Bonner,
M
J:—The
appellant
operated
a
motel
business
on
land
in
Jasper
Park.
The
land
belonged
to
the
Crown
in
right
of
Canada.
On
December
31,
1971,
the
land
was
occupied
by
the
appellant
under
a
licence
granted
by
the
Crown.
The
licence
expired
on
June
30,
1972.
Desite
the
expiry
of
the
licence
the
appellant
continued
after
June
30,
1972,
to
occupy
the
land
for
the
purpose
of
carrying
on
its
business.
Negotiations
for
renewal
were
commenced
before
the
expiry
and
carried
on
after
it.
Following
the
expiry
the
appellant
paid
the
Crown
amounts
equal
to
the
fees
which
would
have
been
paid
had
the
licence
remained
in
effect.
On
September
13,
1973,
the
appellant
agreed
to
sell
its
motel
property
and
business
in
accordance
with
the
terms
of
a
written
agreement.
That
agreement
provided:
The
Purchaser
may
...
cancel
this
agreement
...
if
...
the
Purchaser
shall
be
unable
to
obtain
a
satisfactory
lease
from
the
Crown
for
a
term
of
forty
two
(42)
continuous
years
of
twelve
(12)
month
annual
occupancy
.
.
.
A
lease
of
the
property
for
a
term
of
forty-two
years
was
granted
by
the
Crown
to
the
appellant.
The
lease
was
dated
April
1,
1974.
It
was
expressed
to
be
for
a
term
commencing
July
1,
1972.
The
lease
was
assigned
by
the
appellant
to
the
purchaser
on
the
day
on
which
it
was
granted,
namely,
April
1,
1974.
In
the
assignment
the
parties
agreed
to
an
apportionment
of
the
total
consideration.
The
sum
of
$285,000
was
said
to
be
“..
.
for
the
licence
of
occupation
granted
by
the
Government
of
Canada.”
It
was
the
appellant’s
position
that
the
amount
which
was
required
by
section
14
of
the
Income
Tax
Act
to
be
included
in
income
as
the
result
of
the
sale
was
to
be
calculated
in
accordance
with
the
provisions
of
section
21
of
the
Income
Tax
Application
Rules.
Its
right
in
respect
of
the
land
occupied
for
purposes
of
the
motel
business
was,
it
was
said,
a
“government
right”
within
the
meaning
of
section
21
of
the
Rules.
The
lease
granted
to
the
appellant
and
assigned
by
it
to
the
purchaser
on
April
1,
1974,
does
not,
in
my
view,
fall
within
the
definition
of
“government
right”
laid
down
by
paragraph
21
(3)(a)
of
the
Rules.
That
provision
reads:
21(3)
In
this
section,
(a)
a
“government
right”
of
a
taxpayer
means
a
right
or
licence
(i)
that
enables
the
taxpayer
to
carry
on
a
business
activity
in
accordance
with
a
law
of
Canada
or
of
a
province
or
Canadian
municipality,
to
an
extent
to
which
he
would
otherwise
be
unable
to
carry
it
on
in
accordance
therewith,
(ii)
that
was
granted
or
issued
by
Her
Majesty
in
right
of
Canada
or
a
province
or
a
Canadian
municipality,
or
by
a
department,
board,
agency
or
any
other
body
authorized
by
or
pursuant
to
a
law
of
Canada,
a
province
or
a
Canadian
municipality
to
grant
or
issue
such
a
right
or
licence,
and
(iii)
that
was
acquired
by
the
taxpayer
(A)
as
a
result
of
a
transaction
occurring
before
1972,
or
(B)
at
a
particular
time
for
the
purpose
of
effecting
the
continuation,
without
interruption,
of
rights
that
are
substantially
similar
to
the
rights
that
the
taxpayer
had
under
a
government
right
held
by
him
before
the
particular
time;
The
lease
was
not
acquired
as
the
result
of
a
transaction
occurring
before
1972.
Thus,
the
question
arises
whether
it
was
acquired
by
the
appellant
in
April
of
1974
for
the
purpose
of
.
effecting
the
continuation,
without
interruption,
of
rights
..
.”
It
is
not
necessary
to
consider
the
question
whether
the
rights
which
flowed
to
the
appellant
under
the
lease
were
“substantially
similar
to
the
rights”
that
the
appellant
had
under
the
old
licence.
It
is
sufficient
to
observe
that,
having
regard
to
the
fact
that
the
appellant
had
already
entered
into
the
agreement
to
sell
the
business
and
to
the
fact
that
it
did
proceed
on
the
day
the
lease
was
delivered
to
assign
its
right
thereunder,
it
can
hardly
be
said
that
the
acquisition
by
the
appellant
was
for
the
purpose
of
effecting
a
continuation
of
its
rights.
A
person
who
acquires
rights
for
the
purpose
of
selling
them
to
another
cannot
be
said
to
acquire
them
for
the
purpose
of
effecting
their
continuation.
For
the
foregoing
reasons
this
appeal
from
an
assessment
of
income
tax
for
the
1975
taxation
year
is
dismissed.
Appeal
dismissed.
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