Nan M Goodwin v. Minister of National Revenue, [1982] CTC 2675, 82 DTC 1679

D E Taylor:—This is an appeal from Nan M Goodwin with respect to her 1976 tax return. The single matter at issue brought before the Board is the fair market value on December 31, 1971, of 10.65 acres of land that was sold by the appellant in the year 1976.

To recap briefly, the property in question (10.65 acres) was the one-half interest of the appellant. I am reading from the Notice of Appeal of the taxpayer dated September 29, 1980:

This property was situated adjacent to, and in fact had a common boundary with lands in the Champlain Shopping Centre Ltd in Dieppe, NB, just west of the City of Moncton. The purchaser, Tritor Developments Ltd, paid $10,000 per acre and accordingly I received $106,500 for my half interest. I reported this sale in 1976 and used as my ACB a value of $6,000 per acre.

(I emphasize the next sentence.) In arriving at the ACB I used comparable sales in the immediate area which took place in 1971 at $6,000 per acre.

Also, the appeal goes on to indicate that in one assessment the Minister had ascribed the value of approximately $2,000 per acre to the property, thereby reducing the original amount of $6,000 per acre as ascribed by the taxpayer and in a subsequent reassessment, the Minister further reduced it to some $600 per acre. The Notice of Appeal concludes: “I consider the $6,000 per acre ACB used in filing my return to be reasonable”.

Obviously one notes with interest the wide discrepancy between the Minister’s valuation, at least for the assessment purposes, of $600 per acre and the $6,000 per acre originally ascribed to the property by the appellant and maintained throughout the proceedings, including today. However, as the Board noted for counsel, I have not been asked to act as “arbitrator” in the dispute, and arrive in some manner at a “fairer” valuation. The Board’s primary role, as I see it, in a valuation case, is to decide whether the evidence presented by the appellant supports a different valuation than that used by the Minister in assessing. The mechanism chosen by the appellant in this appeal, and in most such appeals, is to present evidence in support of a different valuation — in this case $6,000 per acre. Unless there is good prima facie evidence to support that alternative valuation, I am not of the Opinion that the Board is required to consider at all whether the valuation used by the Minister is correct or incorrect.

Counsel for the appellant asserted the unique situation of the property — located in such a place it appeared relative to main highways and potential growth, and indications of a substantial shopping plaza development on or near the site. The appellant, Mrs Nan M Goodwin, owned substantial acreages of property in the vicinity of the subject property.

At the end of the evidence presented by the appellant, counsel for the Minister considered the situation and took the course of moving for dismissal of the appeal on the basis the onus of proof had not been discharged by the appellant. Counsel for the respondent took that course and decided not to introduce evidence on behalf of the respondent. The Board heard arguments therefore from both counsel with respect to the merits of the case, based on solely the evidence presented by the appellant.

Counsel for the Minister noted the difficulty which faced the Board in view of the fact that there had been no appraisal evidence presented in support of the $6,000 figure contended by the appellant. The main evidence and, in fact, the only evidence which could be considered to have any relevance to that $6,000 figure was that a sale of adjacent property had taken place in 1971 from Goodwin the appellant at an amount of $6,000 per acre. Counsel for the respondent noted that this was in connection with the development of and furtherance of the shopping plaza plans which were at that point in time in progress. Counsel also noted that this could not be considered in any way as comparable value for the subject property in light of the fact that the purchaser (who had been a witness for the appellant at the hearing) required the property he did purchase in 1971 from Goodwin, for the extension of the shopping plaza. It was essential to the prospect for any development of that plaza. On that point, counsel for the appellant noted for the Board that the same witness pointed out that he would have acquired, he would have purchased additional property had the appellant been a willing vendor at that point in time (in 1971).

Without reviewing in detail any more of the evidence and testimony presented, the Board would note four points. One, in 1971, with regard to the Subject property, there would appear to have been real questions regarding legal titles and ownership. Two, in the same year, there would appear to have been real questions with regard to the prospects and the future of even the development of the shopping plaza then in progress. The testimony leads to the conclusion that without the 1971 acquisition, there would have been no shopping plaza, and a considerable investment already made would have been in jeopardy. Three, there would also appear to have been real questions with regard to access roads and major highways in the vicinity. Four, a real question existed about the possible utilization of the subject property for any comercial or industrial purpose, due to topographical and potential flooding conditions. None of these questions were explored in de- tail at the hearing; they appear to the Board to have been considerations that any willing buyer and willing seller might have taken into account in 1971. Again it is noted that the only support that has been presented on behalf of the appellant for the $6,000 figure contended in this appeal is the sale of adjacent property previously noted, made in 1971. While it might have some possible relevance to the valuation of the subject property, it does not and cannot establish the value for that subject property on its own, even though it is adjacent to the subject property and owned by the same owner. That is the only evidence upon which the Board is asked to reach a conclusion.

The conclusion of counsel for the respondent is that the acquisitions of various parcels of property adjacent to the subject property continued over a period of years. Such acquisitions were in stages as it was possible and practical to do so in the light of the potential of the shopping plaza being constructed, and as the future appeared more certain with regard to access roads and various other contiguous developments. That would appear to the Board to be a fairly logical conclusion. However, the Board is only called upon to determine if the evidence presented does lead to a conclusion that the subject property should be valued at $6,000 per acre in 1971. That is not a conclusion which can be reached. The Board, however, in giving this decision is not deciding that the value of the property was only $600 per acre. The Board is not required to hold any opinion on that point in light of the conduct and progress of the hearing.

The appeal is dismissed.

Appeal dismissed.