Taylor,
T.C.J.:
—These
are
appeals
heard
in
Toronto,
Ontario,
on
February
23,
1988,
which
the
parties
agreed
should
be
determined
together,
since
there
was
only
a
single
point
at
issue.
The
parties
further
agreed
that
the
notice
of
appeal
and
the
reply
to
notice
of
appeal
should
constitute
the
basis
of
argument
on
the
point
at
issue.
The
dispute
centred
around
the
calculations
involved
in
the
Minister
arriving
at
the
amount
of
the
reserve,
under
the
provisions
of
subparagraph
40(1)(a)(iii)
of
the
Income
Tax
Act,
which
could
be
claimed
by
the
appellants
arising
out
of
the
gain
realized
on
the
sale
of
three
parcels
of
property.
That
amount
of
reserve
determined
by
the
Minister
with
regard
to
the
assessments
at
issue
for
the
taxation
year
1981
was
$752,310.
In
the
reply
to
notice
of
appeal
counsel
for
the
respondent
amended
that
to
$755,808,
and
agreed
that
the
appeal
should
be
allowed
to
the
extent
of
the
difference
($3,498),
but
did
not
agree
to
more.
The
position
of
counsel
for
the
appellants
was
that
the
reserve
should
be
increased
by
a
further
$328,271.
In
support
of
his
contention
counsel
for
the
appellants
submitted
to
the
Court
four
documents
--
three
of
which
allegedly
were
"reporting
letters"
from
firms
of
solicitors
involved
with
the
sale
transactions
noted
above,
and
one
of
which
was
a
form
of
personal
guarantee
from
the
three
appellants
to
a
bank
in
connection
with
the
provision
by
that
bank
of
certain
credit.
Counsel
for
the
respondent
did
not
raise
any
objection
to
the
filing
of
these
letters,
but
noted
in
her
argument
that
they
were
unsupported
by
any
other
evidence,
testimony
or
verification.
In
her
view
the
Court
could
not
accede
to
the
appellants’
request
based
on
that
information.
I
am
far
from
convinced
that
even
if
taken
into
account
in
their
widest
favourable
interpretation,
these
four
documents
would
serve
to
show
that
the
calculations
made
by
the
Minister
for
purposes
of
the
assessments
and
this
hearing
were
in
error.
The
documents
themselves
are
not
of
value
in
the
determination
of
the
matter
before
the
Court.
They
are
totally
unsubstantiated
and
the
Court
has
no
reason
to
accept
that
they
represent
the
interpretations
placed
upon
them
by
counsel
for
the
appellants.
In
my
view
for
these
documents
to
have
viability
at
this
hearing,
support
for
the
information
contained
in
them
would
be
required
as
well
as
a
set
of
complete
calculations
showing
the
value
and
propriety
of
that
information
to
the
appellants,
and
a
demonstration
that
allowances
had
not
already
been
made
by
the
Minister.
The
contention
of
the
appellants
that
further
allowances
should
be
made
in
the
relevant
calculations
for
the
"promissory
notes"
or
"mortgages"
referenced
in
the
documents
and
allegedly
outstanding
at
the
date
of
sale
of
the
properties
has
not
been
shown.
The
appeals
are
allowed,
without
costs,
and
the
matter
is
referred
back
to
the
Minister
for
reconsideration
and
reassessment
on
the
basis
that
the
calculations
of
the
reserve
at
issue
shall
be
increased
by
an
amount
of
$3,498
(from
$752,310
to
$755,808).
The
appellants
are
entitled
to
no
other
relief.
Appeals
allowed
in
part.
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