Sarchuk,
T.CJ.:—The
appeal
of
Nicholas
J.
Fletcher
(Fletcher)
is
with
respect
to
a
notice
of
determination
of
a
capital
loss
made
by
the
respondent
for
Fletcher's
1982
taxation
year.
Pursuant
to
the
provisions
of
subsection
152(1.1)
the
appellant
requested
a
determination
of
his
loss
on
the
disposition
of
a
capital
interest
in
a
trust
resident
in
Canada.
By
notice
of
determination
of
a
loss
dated
June
7,
1984
the
respondent
determined
the
capital
loss
to
be
nil.
The
appellant
filed
a
notice
of
objection.
On
June
5,
1985
the
respondent
confirmed
the
said
determination
as
having
been
made
in
accordance
with
the
provisions
of
the
Income
Tax
Act
and
in
particular
on
the
ground
that
no
allowable
capital
loss
occurred
under
the
provisions
of
subparagraph
115(1)(b)(vi)
with
respect
to
a
disposition
of
a
capital
interest
in
a
trust
resident
in
Canada.
The
issue
arose
out
of
the
following
circumstances.
The
appellant
is
an
engineer.
From
1977
to
1983
he
was
continuously
employed
in
Brazil,
returning
to
Canada
for
one
or
two
weeks
each
year.
On
the
occasion
of
one
visit
in
November,
1980
Fletcher
decided
to
sell
the
house
that
he
owned
and
to
buy
a
new
one.
Realizing
that
he
would
not
be
able
to
complete
the
purchase
before
his
return
to
Brazil
he
approached
an
acquaintance,
Aubrey
Jack
Hyman
(Hyman)
and
asked
him
to
complete
the
transaction
and
to
invest
the
proceeds.
In
order
to
enable
Hyman
to
carry
out
this
responsibility,
the
appellant,
on
November
21,
1980
executed
a
power
of
attorney
in
favour
of
Hyman
(Ex.
A-1).
Fletcher
returned
to
Brazil
at
the
beginning
of
December
1980.
Shortly
thereafter
the
real
estate
transactions
were
com-
pleted
and
in
February
1981
approximately
$95,000
in
cash,
the
surplus
from
the
sale,
was
used
by
Hyman
to
purchase
short-term
notes.
To
this
point
of
time
there
had
been
no
discussions
between
Fletcher
and
Hyman
as
to
the
manner
in
which
Hyman
was
to
exercise
his
authority
under
the
power
of
attorney
nor
had
there
been
any
discussion
as
to
the
manner
or
type
of
investment
that
was
to
be
made
by
Hyman.
Fletcher
told
the
Court
that
when
he
and
Hyman
next
spoke
in
March
1981
Hyman
advised
him
that
the
surplus
funds
had
been
invested
in
short-term
notes.
There
ensued
a
brief
discussion
as
to
the
use
that
the
surplus
funds
could
be
put
to.
Fletcher
considered
and
rejected
a
suggestion
to
pay
down
the
mortgage
on
his
new
house,
concluding
"that
as
long
as
the
money
could
be
applied,
and
earned
more
money
than
I
would
save
by
paying
down
the
mortgage,
then
he
should
apply
the
money
elsewhere.
.
.
.
We
discussed
the
specific
period
of
six
months
for
the
maximum
time
the
money
should
be
committed
for.”
In
the
course
of
these
discussions
the
legal
ownership
of
any
property
acquired
by
Hyman
was
never
specifically
addressed
nor
was
Hyman
given
any
instructions
as
to
reporting
on
the
investments.
Indeed,
due
to
the
nature
of
Fletcher's
work
this
would
have
been
next
to
impossible.
A
Vancouver
City
Savings
Credit
Union
bank
statement
dated
June
30,
1981
(Ex.
A-2)
shows
that
a
deposit
of
$92,606.74
was
made
to
Fletcher's
account
on
May
1,
1981.
Fletcher
understood
the
source
of
these
funds
to
be
the
proceeds
of
disposition
of
the
short-term
notes.
Relying
on
the
May
1,
1981
deposit
and
other
funds
in
Fletcher's
account
Hyman
issued
a
cheque
on
May
5,
1981
drawn
on
that
account
for
$95,000
payable
to
Joseph
Doz,
Hyman's
solicitor
in
Edmonton,
Alberta.
These
funds
were
used
by
Hyman
to
purchase
a
mortgage
from
R.A.
Garon's
Holding
&
Co.
Ltd.
(Garon's),
(Ex.
A-4)
which
mortgage
was
secured
by
property
owned
by
a
company,
Overland
Trading
Co.
Ltd.,
the
principal
owners
of
which
were
Hyman
and
his
brother
Barry.
Hyman
was
a
personal
guarantor
of
this
second
mortgage
and
also
of
the
first
mortgage
on
this
property.
The
mortgage
in
issue
was
initially
assigned
by
Garon's
to
the
Hyman
brothers
and
then
on
July
7,
1981
Barry
Hyman's
interest
therein
was
assigned
to
Aubrey
Jack
Hyman.
Fletcher
subsequently
discovered
that
the
subject
property
was
in
an
area
where
a
tarsands
project
was
to
be
built.
When
the
project
failed
to
go
ahead
property
values
fell
substantially
and
the
second
mortgage
became
worthless.
Fletcher
first
received
this
information
in
June
1982
when
Hyman
telephoned
him
in
Brazil
and
advised
him
that
there
was
a
problem
with
the
investment,
which
he
was
trying
to
sort
out.
Upon
Fletcher's
return
to
Canada
in
July
he
made
further
inquiries
and
only
then
was
able
to
determine
the
full
extent
of
the
problem.
His
investigations
led
him
to
conclude
that
the
mortgage
was
worthless
and
that
Hyman
could
not
indemnify
him
for
his
loss.
On
August
24,1982
the
appellant
and
Hyman
entered
into
an
agreement
(Ex.
A-6)
which
reduced
to
writing
the
arrangement
which
purportedly
existed
between
Hyman
as
trustee
and
Fletcher
as
beneficiary.
In
particular
the
agreement
dealt
with
the
funds
used
to
purchase
the
mortgage
in
the
following
words:
1.
The
Trustee
acknowledges
receipt
of
$95,000.00
from
the
Beneficiary
to
be
invested
by
the
Trustee
in
trust
for
the
Beneficiary.
2.
The
funds
so
settled
in
trust
on
the
Trustee,
and
all
property
substituted
therefore,
are
held
by
the
Trustee
and
his
personal
representatives
solely
for
the
benefit
and
advantage
of
the
Beneficiary
and
his
personal
representatives.
5.
This
agreement
is
effective
as
of
May
1,
1981.
On
that
same
day,
following
the
execution
of
this
trust
agreement,
Fletcher
sold
his
capital
interest
in
the
trust
to
James
Richard
Downie
for
$1,
thereby
crystallizing
his
loss
in
the
sum
of
$95,000.
On
May
24,
1984
Fletcher
commenced
legal
proceedings
against
Hyman
alleging
that
his
loss
was
caused
by
breach
of
trust,
fraud,
embezzlement,
misappropriation
and
defalcation
by
Hyman
of
Fletcher's
funds.
Judgment
was
rendered
in
his
favour
by
the
Supreme
Court
of
British
Columbia
on
July
11,
1986.
Counsel
for
the
appellant
submitted
that
the
trust
agreement
between
Fletcher
and
Hyman
”
.
.
.
validly
constituted
an
express
trust.
It
had
the
three
certainties
required,
that
is
certainty
of
intent
to
create
the
trust;
certainty
of
the
object
of
the
trust;
and
certainty
as
to
the
property
that
is
the
subject
of
the
trust".
Implicit
in
this
contention
was
that
such
an
express
trust
existed
as
at
May
5,
1981
and
the
agreement
(Ex.
A-6)
was
merely
written
confirmation
of
this
trust
arrangement.
In
the
alternative
counsel
contended
that
the
circumstances
in
this
case
gave
rise
to
a
constructive
trust.
He
argued
that
at
all
times
Hyman
was
acting
in
a
fiduciary
capacity
and
that
Hyman
never
regarded
either
the
money
nor
the
mortgage
as
his
property.
The
situation
which
existed
was
that
legal
ownership
of
the
mortgage
was
in
Hyman's
name
while
the
beneficial
ownership
thereof
was
Fletcher's.
To
disregard
the
existence
of
a
constructive
trust
would
result
in
the
unjust
enrichment
of
Hyman,
a
conclusion
which
would
be
contrary
to
the
concept
of
constructive
trust.
In
determining
the
appellant's
capital
loss
to
be
nil
for
the
1982
taxation
year
the
respondent
acted
on
certain
assumptions,
inter
alia:
(a)
the
appellant
was
not
a
resident
of
Canada
in
1982;
(b)
at
all
material
times
Jack
Hyman
acted
under
a
power
of
attorney
granted
by
the
appellant
and
that
Jack
Hyman
was
solely
an
agent
of
the
appellant;
(c)
no
trust
within
the
meaning
of
the
Income
Tax
Act
existed
between
Jack
Hyman
and
the
appellant;
(d)
the
appellant's
actions
in
disposing
of
the
property
constituted
a
disposition
of
an
interest
in
a
mortgage
and
not
a
disposition
of
a
capital
interest
in
a
trust
wthin
the
meaning
of
the
Income
Tax
Act;
(e)
the
value
of
the
appellant's
capital
interest
in
the
mortgage
on
or
before
August
24,
1982
was
no
greater
than
$1.00.
It
is
the
respondent's
position
that
the
appellant's
capital
loss
was
properly
determined
to
be
nil
as
the
appellant,
being
a
non-resident
of
Canada,
did
not
dispose
of
a
capital
interest
in
a
trust
resident
in
Canada.
Secondly,
the
respondent
contends
that
if
Hyman
was
a
constructive
trustee
for
the
appellant
of
the
mortgage
on
the
property
of
Overland
Trading
Co.
Ltd.
that
such
a
constructive
trust
is
not
a
trust
for
the
purposes
of
the
Income
Tax
Act.
Finally,
the
respondent
contended
that
if
there
was
an
express
trust,
it
was
effective
only
from
August
24,
1982
with
a
value
of
no
greater
than
$1
and
that
proceeds
of
disposition
of
$1
resulted
in
no
capital
gain
or
loss
on
the
appellant's
disposition
of
his
interest
in
it.
The
evidence
adduced
failed
to
convince
me
that
an
express
trust
had
come
into
existence
in
December
1980
or
on
May
5,
1981.
In
the
absence,
at
those
times,
of
any
oral
or
written
words,
stating
clearly
and
unequivocally
that
certain
property
was
to
be
held
in
trust
it
would
be
most
difficult
to
find
that
Fletcher
had
created
a
trust.
The
agreement
executed
on
August
24,
1982
(Ex.
A-6)
does
not,
in
my
view,
reflect
the
arrangement
made
by
Hyman
and
Fletcher
in
December
1980
and
is
not
evidence
of
an
express
trust.
I
turn
now
to
the
issue
whether
the
circumstances
in
this
case
establish
the
existence
of
a
constructive
trust.
In
arguing
that
a
constructive
trust
is
not
a
trust
for
the
purposes
of
the
Income
Tax
Act
counsel
for
the
respondent
submitted
that
a
constructive
trust
is
essentially
a
remedy
that
the
Courts
impose
and
contended
that
the
only
manner
in
which
a
constructive
trust
can
be
created
is
by
operation
of
law.
It
did
not
arise
out
of
some
implied
intention
but
must
be
viewed
strictly
as
a
remedy
for
unjust
enrichment.
Counsel
further
argued
that
Hyman
was
the
appellant's
agent
and
that
an
action
for
a
declaration
that
the
agent
was
a
constructive
trustee
of
property
for
a
beneficiary
is
one
of
the
remedies
a
principal
can
seek
from
his
agent.
Relying
on
the
decision
of
the
Supreme
Court
of
Canada
in
Pettkus
v.
Becker,
[1980]
2
S.C.R.
834;
117
D.L.R.
(3d)
257,
counsel
argued:
But,
as
well,
in
this
case,
it
is
submitted
that
following
the
reasoning
of
Pettkus
v.
Becker,
where
a
constructive
trust
was
viewed
as
a
remedy
for
unjust
enrichment,
Mr.
Hyman
got
a
mortgage
paid
off
for
no
corresponding
benefit
that
was
paid
to
Mr.
Fletcher,
he
got
$95,000
and
Mr.
Fletcher
got
nothing.
That's
Mr.
Hyman's
unjust
enrichment.
But,
if
it’s
a
remedy,
it’s
a
remedy
which
must
be
imposed
by
the
Court.
And,
for
example,
to
see
why
this
is
necessary,
we
have
a
situation
where
Mr.
Hyman
has
registered
title
to
the
mortgage,
and
until
the
court
intervenes
and
says,
yes,
Mr.
Hyman,
you
are
a
constructive
trustee
for
Mr.
Fletcher,
what
we
have
is
a
situation
where
Mr.
Hyman
can
deal
with
all
the
world
who
don't
have
knowledge
of
Mr.
Hyman's
misappropriation,
that
he
is
the
owner
and
he
can
transfer
title
without
any
consequences
being
imposed
upon
a
subsequent
purchaser.
He
concluded
this
argument
by
stating:
Now,
it
doesn't
appear
that
the
courts
have
directly
considered
that
question
as
to
when
the
constructive
trust
arises.
Whether
it
arises
at
the
moment
Mr.
Fletcher
is
deprived
of
the
$95,000.00
by
Mr.
Hyman's
actions,
or
when
the
court
intervenes.
In
my
view,
if
it's
a
remedy
when
the
court
orders
it,
there's
been
no
such
order
in
this
case,
therefore
there
is
no
constructive
trust.
I
do
not
accept
the
view
that
a
constructive
trust
does
not
exist
until
the
Court
so
declares
in
the
course
of,
for
example,
an
action
by
the
beneficiary
against
the
trustee.
There
is
nothing
in
Pettkus
v.
Becker
(supra)
which
supports
such
a
conclusion.
In
that
case,
Dickson,
J.
(as
he
then
was),
speaking
for
the
majority
of
the
Court
stated:
In
Murdoch
v.
Murdoch,
Laskin,
J.,
as
he
was
then,
introduced
in
a
matrimonial
property
dispute
the
concept
of
constructive
trust
to
prevent
unjust
enrichment.
It
is
imposed
without
reference
to
intention
to
create
a
trust,
and
its
purpose
is
to
remedy
a
result
otherwise
unjust.
It
is
a
broad
and
flexible
equitable
tool
which
permits
courts
to
gauge
all
the
circumstances
of
the
case,
including
the
respective
contributions
of
the
parties,
and
to
determine
beneficial
entitlement.
It
was
described
this
way
in
Rathwell,
at
p.
455:
"The
constructive
trust,
as
so
envisaged,
comprehends
the
imposition
of
trust
machinery
by
the
court
in
order
to
achieve
a
result
consonant
with
good
conscience.
As
a
matter
of
principle,
the
court
will
not
allow
any
man
unjustly
to
appropriate
to
himself
the
value
earned
by
the
labours
of
another.
That
principle
is
not
defeated
by
the
existence
of
a
matrimonial
relationship
between
the
parties;
but,
for
the
principle
to
succeed,
the
facts
must
display
an
enrichment,
a
corresponding
deprivation,
and
the
absence
of
any
juristic
reason
-
such
as
a
contract
or
disposition
of
law
—
for
the
enrichment.”
[Emphasis
added.]
At
page
848
(D.L.R.
237)
Dickson,
J.
considered
how
one
might
approach
the
question
of
unjust
enrichment
in
matrimonial
causes.
He
said:
In
Rathwell
I
ventured
to
suggest
there
are
three
requirements
to
be
satisfied
before
an
unjust
enrichment
can
be
said
to
exist:
an
enrichment,
a
corresponding
deprivation
and
absence
of
any
juristic
reason
for
the
enrichment.
This
approach,
it
seems
to
me,
is
supported
by
general
principles
of
equity
that
have
been
fashioned
by
the
courts
for
centuries,
though,
admittedly,
not
in
the
context
of
matrimonial
property
controversies.
It
is
clear
that
the
majority
concluded
that
the
facts
in
Pettkus
v.
Becker
disclosed
the
existence
of
a
constructive
trust
arising
out
of
and
dependent
upon
the
applicability
of
the
doctrine
of
"unjust
enrichment”.
In
his
article
"The
Development
of
the
Remedial
Constructive
Trust"*
John
L.
Dewar
cited
the
case
of
Hussey
v.
Palmer,
[1972]
1
W.L.R.
1286
(C.A.)
and
made
particular
reference
to
the
views
of
Denning,
M.R.
on
the
matter
of
the
remedial
constructive
trust:
Although
the
plaintiff
alleged
that
there
was
a
resulting
trust,
I
should
have
though[t]
that
the
trust
in
this
case,
if
there
is
one,
was
more
in
the
nature
of
a
constructive
trust;
but
this
is
more
a
matter
of
words
than
anything
else.
The
two
go
together.
By
whatever
name
it
is
described,
it
is
a
trust
imposed
by
law
whenever
justice
and
good
conscience
require
it.
It
is
a
liberal
process,
founded
upon
large
principles
of
equity,
to
be
applied
in
cases
where
the
legal
owner
cannot
conscientiously
keep
the
property
for
himself
alone,
but
ought
to
allow
another
to
have
the
property
or
the
benefit
of
it
or
a
share
in
it.
The
trust
may
arise
at
the
outset
when
the
property
is
acquired,
or
later
on,
as
the
circumstances
may
require.
It
is
an
equitable
remedy
by
which
the
court
can
enable
an
aggrieved
party
to
obtain
restitution.
[Emphasis
added.]
Dewar
went
on
to
comment:
The
suggestion
by
Lord
Denning
M.R.
that
the
trust
may
arise
at
the
outset,
when
the
property
is
acquired,
or
subsequent
to
the
acquisition
of
the
property,
as
the
circumstances
may
require,
echoes
the
view
which
had
been
earlier
put
forward
by
Scott
L.J.
in
Bannister
v.
Bannister,
[1948]
2
All
E.R.
133
(C.A.)
although
Bannister
was
not
directly
mentioned.
Although
the
foregoing
view
has
not
been
universally
adopted,
I
am
of
the
opinion
that
it
reflects
the
correct
approach
and
is
not
inconsistent
with
Pettkus
v.
Becker
(supra).
In
considering
the
distinction
to
be
drawn
between
a
resulting
trust
and
a
constructive
trust,
Martland,
J.
in
his
dissenting
opinion
in
Pettkus
v.
Becker
(supra)
made
the
following
comments
at
page
858
(D.L.R.
261):
I
turn
now
to
the
nature
of
a
constructive
trust
as
so
far
recognized.
The
areas
in
which
a
constructive
trust
has
been
found
to
exist
have
usually
been
in
cases
where
a
fiduciary
relationship
exists,
e.g.,
a
trustee
or
fiduciary
taking
advantage
of
his
position
to
make
a
profit
for
himself.
Such
a
trust
has
also
been
found
to
exist
where
a
person
having
knowledge
of
an
existing
trust
acquires
the
legal
title
to
the
trust
property.
[Emphasis
added.]
I
have
already
noted
that
the
appellant,
Fletcher,
successfully
sued
Hyman
in
relation
to
this
transaction.
The
suit
was
heard
in
the
Supreme
Court
of
British
Columbia
and
on
July
11,
1986
The
Honourable
Judge
Skipp,
local
judge
of
the
Supreme
Court,
rendered
judgment
in
favour
of
the
appellant.
In
the
course
of
his
judgment
he
found
that
Hyman
was
acting
as
a
trustee
and
he
was
under
a
duty
in
that
capacity
to
invest
the
appellant’s
money
properly.
He
went
on
to
say:
I
characterize
the
action
of
Mr.
Hyman
in
investing
the
money
of
Mr.
Fletcher
in
a
second
mortgage
to
be
a
misappropriation
while
acting
in
fiduciary
capacity
and,
indeed,
I
lack,
I
suppose,
the
necessary
descriptive
powers
to
indicate
the
strength
of
my
conclusion
in
that
regard.
I
will
content
myself
with
the
bare
finding
of
the
fact
that
this
is
a
misappropriation
while
acting
in
a
fiduciary
Capacity.
While
the
learned
trial
judge
did
not
specifically
state
that
a
constructive
trust
had
been
created
that
conclusion
is
implicit
in
his
reasoning.
Although
I
am
not
bound
by
the
judgment
it
is
relevant
to
the
issues
before
me
and
is
entitled
to
careful
consideration.
The
evidence
before
this
Court
leaves
no
doubt
that
there
was
a
fiduciary
relationship
between
the
appellant
and
Hyman,
which
relationship
gave
rise
to
the
placing
of
trust
and
confidence
by
Fletcher
in
the
fiduciary.
This
relationship
existed
at
the
time
that
the
“misappropriation”
by
Hyman
took
place.
Furthermore
that
“misappropriation”
occurred
while
Hyman
was
acting
within
the
general
scope
of
his
fiduciary
duty.
It
is
my
understanding
of
the
various
decisions
including
Pettkus
v.
Becker
that
equity
imposes
express
trust
obligations
upon
the
fiduciary
who
abuses
that
trust
and
confidence.
Applying
these
principles
to
the
evidence
in
the
present
appeal
the
existence
of
a
constructive
trust
is
obvious
and
the
fiduciary,
Hyman,
in
these
circumstances
was
a
constructive
trustee.
The
respondent
took
the
further
position
that
even
if
I
found
that
a
constructive
trust
existed,
its
remedial
nature
put
it
in
a
category
different
than
that
contemplated
by
the
relevant
provisions
of
the
Income
Tax
Act.
Counsel
contended
that
the
nature
of
a
constructive
trust
makes
it
inconsistent
with
the
trust
provisions
of
the
Income
Tax
Act.
He
argued
that
before
the
provisions
of
subsection
115(1)
were
operative
it
was
necessary
that
there
be
"an
express
trust
or
a
substantive
trust
or
trust
by
intention”.
No
authority
was
cited
in
support
of
this
argument.
I
do
not
accept
this
proposition.
For
the
purposes
of
this
appeal
the
relevant
subparagraph
is
115(1)(b)(vi).
It
reads:
115.
(1)
For
the
purposes
of
this
Act,
a
non-resident
person's
taxable
income
earned
in
Canada
for
a
taxation
year
is
the
amount
of
his
income
for
the
year
that
would
be
determined
under
section
3
if
(b)
the
only
taxable
capital
gains
and
allowable
capital
losses
referred
to
in
paragraph
3(b)
were
taxable
capital
gains
and
allowable
capital
losses
from
dispositions
of
property
each
of
which
was
a
disposition
of
property
or
an
interest
therein
(in
this
Act
referred
to
as
a
“taxable
Canadian
property")
that
was
(vi)
a
capital
interest
in
a
trust
(other
than
a
unit
trust)
resident
in
Canada,
This
subparagraph
falls
within
Division
D
and
as
far
as
I
can
discern
the
legislators
did
not
choose
to
qualify
the
word
"trust"
or
to
limit
its
meaning
in
any
way
other
than
by
exluding
unit
trusts.
If
the
legislators
had
intended
to
exclude
constructive
trusts
and
resulting
trusts
from
the
operation
of
subparagraph
115(1)(b)(vi)
they
would
have
done
so
in
clear
and
unambiguous
language.
The
word
"trust"
is
defined
in
the
Income
Tax
Act
as
follows:
248.
(1)
"Trust"—"trust"
has
the
meaning
assigned
by
subsection
104(1);
104.
(1)
In
this
Act,
a
reference
to
a
trust
or
estate
(in
this
subdivision
referred
to
as
a
"trust")
shall
be
read
as
a
reference
to
the
trustee
or
the
executor,
administra-
tor,
heir
or
other
legal
representative
having
ownership
or
control
of
the
trust
property.
Subsection
104(1)
falls
within
Division
B
of
the
Income
Tax
Act.
It
is
noteworthy
that
in
this
Division
by
paragraph
108(1)(j)
the
legislators
defined
a
trust
to
include
an
inter
vivos
trust
and
a
testamentary
trust
but
specifically
excluded
from
the
meaning
of
trust
items
such
as
a
unit
trust
and
a
trust
governed
by
a
registered
pension
fund
or
plan.
The
careful
manner
in
which
the
word
"trust"
has
been
used
in
Divisions
B
and
D
of
the
Income
Tax
Act
and
the
fact
that
the
legislators
chose
not
to
define
the
term
"trust"
for
the
purposes
of
Division
D,
or
to
exclude
a
constructive
trust
or
a
resulting
trust,
can
only
be
taken
to
mean
that
for
the
purposes
of
subparagraph
115(1)(b)(vi)
the
term
"trust"
encompasses
all
forms
of
trusts.
The
appeal
is
allowed
with
costs.
The
appellant
did
dispose
of
a
capital
interest
in
a
trust
resident
in
Canada,
thereby
sustaining
a
capital
loss
as
claimed.
The
matter
is
therefore
referred
back
to
the
respondent
for
redetermination
in
accordance
with
these
reasons.
Appeal
allowed.