and
Mrs.
Trethewey's)
conduct
in
abiding
by
those
terms
of
the
pact
provides
material
evidence
as
to
the
matters
in
issue.
There
were
delays,
and
the
property
was
not
ready
to
be
occupied
by
the
purchaser
on
December
31,
1980,
but
the
delays
were
not
occasioned
by
her
and
she
was
not
called
upon
by
the
plaintiff
to
pay
the
balance
of
the
purchase
price
in
full
at
that
time.
Therefore,
and
according
to
the
plaintiff's
agreement
with
Mrs.
Trethewey,
the
sale
was
not
completed
at
or
by
any
time
at
all
during
the
last
day
of
1980.
In
fact,
Exhibit
11
discloses
that,
on
the
eve
of
that
very
day,
her
solicitor
wrote
to
the
plaintiff's
solicitor
thus:
Further
to
your
letter
of
November
27,
1980
and
our
telephone
conversation
of
November
28,
1980
we
confirm
that
our
client
has
removed
the
subject
to
solicitor’s
approval
contained
in
the
original
interim
agreement
and
a
copy
of
the
same
will
be
forthcoming.
We
are
also
advised
by
our
client
that
this
matter
will
not
be
completing
by
the
31st
of
December,
1980
as
the
condominium
is
not
fully
completed
and
to
this
end
we
would
ask
that
you
contact
your
client
in
order
to
determine
a
realistic
completion
date
in
order
that
we
may
obtain
an
amendment
with
regards
to
the
interim
agreement
for
the
completion,
possession
and
adjustment
dates
herein.
Following
the
solicitor's
letter,
and
on
January
28,
1981,
according
to
Exhibit
12,
the
purchaser
tendered
her
second
deposit
payment
of
$100,000
"recognizing
that
you
are
now
75
per
cent
complete
on
finishing
her
duplex
at
3095
Point
Grey
Road.”
The
Court
finds
on
the
foregoing
that
completion
of
the
sale,
calculation
of
the
adjustments
and
the
plaintiff's
entitlement
to
the
proceeds
of
his
sale
did
not
happen
at
all
during
the
1980
taxation
year.
Such
a
determination
would
have
been
difficult
to
make
had
the
parties
to
that
transaction
themselves
provided
otherwise,
even
if
they
had
agreed
upon
an
utterly
implausible
fiction.
But,
there
was
no
fiction
in
their
agreement
nor
in
their
course
of
conduct.
The
plaintiff
cannot
credibly
pretend
otherwise.
As
the
evidence
shows,
the
completion
of
the
sale
and
the
plaintiff's
entitlement
to
the
proceeds
of
it
were
events
of
1981.
Exhibit
17
is
a
copy
of
the
plaintiff's
solicitor's
letter
of
March
23,
1981,
addressed
to
the
purchaser's
solicitor.
The
first
two
paragraphs
run
thus:
We
are
writing
concerning
the
interim
agreement
dated
5
November,
1980
between
Vivian
J.
Trethewey
as
Purchaser
and
Mr.
Johnstone
as
Vendor
respecting
the
Point
Grey
Road
property.
As
we
advised
you
by
telephone
sometime
ago,
Mr.
Johnstone
will
be
able
to
deliver
the
condominium
completed
save
for
alterations,
etc.
requested
by
Mrs.
Trethewey
on
25
March,
1981
and
this
date
has
been
established
as
the
completion
and
adjustment
dates.
So,
the
plaintiff
under
cross-examination,
acknowledged
(transcript:
pp.
117
&
118)
that
he
was
responsible
to
pay
all
taxes
and
insurance
on
the
whole
property,
land
and
building
until
March
25,
1981.
There
was
no
residential
occupancy
of
the
building
by
anyone
during
1980.
(Transcript:
pp.
118
&
119.)
The
Johnstones
never
occupied
the
half
which
Mr.
Johnstone
sold
to
the
purchaser.
(Transcript:
pp.
122
&
123.)
Meanwhile,
Mr.
Johnstone
had
acquired
a
certificate
of
indefeasible
title
in
fee
simple
only
on
December
3,
1980,
under
certificate
of
title
number
H94828-L
a
copy
of
which
is
Exhibit
20.
(He
had
already
accepted
Mrs.
Trethewey's
offer
to
buy
one
of
the
two
side-by-side
units
as
shown
in
Exhibit
9,
on
November
6,
1980.
See
also
Exhibits
10,
11
and
12,
correspondence
between
the
respective
solicitors.)
The
next
significant
date
is
February
18,
1981,
the
day
on
which
the
plaintiff
caused
the
Vancouver
Land
Titles
Office
to
register,
from
his
certificate
of
title,
numbers
J11715-L
and
J11716-L
establishing
the
plaintiff
as
owner
in
fee
simple
of
Strata
Lot
1
and
Strata
Lot
2
respectively,
according
to
Strata
Plan
Vr.
851
[Exhibit
2]
"together
with
an
interest
in
the
common
property
in
proportion
to
the
unit
entitlement
of
the
Strata
Lot
as
shown
on
Form
1".
(Exhibits
15
and
16.)
Each
of
those
new
certificates
of
title
reveals
that
it
originates
from
title
number
H94828-L.
It
is
evident
that
the
Johnstones,
never
having
occupied
the
entire
property
described
in
Exhibit
20,
as
their
residence,
equally
never
occupied
as
their
residence
either
of
the
properties
described
in
Exhibits
15
and
16.
The
Johnstones
continued
never
to
have
occupied
Strata
Lot
1
up
to
the
date
of
the
trial
herein.
So,
they
continued
never
to
have
occupied
Strata
Lot
1
as
and
for
their
residence
because
it
never
was
their
residence.
Later,
Strata
Lot
2
became
their
residence.
On
March
25,
1981,
the
plaintiff
executed
a
transfer,
a
copy
of
which
is
Exhibit
13,
of
all
his
estate
or
interest
in
"Strata
Lot
1
.
.
.
Strata
Plan
Vr.
851,
together
with
an
interest
in
the
common
property
in
proportion
to
the
unit
entitlement
of
the
Strata
Lot
as
shown
on
form
1",
in
favour
of
the
purchaser,
Vivian
Trethewey.
That
transfer
was
received,
if
not
registered,
in
the
land
titles
office
on
March
27,
1985,
according
to
the
apparently
rubber-stamped
date
thereon.
It
was
only
about
two
months
later,
in
May
1981,
(transcript:
pp.
63
&
113-114)
that
the
plaintiff
and
his
spouse
first
inhabited
any
portion
of
the
property,
and
then
only
lot
2,
as
their
residence.
The
interest
in
the
common
property
mentioned
in
the
certificates
of
title
and
in
the
transfer,
Exhibit
13,
is
specified,
according
to
counsel
on
each
side,
on
page
2
of
Exhibit
2,
the
strata
plan
Vr.
851.
The
forms
there
are
completed
for
lots
1
and
2.
The
"schedule
of
unit
entitlement"
is
based
on
the
value
of
1,000
—
no
doubt
in
accordance
with
paragraph
1(3)(a)
of
the
above
cited
Condominium
Act.
The
unit
entitlement
of
lot
1
transferred
to
Mrs.
Trethewey
is
488
and
that
of
lot
2
retained
by
the
plaintiff
is
512,
both
over
1,000.
However
the
second
form,
which
sets
out
the
"schedule
of
interest
upon
destruction",
fixes
the
value
of
500
each,
also
over
1,000.
This
indicates
that
the
owner
of
lot
1,
the
plaintiff,
enjoys
the
legal
control
of
the
property
so
long
as
the
building
be
not
destroyed,
but
should
it
be
destroyed
the
respective
owners
would
be
equal
in
being
vested
each
with
an
undivided
one-half
common
proprietary
interest
in
the
land
alone.
Other
provisions
of
the
Condominium
Act
which
are
pertinent
to
the
matters
raised
by
counsel
herein
are:
1.(1)
.
..
"common
property"
means
so
much
of
the
land
and
buildings
comprised
in
a
strata
plan
that
is
not
comprised
in
a
strata
lot
shown
on
the
strata
plan
.
.
.;
"superintendent"
means
the
Superintendent
of
Real
Estate;
(2)
A
schedule
of
unit
entitlement
that
is
acceptable
to
the
superintendent
is
required
for
each
strata
plan.
3.
(2)
The
registrar
shall
examine
the
application
and
the
instrument
and
strata
plan
produced
in
support
of
it,
and,
if
satisfied
that
they
are
in
order
and
comply
with
all
applicable
requirements
for
registration
in
the
land
title
office,
shall
assign
to
the
strata
plan
a
serial
deposit
number
and
register
new
indefeasible
titles
for
the
strata
lots
shown
on
the
strata
plan
as
may
be
necessary.
4.
A
strata
plan
shall
(f)
show,
in
a
schedule,
the
unit
entitlement
of
each
strata
lot
to
be
used
in
determining
the
undivided
share
of
each
owner
in
the
common
property
and
the
proportion
payable
by
each
owner
of
contributions
levied
under
section
35;
(g)
show,
in
a
schedule
acceptable
to
the
superintendent,
to
the
nearest
whole
number,
the
share
of
each
owner
as
a
tenant
in
common
of
the
property
and
assets
of
the
strata
corporation
on
the
destruction
of
the
building
referred
to
in
section
64,
calculated
in
the
proportion
that
the
value
of
each
strata
lot
bears
to
the
total
value
of
all
strata
lots
on
that
strata
plan;
12.(1)
The
common
property,
common
facilities
and
other
assets
of
the
strata
corporation
shall
be
held
by
the
owners
as
tenants
in
common
in
shares
proportional
to
the
unit
entitlement
of
their
strata
lots.
(2)
Subject
to
this
Act,
a
share
in
the
common
property,
common
facilities
and
other
assets
of
the
strata
corporation
shall
not
be
dealt
with
separately
from
the
strata
lot
of
the
owner.
An
instrument
dealing
with
a
strata
lot
operates
to
deal
with
the
share
of
the
owner
in
the
common
property,
common
facilities
and
other
assets
of
the
strata
corporation,
without
express
reference.
The
above
recited
passages
are
helpful
in
appreciating
the
nature
of
the
estate
or
interest
of
which
the
plaintiff
disposed
in
generating
income
from
the
sale.
Now
the
Court
ought
to
dispose
of
two
additional
issues
raised
and
asserted
by
the
plaintiff
in
his
pleadings
and
at
trial:
(i)
that
the
gain
realized
by
the
plaintiff
on
disposition
of
a
portion
of
the
land
was
realized
in
the
1980
taxation
year
and
not
in
the
1981
taxation
year;
and
(ii)
that
the
gain
was
realized
from
the
disposition
of
the
plaintiff's
principal
residence,
which
gain
is
reduced
to
nil
by
virtue
of
the
deduction
provided
by
paragraph
40(2)(b)
of
the
Income
Tax
Act.
In
regard
to
issue
(i),
it
must
be
borne
in
mind
that
paragraph
38(a)
of
the
taxation
statute
defines
“a
taxpayer's
gain
for
a
taxation
year
from
the
disposition
of
any
property"
as
being
“'/2
of
his
capital
gain
for
the
year
from
the
disposition
of
that
property,
and
that
subsection
9(1)
provides
that
the
"taxpayer's
income
for
a
taxation
year
from
a
.
.
.
property
is
his
profit
therefrom
for
the
year".
The
gain
or
profit
is
for
the
year
and
that
is,
and
remains,
an
uncomplicated
concept
where,
as
here,
the
gain
was
realized
in
cash,
wholly
within
the
12-month
period
of
a
year.
Here
one
must
abide
by
the
statutory
definition
of
the
disposition
of
the
property
from
which
the
gain
was
realized.
Paragraph
54(c)
of
the
Income
Tax
Act,
in
its
pertinent
passage
provides
that
"disposition"
of
any
property,
except
as
expressly
otherwise
provided,
includes
(i)
any
transaction
or
event
entitling
a
taxpayer
to
proceeds
of
disposition
of
property.
One
needs
not
to
analyse
an
uneventful
transaction
any
further,
but
a
transaction
which
generates
further
events
in
its
performance
will,
according
to
the
definition,
focus
upon
that
event,
or
those
particular
events,
by
which
the
taxpayer
finally
or
specifically
becomes
ipso
facto
entitled
to
the
proceeds.
The
"proceeds
of
disposition”
of
property,
according
to
paragraph
54(h)
includes
in
its
relevant
parts
"the
sale
price
of
property
that
has
been
sold”.
The
pertinent
definition
of
"property"
in
this
context
"means
a
housing
unit
.
.
.
owned
by
him”,
[the
taxpayer],
according
to
subsection
54.1(2),
paragraph
(a).
Mrs.
Trethewey's
son
intimated
orally
to
the
plaintiff
that
he
was
disposed
to
buy
the
"other
half”
of
the
property
for
$800,000
according
to
the
plantiff.
They
shook
hands
on
it.
That
event
occurred,
as
one
can
infer
from
the
date
of
the
subsequent
written
“interim
agreement",
Exhibit
9,
about
the
end
of
October
or
first
few
days
of
November
1980.
The
plaintiff
testified
that
the
buyer's
son
was
able
to
envisage
the
premises
from
the
state
of
construction
and
that
he
did
not
peruse
the
plans.
The
plaintiff
could
not
clearly
remember,
but
he
testified
that
he
believed
that
the
initial
deposit
of
$100,000
was
tendered
with
the
offer.
The
above
transaction
does
bear
one
of
the
hallmarks
of
an
incomplete,
not
yet
concluded
contract,
in
the
expression:
"This
agreement
is
subject
to
the
satisfactory
approval
of
the
Purchasers
lawyer"
by
noon
November
8,
and
"This
subject
clause
.
.
.
must
be
removed
.
.
.
before
.
.
.
noon
November
8,
1980
in
writing.”
Such
hallmark
was
identified
by
the
Supreme
Court
of
Canada
for
whom
Mr.
Justice
Judson
delivered
judgment
in
Calvan
Consolidated
Oil
&
Gas
Co.
Ltd.
v.
Manning,
[1959]
S.C.R.
253
at
260.
Therefore
no
agreement
was
formally
concluded
on
November
6,
1980.
Moreover,
even
if
a
formal
finding
agreement
had
been
effected
then,
it
would
not
have
met
the
criteria
of
a
statutory
“disposition”
for
too
much
remained
yet
to
be
accomplished
before
the
ultimate
or
final
transaction
or
event
entitling
the
plaintiff
to
the
proceeds
would
or
could
occur.
The
principle
relating
to
a
vendor's
calling
for
the
proceeds
of
the
sale
of
land
was
reiterated
by
Mr.
Justice
McIntyre
for
a
unanimous
panel
of
the
British
Columbia
Court
of
Appeal
in
Burtini
et
al.
v.
Sovilj
(1977),
71
D.L.R.
(3d)
765.
At
page
767,
McIntyre,
J.A.
emphasized
the
following
passage
of
Williams,
Treatise
on
the
Law
of
Vendor
and
Purchaser,
2nd
ed.,
vol.
1
(1910)
at
p.
578:
Thus
the
vendor
cannot
require
payment
of
the
price
and
call
upon
the
purchaser
to
take
possession
unless
and
until
he
have
shown
a
good
title
and
be
ready
and
willing
to
execute
a
valid
conveyance
to
the
purchaser.
.
.
The
learned
judge
asserted
that
the
above
sentence
and
the
longer
passage
in
which
it
occurs
state
the
common
law,
which
is
applicable
in
British
Columbia.
The
principle
applies
here
in
regard
to
the
evidence
tendered
about
the
agreement
for
sale.
The
"subject-to-lawyer's-approval"
clause
was
not
removed
by
or
on
behalf
of
the
purchaser
by
noon
of
November
8,
1980.
The
plaintiff
grew
justifiably
restive
and
threatened
to
"regard
the
sale
as
being
at
an
end
and
return
the
deposit
to
Mrs.
Trethewey"
(Exhibit
10),
"unless
the
purchaser
is
in
a
position
to
remove
the
condition
in
the
interim
agreement
providing
for
[her
lawyer's]
approval
by
2
p.m.
tomorrow
afternoon
(28
November,
1980).”
The
solicitors
engaged
in
the
transaction
agreed
to
remove
that
condition,
but
they
did
not
do
so,
and
they
expressed
the
need
to
conclude
an
agreement
between
their
clients
which
was
unfulfilled,
the
Court
infers,
until
1981.
That
inference
is
drawn
from
the
plain
language
of
Exhibit
11,
a
copy
of
Mrs.
Trethewey's
solicitor’s
letter
dated
December
30,
1980,
addressed
to
the
plaintiff's
solicitor.
Exhibit
11
runs:
Further
to
your
letter
of
November
27,
1980,
and
our
telephone
conversation
of
November
28,
1980
we
confirm
that
our
client
[Trethewey]
has
removed
the
subject
to
solicitor's
approval
contained
in
the
original
interim
agreement
and
a
copy
of
the
same
will
be
forthcoming.
We
are
also
advised
by
our
client
that
this
matter
will
not
be
completing
by
the
31st
of
December,
1980
as
the
condominium
is
not
fully
completed
and
to
this
end
we
would
ask
that
you
contact
your
client
[the
plaintiff]
in
order
to
determine
a
realistic
completion
date
in
order
that
we
may
obtain
an
amendment
with
regards
to
the
interim
agreement
for
the
completion,
possession
and
adjustment
dates
herein.
[Emphasis
added.]
Upon
the
above
evidence,
the
Court
finds
as
facts
that
not
only
had
the
plaintiff
made
no
disposition
in
1980,
but
also
that
he
did
not
even
have
a
concluded
agreement
for
sale
of
lot
1
in
1980.
It
is
in
this
regard
that
the
case
at
bar
is
distinguishable
from
Reilly
Estate
v.
The
Queen,
[1984]
C.T.C.
21;
84
D.T.C.
6001,
where
that
taxpayer
had
all
his
titles
to
the
land
ready
to
transfer
and
to
convey
to
that
purchaser
without
the
leave,
consent
or
approval
of
any
person
extraneous
to
their
uneventful
transaction.
Here,
what
the
plaintiff
Johnstone
had
yet
to
do
at
the
beginning
of
1981
were
not
only
those
matters
above
described
in
Exhibit
11,
but
also
he
had:
to
deposit
a
strata
plan
(Exhibit
2)
with
a
unit
entitlement
schedule
acceptable
to
the
superintendent
(done
as
of
February
6,
1981);
and
to
obtain
in
his
own
name
a
certificate
of
indefeasible
title
(Exhibit
18)
to
strata
lot
1
(done
as
of
February
18,
1981)
—
all
before
“any
transaction
or
event
entitling
[the
plaintiff]
to
proceeds
of
disposition
of
property"
could
possibly
occur.
Nemo
dat
quod
non
habet.
Only
then,
after
those
events,
could
the
plaintiff
precipitate
the
event
which
entitled
him
to
the
proceeds,
that
is
the
transfer
of
strata
lot
1
to
the
purchaser,
on
March
25,
1981.
In
this
regard,
the
Court
rejects
the
plaintiff's
prayer
for
relief,
and
holds
that
his
gain
from
the
sale
of
strata
lot
1
was
realized
in
1981,
and
is
required
to
be
included
in
computing
the
plaintiff's
income
for
the
1981
taxation
year.
Indeed,
in
Schedule
2
—
Summary
of
Dispositions
of
Capital
Property
in
1981
(Exhibit
1)
the
plaintiff
himself
reported
the
sum
of
$800,000,
being
the
proceeds
of
the
disposition
of
the
Point
Grey
Road
property.
In
regard
to
issue
(ii)
whereby
the
plaintiff
asserts
that
the
gain
was
realized
from
the
disposition
of
the
plaintiff's
principal
residence,
the
resolution
is
even
less
complicated
than
that
of
the
previous
issue.
In
this
regard,
the
plaintiff
cites
paragraph
54(g)
of
the
Income
Tax
Act
in
order
to
invoke
paragraph
40(2)(c)
thereof.
Paragraph
54(g)
is
so
replete
with
convoluted
qualifications
and
exceptions
that
its
meaning
does
not
spring
to
life
upon
the
first
few
readings.
However,
sufficient
meaning
for
the
purposes
of
this
case
can
be
traced
in
the
following
pertinent
critical
path
through
that
paragraph's
vagaries
of
verbiage:
54.(g)
“principal
residence”
of
a
taxpayer
for
a
taxation
year
means
a
housing
unit
.
.
.
owned
.
.
.
in
the
year
by
the
taxpayer,
if
the
housing
unit
was
.
.
.;
(i)
ordinarily
inhabited
in
the
year
by
the
taxpayer,
his
spouse
.
.
.
except
that,
subject
to
section
54.1,
in
no
case
shall
any
such
housing
unit.
.
.
be
considered
to
be
a
taxpayer's
principal
residence
for
a
year
(iii)
unless
it
has
been
designated
by
him
in
prescribed
manner
to
be
his
principal
residence
for
that
year
and
no
other
property
has
been
so
designated
by
him
for
that
year,
or
(iv)
by
virtue
of
subparagraph
(ii),
if
by
virtue
of
that
subparagraph
the
property
would,
but
for
this
subparagraph,
have
been
his
principal
residence
for
four
or
more
previous
taxation
years,
and
for
the
purposes
of
this
paragraph
the
“principal
residence”
of
a
taxpayer
for
a
taxation
year
shall
be
deemed
to
include
.
.
.
the
land
subjacent
to
the
housing
unit
and
such
portion
of
any
immediately
contiguous
land
as
may
reasonably
be
regarded
as
contributing
to
the
taxpayer's
use
and
enjoyment
of
the
housing
unit
as
a
residence,
except
where
.
.
.
Now,
notwithstanding
the
provision's
reference
to
a
taxation
year,
say
1981,
it
is
obvious
that
this
provision
on
the
facts
herein,
has
nothing
whatever
to
do
with
strata
lot
1
in
which
the
plaintiff
sold
and
conveyed
all
of
his
legal
right,
title
and
interest
to
Mrs.
Trethewey
in
March
1981.
He
did
not
transfer
his
principal
residence,
or
any
part
of
it,
to
Mrs.
Trethewey
because
strata
lot
1
together
with
the
relevant
interest
in
the
common
property
was
not
then,
and
never
had
been,
any
part
of
the
plaintiff's
principal
residence.
Paragraph
54(g)
of
the
Income
Tax
Act
simply
cannot
be
interpreted
so
as
to
inject
into,
or
somehow
"vaccinate",
Mrs.
Trethewey's
strata
lot
1
and
an
interest
in
the
common
property
with
the
"germ",
essence
or
any
part
of
the
plaintiff's
principal
residence,
merely
because
strata
lot
2
and
an
interest
in
the
common
property
some
weeks
later
became
the
plaintiff's
principal
residence.
The
plaintiff's
subsequent
inhabiting
of
his
housing
unit
did
not
and
could
not
retroactively
inflict
upon
Mrs.
Trethewey's
earlier
purchase
the
character
of
being,
in
whole
or
in
part,
a
disposition
of
the
plaintiff's
subsequent
infusion
of
lot
2
(and
its
interest
in
the
common
property)
with
the
nature
of
his
principal
residence.
He
had
already
parted
absolutely
with
strata
lot
1
weeks
before
strata
lot
2
assumed
the
nature
of
his
principal
residence.
The
fact
that
he
and
Mrs.
Trethewey
(or
her
successor
in
title)
were
tenants-in-common
of
the
land
contiguous
to
the
housing
units
shown
on
strata
plan
Vr.
851,
does
not
signify
and
disposition
of
his
principal
residence
when
it
later
became
strata
lot
2.
Indeed,
one
might
go
further,
if
it
were
necessary,
and
conclude
that
even
if
the
plaintiff
had
already
been
occupying
lot
2
as
his
principal
residence,
the
sale
and
transfer
of
lot
1
would
not
have
been
a
disposition
of
his
principal
residence.
The
very
purpose
for
the
legal
creation
of
strata
lot
1
was
its
disposition
for
gain,
and
not
as
a
residence
for
the
plaintiff
and
his
wife.
The
plaintiff
and
the
registered
owner
of
strata
lot
1
are
always
perfectly
free
to
sell
or
let
under
lease
their
respective
properties
without
being
encumbered
by
any
obstacle
related
to
each
other's
principal
residence,
no
part
or
aspect
of
which
is
ever
disposed
of
in
favour
or
derogation
of
the
other's
interest
in
his
or
her
own
strata
lot.
The
Court
accordingly
holds
that
the
plaintiff's
gain
does
not
constitute
any
gain
from
the
disposition
of
his
principal
residence,
and
that
the
invocation
of
paragraph
40(2)(b)
of
the
Income
Tax
Act
is
not
relevant
in
the
premises.
In
summation,
the
Court
rejects
the
plaintiff’s
prayers
for
relief
and
dismisses
his
appeal
from
the
Minister's
reassessment
dated
January
21,
1985
and
confirmation
thereof
dated
August
23,
1985.
The
plaintiff's
action
is
dismissed
with
costs.
Action
dismissed.
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