Edward T. Zimmer, Alfred Zimmer, Edna R. Zimmer, William v. Zimmer, and Dorothy Porter, Executrix of the Estate of Sadie Armor v. Minister of National Revenue, [1988] 1 CTC 2443, 88 DTC 1321

Taylor, T.CJ.:—These are appeals (a total of 10 in number) heard on common evidence in Calgary, Alberta, on September 3 and 4 and on November 17 and 18, 1987, against income tax assessments for the years 1978 and 1979 for the Estate of Sadie Armor, and for the years 1979 and 1980 for the balance of the individuals concerned. In general terms the first two days of the hearing were taken up by evidence and testimony on behalf of the appellants and the second two days by the presentation of the respondent, the rebuttal evidence from the appellants, and argument by the parties. The basic issue in itself is a simple one — V-Day value of some parcels of real estate in the Calgary area, certainly one on which there is an ample supply of income tax case law. Using portions of the appeal for Alfred Zimmer for the taxation year 1980 as indicative for general purposes of all of the appeals, and the Minister's reply thereto, the conflict between the parties can be set out, even though details with respect to each year under appeal may differ:

From the notice of appeal

— Valuation Day valuation as established by the Real Estate Section of Department of National Revenue is unrealistic and is not supported by comparable valuation data.

— Appellant submitted formal appraisal report to D.N.R. to substantiate V-Day value of $15,000.00 per acre for City land and $8,000.00 per acre for land located outside City boundary and which Appraisal Report relates to comparable valuation data.

Reply to notice of appeal

— He (The Respondent) admits that the Appellant has submitted a formal appraisal report with values of $15,000 per acre for city land and $8,000 per acre for non city land.

— In computing the income for the 1980 taxation year, the Appellant reported the disposition of property on the basis that its fair market value on valuation day was $8,000 an acre.

— The Respondent reassessed the Appellant for the 1980 taxation year on the basis that the fair market value of the property on valuation day was $3,500 an acre.

— On 31 December 1971, the Appellant and four brothers and sisters (the "group") owned, in five equal shares, land located in the NW 1/4 27-24-2-W5 which was zoned as agricultural property.

— On April 1980, the group sold to The Beca Corporation Ltd. a 1.54 acre parcel for $23,100 and a 112.04 acre parcel for $1,680,600. The two parcels were part of the land referred to in paragraph 5(a).

During the trial, there were numerous questions raised regarding procedure, matters of points of order, and in particular motions dealing with admissibility of certain documentation or testimony. Some of the time delays which arose in the hearing of these appeals may be attributable to this Court's efforts to be as informal and flexible as possible in giving to the appellants full opportunity for presentation, while at the same time acknowledging the accepted rules of court procedure in such matters, as they have been used and demonstrated in this Court. It is understood that to this point in time, this Court has not yet adopted a specific and comprehensive set of rules. In this context, the Court would like to review the fundamental submission (made at the close of the case) by counsel for the appellants:

(A) . . . it's my contention, sir, that we filed the returns, we provided supporting appraisals with it, and the Department, through some means or other, has elected to not accept our figures and have utilized these other figures to which I have just referred. I have been bothered over the process of the hearing, as I think, as I have reiterated earlier, — what is it that I am supposed to be meeting here? The issue here is not the matter as to which appraisal is right or is wrong. The issue before the Court is the V-Day value as it relates to the tax return. So, it's a matter involving the Tax Department, as opposed to their appraisers.

The Tax Department, in their wisdom, has come up with some figures, and it’s my contention, sir, that evidence has got to be led to support those figures. We are in a Court of Law. We have taxpayers who have filed their returns, have supported them with an appraisal. We know what those figures are. We have brought evidence before the Court to support those figures and I suggest to you, sir, that there's no evidence before the Court to support the Department's figures.

They have figures out there, but the appraisers who gave evidence here did not prepare their reports for the purpose of the reassessment, and I raise that as a very serious question because we are now in a Court of Law as opposed to a Tax Review Board, and I suggest to you, sir, that the taxpayer has the right to be able to meet the case that's before the Court and I've had considerable difficulty in attempting to determine what that is, and that is, am I trying to lead evidence to limit or speak against the valuations of the Department, or am I trying to lead evidence, or in one way or the other, direct our cross- examination to deal with the appraisal evidence.

We have the evidence of Mr. Schmitt and we have the evidence of Mr. Stevenson and their appraisal values for the particular lands in question are not relative to the figures which are being utilized and somebody might say to me, well, Mr. Maxwell, that's the way it is. That's the way it works. And I say, what do you mean that's the way it works? We are in a Court of Law and I suggest, sir, that it was incumbent upon the Department to lead evidence to support how they arrived at these reassessments. We had to file the returns, we have filed the returns, they have assessed them — reassessed them in their capacity, and said we have to pay a different amount of tax by virtue of their reassessment.

But, what is here in support of that? And I say that there is nothing before you which, in a Court of Law, that our clients, as taxpayers, can get to those particular figures because I suppose that if you don't accept our arguments, then it would mean that you are sustaining the $5,000 and $3,500 amounts, but what is before you to sustain those amounts? You don't know how they arrived at them.

And, so, sir, I ask that weight be placed on that because we are in a Court of Law. To me, it's a denial of natural justice to have the taxpayers brought before the Court. We've heard that there's been a number of appraisal reports prepared and what is it that they are supposed to meet, and I think that's a very serious question.

. . . I've heard your comments on the basis that we must sustain the $8,000, $9,000 and $15,000. We haven't brought in any evidence of comparables, of those dollar amounts, but as Mr. Rollheiser* has said, that there are no exact comparables, . . .

(B) Now, the emphasis of the Appellant, sir, is on the basis that the highest and best use of the land was for some purpose other than the agricultural use that was ascribed to it. The highest and best use, and you don't need me to repeat it again, but I think that the definition referred to in Mr. Stevenson's report is that it is that legal use which will yield to the land the highest present value sometimes called optimum use. The use must be probable, the use must be such as to return to the land the highest net return. The use must be such as to deliver the return for the longest period of time, and this is where I place great emphasis on the fact that we have this land to which our appraiser has ascribed a potential commercial development prospect to it, and I say that the attributes of the land afford the Appellants these valuations.

I suggest to you, sir, that the lands, by their nature, by their location, are ascribed with a commercial potential. That, as I stated in cross-examination, and that if our client stood on their lands in 1971, and this is what we're really saying here, we're standing on the lands and we're saying, the Armors and Zimmers are saying this has potential commercial and mixed development. The Minister is standing on the land and he says, no, you're wrong.

Now, if they were doing that in 1971 I suppose it would be pure conjecture and so therefore the Minister can say, no, there's been no development out here, and Mr. Zimmer, and Mrs. Armor, I believe you're wrong.

But because of circumstances, we are here now some 16 years later and we have had the benefit of what has happened since. And as Mr. Carroll has said, that you must consider history. The highest and best use says it mustn't be conjectural, but I'm saying to you, sir, that the appraisers for Revenue Canada are being conjectural because what they're saying is that you must close your eyes and you can't say today that in 1971 that this would have happened, as it did happen, and that we know, as I stated earlier, the single fact that we know is that the lands were sold for those figures which are referred to in the Reply of the Minister and referred to in the appraisal report of Mr. Stevenson. Very substantial figures.

So, the question is, how do we determine what the value was in 1971, and as I said, alluded to earlier, that they do have the benefit of knowing that the position of the taxpayer who says, by virtue of my appraisal, I ascribe some commercial, some greater development potential than just straight agriculture. I mean, it did prove to be correct.

The conjecture is to say, oh, no, that's pure conjecture. I don't want to know what happened to it. But, in these circumstances, we do know what happened to it and it isn't the case of the farmer who is six miles from Calgary and says, in 1971, well, you know, the city is really growing and ! think the city is going to be out here very soon and so therefore, Mr. Minister, I want to ascribe to my land a certain commercial development potential, and that isn't relevant.

So, what is the land going to be used for? The Department wants the taxpayer to accept the proposition that it really didn't have any potential for a use other than agriculture, or maybe some commercial but we're not going to give too much credence to that.

As I have indicated, and as I trust the above quotations demonstrate, there was some degree of doubt raised by the appellants regarding — in effect — the onus or responsibility for carriage of this matter, and in particular the degree of "proof of position” to be attributed to the respondent under these circumstances. It seemed to be the basic contention of the appellants (see above) that having filed an income tax return, and provided an appraisal report in support of the valuations used therein, that the appellants’ responsibilities were thereby discharged, and variations from or changes to these submitted figures made by the Minister required that such adjustments be substantiated by the Minister. It may well be that the progress of time will bring about some movement in that direction, but it is my understanding that is not the state of the law at the moment. As matters stand now, the primary responsibility with regard to overturning an assessment of income tax rests with the taxpayer, as much in a "valuation" case as in any other kind of case. It is an old adage that the original submissions of the information upon which a taxpayer has self-assessed himself, is within the knowledge and capacity of that taxpayer, not the Minister. One cannot quarrel with the assertion implicit in the argument of counsel for the appellants (see above) that the Minister should normally and regularly accept the filing and the supporting evidence as sufficient. But normally and regularly does not include a situation where in the Minister has valid reasons to question the submissions and even prepare a different taxation result — which is the effect of an assessment or more likely a reassessment. When the taxpayer challenges the Minister’s reassessment, it is then up to that taxpayer to examine and review the basis of his original submissions and to be prepared if called upon to do so as Mr. Maxwell puts it in a "Court of Law" to prove the validity of his submissions. In my view if no reasonable case is made by the appellant during such proof, to substantiate the valuations provided, then the purpose to be served by the Minister presenting documented evidence and testimony in support of the assessment is at the least questionable. But that is a procedural point to be determined by counsel for the Minister. In reference to this perspective I would quote from Silver Rapids Holdings Ltd. v. M.N.R., [1987] 2 C.T.C. 2065 at 2066; 87 D.T.C. 413 at 414:

I do agree with the judgment in Dubbel Wear Holdings Ltd. v. M.N.R., [1981] C.T.C. 2348; 81 D.T.C. 351, wherein on page 2350 (D.T.C. 353) it states:

The onus in an appeal such as this is on the Appellant. It is not enough for the Appellant simply to attempt to cast doubt on the value used on assessment. In order to succeed the Appellant must affirmatively establish, on the balance of probabilities, that the value used by the Minister is too low and he must show, with some degree of accuracy, by how much.

Similar sentiments were expressed in Eric W. Levis v. M.N.R., [1983] 2122 at 2124; 83 D.T.C. 104 at 105:

. . . As I see it, the appellant has failed to establish even a prima facie case for the valuation he used in filing his tax return for the year of $375,000, and certainly not for the $416,000 estimate suggested by his appraiser, or any figure remotely approaching either one of them.

In this matter, while the appellant's appraisal report was insufficient in itself to fulfill the appellant's responsibilities (see later), when taken in the context of the testimony of Mr. Charles Stanley Reid, president of the Corporation, there were good reasons advanced to look carefully at the appellant's contentions.

As I see it, that disposes of the main argument of Mr. Maxwell, point "A" from the quotations of the argument (see above), and leaves to the Court the determination whether that presented as "proof" on behalf of the appellants did in fact substantiate the valuations prepared by the appellants, or at least that there were "good reasons advanced to look carefully at the appellant's contention" (See Silver Rapids Holdings Ltd., supra). I shall return to that point at a later time in this decision.

The second proposition — Point "B", put forward in argument by Mr. Maxwell is that the lands in question “are ascribed with a commercial potential, supra. This argument is best understood from the perspective, according to Mr. Maxwell, that in 1971 the then owners (now the appellants) could foresee substantial, in fact considerable development potential for their lands, and regarded the lands (in 1971) as worth several millions of dollars. That argument, or species of argument has been raised in many circumstances before — in effect, it says — "who should know better than the owner what potential the land holds?”. The fallacy in the argument is self evident — and it is the basic reason for appraisers and appraisal reports as a main part of the evidence required by this Court. There must be demonstrable proof that outside parties — third parties — also held a similar opinion of the value of the land, and that there was interest, indeed possibly prospective purchasers at the valuations contended. That a landowner — particularly one whose interest, and family interest, extended back many decades, should take a certain satisfaction from looking at the lights of Calgary gradually approaching (over the years) nearer to his ranch land is not surprising. That "owner perspective" must only be taken though with full regard for the fact that there probably were competing tracks of land in similar, if not identical "potential development" situations. Mr. Maxwell would like the Court to ignore the fact that little or no real development has occurred on the subject lands since 1971, but that proposition falls of its own weight. He is proposing in effect that the Court accept (as the main or even sole proof) the visions of development held by the owners in 1971, while rejecting the facts which arise out of the subsequent actual events. That is not to say, that the optimistic view of value held by any owner should be ignored by the Court, and indeed it should be (if presented) listened to with care and caution. But to propose that this should be the main — perhaps sole — criterion, upon which a critical income tax assessment should be based does not appear to me to be sound reasoning. That leaves up to the appraisers presented by the appellants (or some other equally acceptable proof) to take such a “potential development" realistically into account when presenting evidence.

Before returning to the specifics of the instant case, I would like to add a few comments regarding the "exclusion of witnesses" and the “calling of rebuttal evidence" — both matters which arose as further points of some contention in this trial. At the commencement of proceedings counsel for both parties agreed that "witnesses" should be excluded — an agreement to which the Court obviously had no objection. The taxpayers who were present themselves, were not excluded from the proceedings — neither party raised the point, and although it was not known at the outset, none of the taxpayers involved gave evidence. Both parties however, did request that one of their own experts (appraisers) in each case be permitted to remain in the courtroom during the proceedings — and the Court was informed that each one would very likely be called as an expert witness — to give opinion evidence; the respondent's witness (a Mr. Schmitt) to be one of the main witnesses for the Minister, after having heard the witnesses and testimony already presented on behalf of the appellants; and the appellants’ final witness (a Mr. Carroll), who would give "rebuttal" evidence — in his case after hearing all the appellants previous testimony, and that of Mr. Schmitt. The prospects for conflict were highlighted by each party, but to their credit, both counsel agreed to the proceedings in that manner. While appreciated by the Court, that agreement did little to lessen, in my mind, the question of standard appropriate procedure.

As I noted earlier, the development of "rules" for the conduct of this relatively new and “informal” Court are proceeding, and given that set of circumstances, this Court generally provides considerable latitude in presentation to an appellant — in order to meet the onus of proof referenced earlier, and this was provided in this matter. It would be imprudent, perhaps impudent of me to review this critical and well-examined subject of "witnesses" in too much detail, and I therefore restrict my remarks to a recognition that under a given set of circumstances, there could easily be something less than total agreement between (or among) the parties to an income tax dispute regarding "exclusion of witnesses", and/or of "witnesses" themselves. In that connection I would refer to the following:

Exclusion of Witnesses —

Carswell, Toronto, (1982)

Report of the Federal/Provincial Task Force

on Uniform Rules of Evidence —

Chapter 22 at 277.

J. Sopinka & S.N. Lederman —

The Law of Evidence in Civil Cases

(Toronto: Butterworths 1974 at 461.)

Tomlinson v. Tomlinson — [1980] 1 ALL ER 593

Finally, to return to the specifics of these appeals, the basic facts are:

For the Estate of Sadie Armor:

(1) The taxpayer had owned the property in question for many years before December 31, 1971 (V-Day).

(2) The property consisted of approximately 112 acres described by the respondent in the reply to notice of appeal as "adjacent to Calgary”.

(3) The gross proceeds of disposition in 1978 amounted to $1,790,000 — (about $16,000 per acre).

(4) The V-Day value used by the appellant was $1,008,000 — ($9,000 per acre — for 112 acres).

(5) The V-Day value used by the respondent was $560,000 — ($5,000 per acre).

(6) Use of the "reserve" clauses of the Income Tax Act placed some of the gains in 1978 and some in 1979.

For Alfred Zimmer (representative of "the group”) — (see below):

(1) The property in question had been owned for many years before December 31, 1971 (V-Day) by "the group” which consisted of Alfred Zimmer, four brothers and sisters — all appellants.

(2) The property consisted of a parcel variously described in the documents and appraisal reports as some 127 acres more or less, zoned as “agricultural property" and "adjacent to the Calgary city limits”.

(3) In 1979 a parcel of some 13.5 acres inside "the city limits" was sold for $540,000 or about $40,000 per acre.

(4) In 1980, a parcel of 1.54 acres was sold for $23,100 and the balance (112.04 acres) for $1,680,000 — about $15,000 per acre. (See Note below).

(5) The V-Day values ascribed to the property by the appellants were $8,000 per acre for rural land and $15,000 per acre for the city land.

(6) The V-Day values used by the respondent weres $3,500 per acre for the rural land and $5,000 per acre for the city land.

As a matter of further general description, the Court notes that the two parcels ("Armor" and "Zimmer") were contiguous parcels with one side of each bordering the Trans-Canada Highway along the western edge of the City of Calgary. In a very rudimentary way, the parcels contained some aspects of an original land grant, represented by 1/4 section (160 acres) in each case, portions of which had been sold off or deeded to other parties over the years. The portion of the City of Calgary which bordered the side of the Trans-Canada Highway across from the subject properties was in the main the furthest west that Calgary had developed by 1971. That part of the area — in the City of Calgary on the opposite side of the Trans-Canada Highway (locally described as North of the Trans-Canada Highway), has developed considerably more since 1971, but the area on the subject side of the Trans-Canada Highway (locally described as South of the Trans-Canada Highway) remains not dramatically different from its utilization and configuration in 1971 — that is certainly true of the subject properties at least.

And so it falls to the appraisal reports for the appellants, presented by Mr. Rollheiser, who was accepted by the Court as an expert witness, to support the appellants' contentions. I would agree that in his summation of the evidence Mr. Maxwell, counsel for the appellants, put the best possible spin on the testimony of Mr. Rollheiser:

. . . We haven't brought in any evidence of comparables, of those dollar amounts, but as Mr. Rollheiser has said, that there are no exact comparables, and I believe that this is supported by what Mr. Schmitt says, and what Mr. Stevenson says, that there are just no exact comparables, and there's a comment which I'll read out of a case later which says that, you know, that would be utopian to have that, but we're not — we're very seldom afforded that opportunity.

What we're dealing with is trying to utilize the best comparables we have and allowing adjustments for the positive and negative features of those particular properties.

In saying this I do not ignore the expert testimony of Mr. Carroll, but it was submitted as “rebuttal evidence" — that is in rebuttal to that of the Minister's appraisers — Mr. Schmitt and Mr. Stevenson. Properly, there was no suggestion by Mr. Maxwell that it was to be regarded as evidence-in-chief. Nor do I ignore the testimony of a Mr. Dewit — a gentleman called by the respondent, but whose evidence did little to support the Minister's case. But I shall comment later on regarding Mr. Dewit. Simply put, there were numerous examples brought out under cross-examination, of inconclusive, indeed contradictory information in the testimony and reports of Mr. Roll- heiser, which information would have had the effect of casting serious doubt on any mathematically calculated result determined from the comparables used. The positive attributes from the reports were that the reports were prepared in the 1978-1979 period directly related to the sale of the subject lands, and that Mr. Rollheiser himself appeared to be intimately knowledgeable of the subject properties as well as several of the surrounding properties, even some of those he referred to as comparables. For these reasons the Court, and it should be said counsel for the Minister, accorded Mr. Rollheiser considerable latitude in presenting his information. The negative factor is that Mr. Rollheiser’s methodology in arriving at his vital number of $15,000 per acre “city land”, and $8,000 per acre “rural land" for Zimmer, and $9,000 per acre for Armor (all rural) leaves much to be desired. Only the most tenuous relationship has been demonstrated between the subject lands in 1971, and any of the properties listed by Mr. Rollheiser as comparables — one or two have the size but not the location, others a reasonable location, but not the size, still others with better access and surrounding development. Perhaps Mr. Rollheiser did the best he could do under the circumstances in 1978 or 1979 reviewing a 1971 situation, since he found no close "comparables".

Mr. Rollheiser’s failure even against such odds, is that he did not make any logical, reasonable, and traceable pathway or pattern between his "comparables" and the results. My summation of his testimony and evidence is that he decided in 1978 that the subject properties must have been very valuable (probably unique) in 1971, and he rationalized (in 1978) that the properties had "highway industrial" potential, whatever that is or can be construed to be. I cannot accept any claim that he would have held that same opinion in 1971 as a professional appraiser if he had done the work in that year. I am satisfied that an individual, certainly an owner of property looking at the awakening of development in the 1960's and early 1970's in Calgary might well have dreamed of expansion reaching out into the ranch country in the future. The recent building and opening of the Trans-Canada Highway certainly added fuel to such thoughts. But it is not my opinion that a professional appraiser should permit his personal view of the future to cloud his vision to such a degree that it becomes the basis for his own report. Mr. Rollheiser did not assert that the primary destiny of the subject properties (in 1971) was for residential (even acreage size lots), but rather the "highway industrial” perspective gained his approval. As I see it, even in 1987, certainly in 1978, and most definitely in 1971, to consider or have considered the prospect of some kind of industrial development, in the immediately foreseeable future, virtually over the entire 220 or 240 acres of land involved would be totally unsupportable. But that is precisely what was done by Mr. Rollheiser. There were certain patches of industrial and commercial development in 1971 mainly along or adjacent to the Trans-Canada Highway and in the vicinity of the subject properties. I might have been persuaded that there was some limited logic in a proposition that envisaged strip development near the Trans-Canada Highway on that side bordering the TransCanada Highway — but such a proposition (attributing industrial or commercial growth to a small part of the subject property only) was not put forward by the appellants. The land in question was and is rural and suitable for limited purposes associated therewith. It was adjacent to the City of Calgary during the times relevant to these appeals, and the evidence was that in 1985 the subject lands were actually annexed to the City of Calgary. There was no evidence brought out to indicate development activity of substance related to that 1985 annexation, even subsequent to it or dependent on it. If one were doing a valuation of the subject lands in 1985 and taking into account reasonably anticipated future development, some modest part of Mr. Rollheiser’s propositions made for the year 1971, might be in order, but that is not our problem.

Although great emphasis was placed on it — from directly opposite perspectives — by both counsel, I would mention only in passing the sale in 1972 of a small corner (about 15 acres) of what had originally been the Armor land from a Mr. Smart to a Mr. Dewit for $80,000 — which included a house and some other improvements. The 15 acres had been sold by Armor to Smart before 1971 and was used as a residence, then resold to Dewit for his own use as a residence, as well as using it as a small plant nursery. This triangular-shaped piece of property was directly adjacent to a connection in the traffic circle part of the Trans-Canada Highway. Many of the major area highway developments came after purchase by Smart from Armor and even after purchase by Dewit from Smart. Many efforts were made by counsel (particularly Mr. Maxwell) to read into the "per acre price" of the Dewit land some support for the appraisal numbers per acre arising out of the Roll- heiser reports. Since Mr. Dewit eventually sold all his property (the same 15 acres) for a very substantial sum of money (in excess of $1 million), I understand why the appellants in this matter would like to make some association between the sale in 1972 to Dewit and the value of their lands in 1971. But I fail to see any — the testimony, both from the appraisers and Mr. Dewit supports only one conclusion — that at the time of sale to Smart, this tiny corner was the most attractive of all the subject property (geographically, environmentally, physically, etc.) for the particular residential purposes of Mr. Smart — and that continued (with some added individual requirements) for Mr. Dewit. To ascribe to the balance of the subject property — rugged and almost inaccessible in a major way, except for a relatively small portion near the Trans-Canada Highway, characteristics and residential attractiveness similar to the Dewit property does not appear at all reasonable to me.

In rejecting the Rollheiser appraisals, I would simply quote from one of his own explanations:

Q. What is the significance of those properties to which you refer as comparables?

A. Well, I started off with a prime piece of land, prime location and I started off to try and get the comparables closest to the subject lands, Zimmer's and Armor's, as possible. And I might say, it was very hard getting anything comparable because some of them were smaller and some of them didn't have access so I tried to get as many comparables as close to the subject lands and with good values.

I started on the major premise that I had appraised the best pieces of lands, the best piece of lands in the area with the best access, with the best title and I tried to get comparables. I ended up with eleven inferior comparables but the best comparables as to being a comparable.

I reject the basic perspective of Mr. Rollheiser that the subject properties exhibited in 1971 any characteristics for the purposes which he attributed to them, or that they represented at that time "prime pieces of land". They were in 1971 rural lands with limited agricultural value, holding a long range

— very long range — prospect for development which could be appropriate and consistent with that arising in and around the City of Calgary and the Trans-Canada Highway. There was and is no indication that development could be “highway-commercial” except in a very modest way. It could be some form of “acreage residential”, but that is just speculation, and not a requirement of this judgment to determine.

A major portion of the time of the appeals was taken up by the efforts of counsel for the appellants to show that, even if the appellants' own appraiser had not established a case, the case for the respondent's number was equally weak. In my view these appeals must be dismissed because of the lack of acceptable proof brought forward by the appellants and dismissed they will be. But it would be doing a disservice to the efforts of counsel for the Minister, and his appraisers — Mr. Schmitt and Mr. Stevenson, as well as to the rebuttal efforts of Mr. Carroll for the appellants, to finalize the matter without some comments.

The reports and testimony of both Mr. Schmitt and Mr. Stevenson recognized that it was a difficult task to provide viable comparables to the subject properties — but, just as did Mr. Rollheiser, they took the best they could find, some of which were also the same ones used by Mr. Rollheiser. The difference in the methodology of these two professionals and that of Mr. Rollheiser, was simply that they accepted the subject property for what it really was on V-Day — a large untouched rugged parcel of land with no immediate potential for anything other than to minimize holding costs by whatever useful means, and wait for city development, or other activity to overtake it and find uses for it. I have made little reference to such matters as zoning, permits, access to roads, compatibility with other developments in the area, etc., but it should be stated that the various public bodies — municipal, regional, provincial etc., including planning and development agencies were conscious of the requirement for co-ordination and proper utilization — according to the testimony. In general, it appeared to me that Mr. Rollheiser was rather disdainful of these restraints and rules — believing they could be adopted and adapted as development circumstances dictated in the area. I need express no views on that opinion of his, other than to point out that in an appraisal question such as this one, existing regulations should be considered seriously in this Court, barring clear and decisive evidence (not just opinion) that they are of no value. Such evidence was not forthcoming in this appeal, in my view. Keeping this thought in mind, both Mr. Schmitt and Mr. Stevenson, while not ignoring relevant other sales, also looked at the relative costs per acre of tracts of land somewhat farther away from the city for purposes and uses consistent with those available for the subject lands in 1971 — largely ranching and/or agricultural and even to some degree to hold for future residential acreage developments. It is quite evident from their reports that such land — in large parcels — was readily available for amounts of about $750 per acre. From there they made adjustments and allowances to take into account the location of the subject lands

— adjacent to Calgary, and with some access to the Trans-Canada Highway. They projected requirements and developments as well as officials and purchasers might have been able to do in 1971, and reached their conclusions. For Mr. Schmitt these were for Armor $1,500 per acre (all rural land), and for Zimmer $1,500 per acre for rural land, and $3,500 per acre for the “city” land. For Mr. Stevenson, the result for the Zimmer land was he valued it at $1,000 per acre for rural land, and $3,500 per acre for “city” land. Their valuations are far below the amounts attributed thereto by the respondent in the assessments at issue. In my view they do represent, within limits, the values per acre which a serious, unrestrained, knowledgeable purchaser might have discussed with the owners in 1971. That leaves aside (in the interest of the appellants) the question of whether one could even visualize a prospective purchaser (let alone a "special purchaser" to which counsel for the appellants alluded) for the subject lands in 1971. No evidence was adduced that there were any such prospective purchasers, for amounts per acre even approaching those of Mr. Schmitt and Mr. Stevenson, let alone Mr. Rollheiser.

I would turn for a moment to the testimony of Mr. Carroll, a professional appraiser who gave rebuttal testimony for the appellants. I would commend Mr. Carroll for the enlightenment and assistance he provided — in a competent and concise manner. While he did bring out some aspects in the Schmitt and Stevenson reports which, in his view, warranted somewhat higher valuations, I would respectfully suggest that even taking these fully into account (which I would not be prepared to do) would make only a modest impression on the gap between the respondent's appraisal reports numbers and those used by the respondent in assessing. His testimony while interesting was not relevant to the real problem before the Court.

Since the testimony and evidence brought out on behalf of the appellants has completely failed to support the appraisal numbers proposed by them, and little if any damage has been done to the conclusion of the appraisal reports submitted by the respondent, this Court finds no reason whatsoever for any adjustment to the assessments made by the Minister at issue in these appeals. I make no effort to reconcile (as counsel for the appellants suggested I might) the amount of $3,500 per acre used by the Minister for the Zimmer rural property, and the $5,000 per acre used for the Armor property. They are both much too high in my view, and favour the appellants in a most considerate manner. The fact that one appellant may be favoured more than the other is not a matter for this Court to decide under the circumstances of these appeals.

Finally I would sound a note of caution which arose directly out of the sustained efforts of counsel for the appellants to press on the Court the development potential of the subject properties in 1971. It is difficult indeed to follow the rationale, proposed by the appellants — in effect that by 1971 the purpose and potential for the subject lands had changed from rural agricultural ranch lands (used to produce income ostensibly) to blossoming, ripe for development, saleable lands which they were really just holding until an appropriate offer to purchase (appropriate in their view) came along. That situation lends itself very closely to a consideration of whether the land as an asset in 1971 — in the eyes of the owners — any longer was an income producing asset, or if it was by then an inventory asset, available for sale, indeed with only one purpose — to be sold just as any other inventory item. The Minister, in his wisdom, did not approach the assessments at issue with this perspective in mind, but it must be noted in these reasons for judgment as a formidable question which the appellants did not put to rest in their zeal to promote their convictions regarding the property. In my view, more than any other one factor, it was this view, so strongly held by the appellants, which so materially affected and dictated the methodology of Mr. Rollheiser in his efforts to be of assistance to them. He may even have been persuaded they were right, and that leaves the appellants on even more tenuous grounds on this point. The end result of accepting their perspective on the highest and best use in 1971 for their properties could leave them at risk that the gain would be on income rather than capital account as presently assessed.

In the end analysis, the Minister has acted correctly, in fact munificiently, in striking the assessments at issue, and the appellants' efforts to show otherwise, while protracted and tedious have served no purpose. The assessments must stand.

The appeals are dismissed.

Appeals dismissed.