Roland
St-Onge
[TRANSLATION]:—The
appeal
of
Mr
Guy
Hebert
came
before
me
on
October
29,1982
in
the
city
of
Montreal,
province
of
Quebec.
It
involves
real
estate
transactions
the
gains
from
which
were
reported
as
capital
gains
for
the
1976,
1977
and
1978
taxation
years.
The
facts
of
this
appeal
are
set
out
in
paragraph
6
of
the
reply
to
the
notice
of
appeal,
which
reads
as
follows:
6.
In
assessing
Appellant
for
the
1976,
1977
and
1978
taxation
years,
Respondent
relied
on
the
following
presumptions
of
fact,
inter
alia:
(a)
Since
1971,
Appellant’s
principal
occupation
has
been
the
construction,
sale
and
management
of
his
residential
rental
buildings;
(b)
During
the
taxation
years
in
question,
Appellant
disposed
of
seven
of
his
residential
rental
buildings
in
Longueuil
and
St-Hubert,
in
particular:
|
Date
of
|
Year
of
|
|
Address
|
Construction
|
Sale
Sale
|
|
LONGUEUIL
|
|
|
1920
rue
Lavallée
|
1-5-1971
|
1976
|
|
1180-84
rue
Lavallée
|
1-1-1972
|
1976
|
|
ST-HUBERT
|
|
|
515
rue
Lamarre
|
1-5-1974
|
1977
|
|
525
rue
Lamarre
|
1-9-1974
|
1977
|
|
535
rue
Lamarre
|
1-12-1974
|
1978
|
|
555
rue
Lamarre
|
in
1975
|
1978
|
|
575
rue
Lamarre
|
in
1975
|
—
|
|
2214
rue
Séguin
|
in
1976
|
—
|
|
2234
rue
Séguin
|
in
1976
|
—
|
|
2284
rue
Séguin
|
in
1976
|
—
|
|
1385
rue
Nobert
|
in
1976
|
—
|
|
1420
rue
Beauregard
|
in
1977
|
—
|
|
10,120
boul
Racine
|
in
1977
|
—
|
(c)
Appellant
sold
the
said
properties
during
the
period
in
question
in
order
to
finance
the
construction
of
apartment
buildings
on
new
properties
purchased
during
his
1976,
1977
and
1978
taxation
years;
(d)
The
said
properties
were
purchased
and
sold
by
Appellant
with
the
benefit
of
his
knowledge
as
a
professional
carpenter
and
building-permit
holder
who
knew
a
great
deal
about
the
construction
business;
(e)
At
the
time
he
purchased
the
said
properties
Appellant
expected
to
resell
them
at
a
profit,
and
this
was
one
of
the
chief
factors
that
induced
him
to
buy
them;
(f)
When
he
purchased
the
said
properties
Appellant’s
secondary
if
not
principal
intention
was
to
make
a
profit
on
the
sale
of
the
residential
rental
buildilngs,
as
he
in
fact
did
during
the
taxation
years
in
question.
Respondent
has
proved
the
allegations
in
his
paragraph
6.
In
addition
to
the
seven
properties
under
appeal,
appellant
sold
two
other
income
properties
before
the
1971
taxation
year
in
order
to
finance
one
nine-
and
one
13-apartment
building
and
one
triplex
in
1973.
As
we
can
see,
the
evidence
reveals
that
appellant,
a
carpenter
by
trade,
built
residential
rental
buildings
in
order
to
keep
some
of
them
but
also
to
sell
a
number
of
them
and
thus,
raise
the
necessary
money
to
increase
the
number
of
such
properties
he
owned.
Such
conduct
clearly
shows
an
intention
to
speculate
in
order
to
increase
his
holdings,
which
means
that
appellant’s
business
was
in
the
nature
of
trade
within
the
meaning
of
section
3
and
subsections
9(1)
and
248(1)
of
the
Income
Tax
Act,
SC
1970-71-72,
c
63,
as
amended.
Appellant
must
have
known
from
the
outset
of,
this
undertaking
that
he
would
have
to
sell
some
properties
to
achieve
his
ends.
He
therefore
always
intended
to
sell
properties
when
the
need
arose,
and
for
these
reasons
the
appeal
is
dismissed.
Appeal
dismissed.
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