Sarchuk,
T.C.J.:—Joan
Wakelin,
Marlene
Hayes,
Gilbert
Fletcher
and
Jennifer
Polack
have
appealed
from
assessments
of
income
tax
for
their
respective
1981
taxation
year.
The
appeal
of
Joan
Wakelin
was
heard
first
and
by
consent
of
all
parties
the
evidence
adduced
on
her
behalf
is
to
be
applied
to
the
remaining
three
appeals.
Because
of
the
identical
considerations
and
principles
applicable
I
propose
to
write
one
set
of
reasons
for
judgment.
During
the
1981
taxation
year
the
appellants
were
members
of
a
joint
venture
which
disposed
of
property
described
as
Lots
1,
2
and
3,
Sec.
20,
Range
5,
Quamichan
District,
Plan
35532
and
located
on
Sherman
Road
in
Duncan,
British
Columbia.
Each
appellant
reported
his
or
her
taxable
gain
on
the
basis
that
it
was
a
capital
gain.
In
each
case
the
respondent
reassessed
on
the
basis
that
the
disposition
was
part
of
an
adventure
in
the
nature
of
trade
and
included
additional
amounts
in
each
appellant's
income
for
that
taxation
year.
On
behalf
of
the
appellants
it
is
contended
that
the
disposition
of
the
subject
property
was
the
realization
of
an
investment
and
that
the
attendant
profits
were
received
on
capital
account
and
accordingly
were
not
income
within
the
meaning
of
the
Income
Tax
Act.
There
is
no
dispute
about
the
accuracy
of
the
amounts
included
in
the
assessments.
Rather
the
dispute
lies
in
whether
those
amounts
are
taxable
as
income
of
the
appellants.
Neither
is
there
much
dispute
about
the
basic
facts
involved
in
these
appeals.
The
controversy
is
in
the
proper
deduction
to
be
drawn
from
those
facts.
Before
dealing
with
the
circumstances
giving
rise
to
the
challenged
assessments
a
brief
summary
of
the
background
of
each
appellant
is
warranted.
Joan
Wakelin
is
the
spouse
of
Dr.
David
L.
Wakelin,
an
ophthalmologist
and
businessman.
She
had
no
previous
involvement
in
real
estate
transactions
other
than
the
purchase
of
a
family
residence.
At
the
relevant
time
her
business
experience
and
knowledge
can
be
described
as
limited.
Jennifer
Polack
is
the
wife
of
Dr.
Polack.
He
is
associated
with
Dr.
Wakelin
in
the
practice
of
medicine
and
in
other
business
and
real
estate
transactions.
The
appellant
Jennifer
Polack
had
no
prior
experience
in
real
estate.
Marlene
Hayes
is
the
spouse
of
John
Sherwood
Hayes,
a
chartered
accountant.
They
are
closely
acquainted
to
the
other
appellants
and
their
respective
spouses.
The
firm
of
Hayes,
Lloyd
and
DeBeck
acts
as
accountants
for,
and
tax
advisor
to,
all
of
the
appellants,
and
indeed
to
their
respective
spouses.
The
appellant
Gilbert
Fletcher
is
an
architectural
draftsman.
He
and
his
spouse
are
close
friends
of
the
Wakelins.
The
appellant
Fletcher's
prior
involvement
in
real
estate
was
the
purchase
with
Drs.
Wakelin
and
Polack,
among
others,
of
a
Multiple
Unit
Residential
Building
(MURB)
in
Campbell
River,
British
Columbia.
This
transaction
took
place
in
the
late
summer
or
early
fall
of
1980,
more
or
less
at
the
same
time
as
the
acquisition
of
the
subject
property.
It
is
not
seriously
disputed
that
Dr.
Wakelin
was
the
person
who
initiated
the
purchase
of
the
subject
property
and
was
primarily
responsible
for
its
subsequent
disposition.
It
was
evident
that
Dr.
Wakelin
exclusively
dealt
with
the
real
estate
agent,
Mr.
Naylor,
and
with
the
Rural
Municipality
of
Cowichan.
It
is
fair
to
say
that
with
the
possible
exception
of
John
Hayes
none
of
the
appellants
nor
their
spouses
had
any
communication
or
discussions
with
the
vendors,
with
the
ultimate
purchasers,
or
with
the
Rural
Municipality
and
its
various
employees.
As
matters
of
significance
arose
Dr.
Wakelin
would
in
due
course
discuss
them
with
the
appellant
Joan
Wakelin
and
with
John
Hayes
and
Dr.
Polack.
There
is
little
evidence
of
consultation
or
communication
between
Dr.
Wakelin
and
Marlene
Hayes
and
Jennifer
Polack.
In
fact
Marlene
Hayes
testified
that
she
had
never
been
told
about
an
offer
to
purchase
received
from
John
Kuta.
In
the
case
of
the
appellant
Fletcher,
the
arrangement
was
slightly
different.
As
previously
stated,
Fletcher
and
Dr.
Wakelin
were
close
friends.
They
had
previously
discussed
a
joint
project
albeit
not
the
one
in
issue.
Unlike
some
of
the
other
appellants
Fletcher
recalls
viewing
the
property
during
the
course
of
the
negotiations
to
acquire
it.
However
it
does
not
appear
that
he
was
specifically
consulted
at
the
actual
point
of
time
when
the
property
was
acquired,
nor
does
it
appear
that
he
or
any
of
the
other
appellants
participated
in
obtaining
the
interim
financing
required
other
than
by
providing
personal
financial
statements.
The
testimony
of
the
four
appellants,
as
well
as
that
of
Dr.
Wakelin
and
John
Hayes,
left
no
doubt
that
the
appellants
relied
on
Dr.
Wakelin's
opinion
with
respect
to
the
property.
They
relied
on
his
opinion
as
to
the
acceptability
of
the
offers
which
were
subsequently
obtained
by
him
for
the
property.
There
was
no
evidence
of
any
authorization
or
approval
by
them
of
his
approach
to
the
real
estate
agent
Naylor
in
February
of
1981
which
led
to
the
ultimate
sale.
The
appellants
did
not
have,
either
individually
or
collectively,
the
financial
means
nor
the
knowledge
and
experience
required
to
put
together
and
finance
a
development
such
as
the
one
allegedly
contemplated.
While
Fletcher
and
Jennifer
Polack,
and
to
a
lesser
extent
the
other
two
appellants,
may
have
exercised
a
minimal
degree
of
independent
judgment
with
respect
to
their
involvement
Dr.
Wakelin
remained
at
all
times
the
dominant
member
of
the
group.
He
influenced
the
others
to
participate,
he
made
the
proposals
to
the
Bank
of
Nova
Scotia
for
interim
financing,
he
made
all
of
the
inquiries
such
as
they
were
with
respect
to
zoning
and
density
and
other
municipal
requirements.
I
concluded
after
hearing
all
of
the
evidence
that
Dr.
Wakelin
was
the
principal
actor,
both
in
the
acquisition
of
this
property
and
in
its
sale.
It
was
he
alone
who
sought
out
Naylor
to
find
a
property
and
it
was
he
who
discussed
its
value
with
the
solicitor,
John
Kuta.
He
alone
initiated
discussions
with
the
real
estate
agent,
Mr.
Naylor,
which
resulted
in
the
finding
of
an
interested
party
and
an
“unsolicited
offer”.
The
appellants
in
this
case
can
be
described
as
passive
participants,
content
for
the
most
part
to
leave
the
handling
of
their
property
to
Dr.
Wakelin.
In
M.N.R.
v.
Lane,
[1964]
C.T.C.
81;
64
D.T.C.
5049
Noël,
J.
said,
at
page
91
(D.T.C.
5054-55):
It
would
appear
from
this
that
the
Syndicate's
non-active
members
were
quite
content
to
leave
the
handling
of
the
Syndicate's
activities
to
the
executive
committee
who
had
carte
blanche
to
handle
the
business
of
the
Syndicate
as
they
thought
best
and
because
of
this
situation,
the
passive
members
here
would
be
in
no
different
position
than
that
of
the
active
members.
Indeed,
if
the
transactions
are
business
transactions,
any
profit
derived
therefrom
from
any
of
the
members
would
be
taxable.
Although
ultimately
Dr.
Wakelin
was
not
one
of
the
owners
of
the
property
it
is
nonetheless
necessary
to
consider
his
background
and
look
to
his
conduct
to
determine
what
intentions
should
be
attributed
to
the
appellants
at
all
relevant
times.
Dr.
Wakelin
has
practiced
medicine
in
Duncan
since
1974.
He
entered
into
a
partnership
with
Dr.
Polack
in
1977.
That
year
they
purchased
the
office
in
which
they
carry
on
their
practice.
In
1980,
prior
to
his
involvement
in
this
transaction,
Wakelin
purchased
a
small
commercial
building
which
was
leased
to
tenants.
According
to
him
it
proved
to
be
unprofitable
and
was
sold
in
1983
or
1984.
As
well
in
1980
he,
Polack
and
Fletcher
purchased
a
29-
suite
MURB
in
Campbell
River.
This
property
was
acquired
as
a
tax
shelter
and
as
a
long-term
investment.
It
was
sold
in
1986.
During
the
course
of
cross-examination
Wakelin
also
recalled
that
in
1978
he
purchased
a
condominium
and
in
1980
another
small
commercial
building
through
D.L.
Wakelin
Developments.
According
to
Wakelin
in
1980
he
and
his
wife
vacationed
with
the
Fletchers.
During
casual
conversation
the
subject
of
real
estate
and
the
possibility
of
getting
into
the
market
came
up.
Wakelin
said
that
his
involvement
in
the
Campbell
River
MURB
encouraged
him
to
get
into
bigger
and
better
things.
When
Wakelin
returned
to
Duncan
he
spoke
to
George
Naylor,
a
realtor
with
whom
he
had
previously
dealt;
told
him
he
was
interested
in
a
property
for
a
project
and
asked
him
to
keep
his
eyes
open.
Shortly
thereafter
Naylor
informed
Wakelin
of
a
property
which
had,
according
to
Wakelin,
some
potential
for
a
townhouse
development.
The
land
had
been
proposed
for
subdivision
into
three
separate
parcels,
one
of
which
had
a
dwelling
house
located
upon
it.
The
owners,
who
themselves
were
realtors,
were
prepared
to
sell
on
the
condition
that
they
could
purchase
one
of
the
small
parcels
for
the
purpose
of
building
a
new
residence.
Concurrently
Naylor
offered
to
purchase
the
existing
residence
on
the
second
parcel.
According
to
Wakelin
these
requests
could
be
accommodated
since
the
plan
of
subdivision
proposed
would
still
permit
the
construction
of
a
townhouse
development
containing
13
or
14
units
on
the
remaining
parcel
of
land.
On
October
29,
1980
David
L.
Wakelin
and
Associates
made
a
conditional
offer
to
purchase
the
subject
property
at
a
price
of
$105,000
(Exhibit
A-3).
Possession
was
taken
of
the
property
on
January
30,
1981.
The
commitments
to
sell
the
two
parcels
were
ultimately
incorporated
into
interim
agreements
(Exhibits
A-8
and
A-9).
At
the
time
Wakelin
entered
into
the
agreement
of
purchase
and
sale
he
was
reasonably
certain
that
approximately
$78,000
of
the
purchase
price
had
been
assured
by
virtue
of
these
future
sales.
The
purchase
price
was
paid
by
way
of
$24,000
in
cash
with
the
balance
of
$81,000
financed
by
an
interim
loan
from
the
Bank
of
Nova
Scotia,
secured
by
a
promissory
note
and
a
collateral
mortgage
on
the
property.
The
mortgage
was
for
a
six-month
term
and
was
guaranteed
by
the
appellant
Fletcher
and
by
the
spouses
of
the
remaining
appellants.
According
to
Dr.
Wakelin
the
plan
was
for
the
appellants,
under
the
name
of
D.L.
Wakelin
and
Associates,
to
acquire
the
property;
sell
off
the
two
parcels
to
Naylor
and
the
vendor;
obtain
final
municipal
approval
for
the
subdivision
and
then
to
develop
a
13
or
14
unit
MURB.
The
construction
of
the
MURB
was
to
be
phased
over
a
number
of
years
with
the
first
phase,
four
units,
to
be
commenced
in
1981.
The
financing
required
for
the
purchase
was
arranged
by
Dr.
Wakelin
in
December
1980.
Construction
financing
was
to
be
arranged
at
some
point
of
time
in
the
future.
He
said
that
the
group
did
not
look
into
any
financing
for
the
development
of
the
project
at
that
time.
All
that
was
considered
was
that
the
development
would
be
phased
over
a
period
of
years.
He
explained
that
since
interest
rates
were
very
high,
in
the
neighbourhood
of
19
per
cent,
it
was
more
reasonable
to
borrow
$200,000
than
to
borrow
the
one-half
million
dollars
or
so
that
would
be
required
for
the
full
project.
He
believed
that
because
so
little
had
been
invested
it
was
possible
to
sit
on
the
land
for
a
year
or
longer.
A
MURB
development
was
their
sole
objective
and
he
understood
from
Mr.
Hayes
that
such
staging
was
possible.
Dr.
Wakelin
testified
that
it
was
important
to
him
from
the
financial
standpoint
that
the
land
be
developed
as
a
MURB.
He
himself
did
not
calculate
the
potential
MURB
tax
write-offs
but
left
that
for
his
accountant
Hayes.
Subsequently
Hayes
suggested
to
him
that
this
investment
be
"registered
in
his
wife’s
name"
because
she
had
some
income
and
no
property.
Although
Dr.
Wakelin's
evidence
is
somewhat
imprecise,
at
some
point
of
time
in
early
1981
he
learned
of
changes
to
the
rules
applicable
to
MURB
development
which
he
said
would
preclude
them
from
developing
the
property
in
stages.
The
changes,
whatever
they
were,
made
it
necessary
to
borrow
the
$500,000
needed
for
construction
at
the
high
interest
rates
then
prevalent.
Dr.
Wakelin
said
that
they
were
beginning
to
get
cold
feet.
At
approximately
the
same
time,
in
January
1981,
Dr.
Wakelin
had
a
discussion
with
his
lawyer,
Mr.
Kuta,
(now
deceased)
and
shortly
thereafter
received
from
him
a
conditional
offer
to
purchase
for
$115,000.
This
price
meant
that
the
amounts
to
be
received
for
the
other
two
parcels
would
have
been
an
immediate
profit
for
the
appellants.
Dr.
Wakelin
said
that
they
were
surprised
by
the
generosity
of
the
offer
but
never
seriously
considered
it,
because
they
intended
to
develop
and
rent
the
property.
The
appellants
ultimately
received
approval
to
subdivide
the
property
into
three
parcels.
As
prearranged
on
May
6,
1981,
two
were
sold
to
the
vendors
and
to
Naylor.
Prior
to
that
time,
in
March
1981,
Dr.
Wakelin,
over
a
game
of
golf,
mentioned
to
Naylor
his
interest
in
disposing
of
the
remaining
parcel.
Shortly
thereafter,
much
to
his
and
the
appellants’
surprise,
Naylor
produced
a
purchaser
who
offered
$180,000
for
the
property.
This
sum
was
far
beyond
their
expectations
and
recognizing
that
a
substantial
profit
could
be
made
without
the
risk
of
development,
the
offer
was
accepted.
The
property
was
sold
on
June
12,
1981,
producing
total
revenue
of
$258,000
resulting
in
a
net
profit
to
each
appellant
as
assessed.
As
I
have
indicated,
the
intentions
of
the
appellants
with
respect
to
the
acquisition
and
ultimate
disposition
of
this
property
is
most
readily
determined
by
an
assessment
of
the
conduct
and
assertions
of
Dr.
Wakelin.
He
alleges
that
the
appellants
acquired
the
property
for
the
specific
purpose
of
constructing
a
MURB
on
the
property
on
a
phased
basis
over
several
years.
This
development
was
to
be
a
long-term
investment
for
them.
These
assertions
must
be
weighed
as
against
other
established
facts.
A
number
of
factors
lead
me
to
reject
Dr.
Wakelin's
evidence
as
to
the
purpose
underlying
the
purchase
of
the
property.
Prior
to
its
acquisition
Dr.
Wakelin
had
shown
an
interest
in
real
estate.
Although
he
attempted
to
portray
himself
as
naive
in
that
regard
—
for
example
professing
surprise
at
the
amount
of
the
Kuta
offer
—
the
fact
of
the
matter
is
that
in
1980
he
was
quite
active
in
the
market.
He
acquired
the
Campbell
River
MURB,
he
purchased
a
small
commercial
building
and
invited
Naylor
to
look
for
other
properties.
He
was
quite
aware
of
the
boom
market
in
real
estate
and
of
the
fact
that
prices
were
rising,
stating:
I
assumed
it
would
go
up
in
price
—
property,
everything
at
that
time
could
go
up
in
value.
I
expected
that
value
in
land
could
rise.
The
reason
I
got
in
was
because
I
expected
the
market
to
continue
going
up.
With
respect
to
the
proposed
development
no
feasibility
study
was
ever
conducted.
There
were
no
approaches
to
any
lending
institution
to
determine
the
acceptability
of
the
project,
"phased"
or
otherwise.
No
projections
of
cost
were
made
to
fix
in
their
own
minds
at
the
very
least
the
degree
of
financial
liability
to
which
they
could
be
exposed.
Aside
from
three
or
four
very
basic
sketches
prepared
by
Fletcher
(Exhibit
A-10)
no
other
plans
were
prepared
or
considered.
There
was
no
professional
analysis
of
development
costs
and
Dr.
Wakelin's
assertion
that
$500,000
would
be
required
was
predicated
on
Fletcher’s
rough
estimate
of
$55,000
per
unit
based
on
what
he
called
an
average
cost
per
square
foot.
If
they
truly
intended
to
develop
a
13
or
14
unit
MURB
these
numbers
on
the
face
of
it
are
inconsistent
and
in
my
view
were
numbers
which
no
reasonably
prudent
investor
would
have
relied
upon.
Neither
Dr.
Wakelin
nor
the
appellants
considered
in
any
serious
way
the
length
of
time
such
a
development
might
take
to
complete
and
market,
nor
did
any
of
them
have
any
experience
in
that
field.
Fletcher's
involvement
warrants
comment
at
this
point.
Although
not
as
financially
secure
as
the
other
three
appellants
(and
their
spouses)
he
agreed
to
participate
in
this
venture.
The
arrangement
made
with
Dr.
Wakelin
was
that
he
would
invest
the
sum
of
$6,000
and
would
provide
his
expertise.
This
arrangement
appears
to
have
preceded
the
involvement
of
some
if
not
all
of
the
other
appellants.
There
was
no
evidence
before
me
as
to
how
it
was
hoped
to
protect
Fletcher
from
further
liability
in
the
event
the
project
did
get
off
the
ground
and
substantial
funds
were
to
be
borrowed
for
construction.
Fletcher
said
he
could
not
afford
very
much,
perhaps
$20,000
as
a
maximum.
He
also
stated
that
he
never
expected
that
he
would
have
to
put
up
that
money.
It
is
significant
that
the
Campbell
River
acquisition
was
made
almost
contemporaneously
with
the
purchase
of
the
land
in
issue.
No
evidence
was
heard
as
to
how
this
purchase
was
financed
or
whether
Fletcher
was
in
a
position
to
carry
both
properties
for
any
length
of
time.
All
of
these
facts
tend
to
put
into
question
the
stated
intentions
of
the
appellants.
With
regard
to
Fletcher's
expertise
I
note
that
he
is
an
architectural
draftsman
with
no
experience
in
designing
townhouses
or
similar
projects.
He
is
not
qualified
to
certify
building
plans
nor
does
he
appear
to
have
had
any
experience
as
a
project
manager
or
supervisor.
Implicit
in
this
lack
of
experience
is
the
fact
that
before
the
Municipality
would
issue
the
requisite
construction
permits
all
final
plans
would
have
to
be
certified
by
an
appropriately
qualified
engineer
or
architect.
These
matters
do
not
appear
to
have
been
addressed
by
the
appellants.
Taking
the
Fletcher
involvement
one
step
further,
there
was
no
partnership
or
association
agreement
of
any
kind,
nor
had
the
appellants
considered
it
necessary
to
agree
or
even
to
discuss
the
specifics
of
Fletcher's
involvement,
in
terms
of
money,
time
or
expertise.
It
is
extraordinary,
to
say
the
least,
that
the
appellants’
approach
was
so
casual,
particularly
in
view
of
Fletcher's
limited
financial
means.
Wakelin’s
assertions
as
to
the
appellants’
intentions
must
also
be
weighed
in
light
of
the
manner
in
which
the
initial
financing
for
the
purchase
was
arranged.
In
this
context
some
interesting
comments
are
to
be
found
in
the
application
for
credit
made
by
David
L.
Wakelin
and
Associates
to
the
Bank
of
Nova
Scotia
on
December
23,
1980
(Exhibit
A-1).
The
application
was
prepared
by
Mr.
D.W.
Watkin,
the
manager
of
the
Bank
during
the
relevant
time.
In
it
Wakelin
was
described
as
a
preferred
and
valued
customer.
Watkin
also
knew
Mrs.
Wakelin
and
was
acquainted
with
Dr.
and
Mrs.
Polack
and
with
Mr.
Hayes.
Mr.
Watkin
described
the
application
as
a
mechanism
by
virtue
of
which
an
analysis
of
risk
was
prepared
for
the
Bank.
The
summaries
contained
in
it
presented
options
with
respect
to
the
property
in
the
eventuality
of
default
or
some
other
similar
circumstance
and
reflected
to
a
great
extent
his
own
conclusions
as
to
the
viability
of
the
loan
from
the
Bank’s
perspective.
He
was
not
able
to
specifically
attribute
any
comments
contained
in
the
applica-
tion
to
Wakelin
(or
to
any
of
the
other
applicants)
but
did
recall
reviewing
the
risk
aspect
with
him.
As
to
whether
development
and
resale
were
discussed
Watkin
said
that
both
were
relevant
in
any
assessment
of
credit
and
that
willingness
to
resell
was
a
subject
which
would
have
been
broached
because,
as
a
general
rule,
he
would
have
endeavoured
to
elicit
the
applicants'
views
in
that
regard.
He
did
not
specifically
recall
discussing
the
real
estate
market
but
was
aware
that
"properties
were
moving
extra
fast”
and
that
“it
was
a
boom
market".
In
his
assessment
of
Dr.
Wakelin
he
formed
the
opinion
that
he
probably
was
aware
of
the
market
situation.
In
the
application
Watkin
wrote
that
the
Bank
was
approached
by
Messrs.
Wakelin,
Polack,
Hayes
and
Fletcher
to
assist
“in
the
purchase
of
a
piece
of
commercial
property
for
resale
and/or
development".
In
the
fifth
paragraph
Watkin
set
out
two
options
available
for
the
future
disposal
of
the
property.
The
first
dealt
with
interim
financing
prior
to
the
development
of
the
property.
Watkin
noted
that
the
loan
balance
would
be
reduced
to
$6,250
following
the
sale
of
the
two
smaller
parcels
and
comments,
"The
balance
could
be
paid
in
full
from
the
partners'
incomes
with
ease.”
The
partners
referred
to
were
not
the
appellants.
He
further
comments
that
"The
financing
for
the
MURB
will
be
processed
through
the
usual
long-term
financing
agency.
We
do
not
expect
an
application
for
this
part
of
the
program."
With
respect
to
Option
B,
Watkin
noted
"Same
as
Option
A,
but
the
remaining
1.34
acres
would
be
sold
instead
of
developed."
Paragraph
7
of
the
application
contained
a
comment
which,
according
to
Watkin
accurately
reflected
the
applicants'
statements.
It
reads:
The
associates
have
requested
the
loan
be
drawn
in
their
spouse's
names
in
view
of
the
capital
gains
once
the
properties
sell.
The
loans,
of
course,
will
be
guaranteed
by
the
associates.
All
interest
payments
will
be
net
[sic]
from
their
incomes.
Watkin
recommended
credit
approval
and
as
one
of
the
supporting
factors
stated,
"Good
security
of
highly
marketable
commercial
property
(presently
at
a
premium
in
Duncan)."
Dr.
Wakelin's
recollection
of
this
meeting
was
vague.
He
was
unsure
whether
he
attended
the
meeting
alone
or
whether
Hayes
was
present.
He
did
not
recall
discussing
the
various
matters
referred
to
in
the
application.
Hayes
in
fact
did
attend
this
meeting
but
he
too
was
not
able
to
recall
the
specifics
of
the
conversation.
I
am
satisfied
that
Watkin's
evidence
and
the
application
(Exhibit
A-1)
accurately
reflect
the
discussions
at
that
meeting.
Notwithstanding
the
appellants’
assertions
that
they
acquired
the
property
as
a
long-term
investment
I
am
satisfied
that
they
had
no
serious
plans
to
build
a
townhouse
development
thereon.
They
made
no
arrangements
whatsoever
for
long-term
financing;
they
made
no
projections
as
to
the
cost
of
construction;
they
made
no
assessment
of
the
rental
market,
nor
did
they
consider
the
type
and
quality
of
rental
accommodation
in
demand.
On
the
other
hand
they
were
aware
that
the
prices
of
real
property
were
rising
swiftly
and
they
knew
that
with
the
sale
of
the
two
smaller
parcels
their
financial
exposure
at
that
point
of
time
was
minimal.
The
contention
that
certain
changes
in
the
rules
relating
to
the
construction
of
MURBS
forced
them
to
abandon
their
"phased
development"
concept
does
not
stand
up
to
close
scrutiny.
I
content
myself
by
saying
that
the
evidence
of
Dr.
Wakelin
and
Hayes
on
this
issue
was
neither
consistent
nor
plausible.
I
am
convinced
that
at
all
relevant
times
the
possibility
of
selling
the
property
was
an
operating
motivation
of
Dr.
Wakelin
and
of
the
appellants.
In
many
respects
Wakelin
and
the
appellants
dealt
with
the
property
in
the
same
manner
as
a
dealer
in
such
properties
would
ordinarily
have
dealt
with
it.
The
purchase
and
sale
were
clearly
a
simple
adventure
in
the
nature
of
trade.
The
appeal
is
dismissed.
Appeal
dismissed.
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