The
Chairman
[TRANSLATION]:-This
is
an
appeal
by
Mr
Armand
Montpetit
from
an
income
tax
assessment
for
the
1974
taxation
year,
by
which
the
respondent
added
to
the
appellant’s
income
for
the
year
in
question
the
sum
of
$90,461.45,
as
being
the
appellant’s
share
of
profits
from
the
sale
of
the
“Montfortain
property”,
which
the
respondent
regarded
as
income
from
a
business,
adventure
or
concern
in
the
nature
of
trade.
Summary
of
the
facts
As
appears
in
the
notice
of
appeal,
and
the
testimony
at
the
hearing
confirmed,
a
group
of
persons
including
the
appellant,
a
former
contractor
and
municipal
councillor
of
the
city
of
Vanier,
and
lawyers,
architects
and
former
contractors
joined
together
to
acquire
a
purchase
option
on
the
Montfortain
property
located
in
the
city
of
Vanier.
It
was
alleged
by
the
appellant
that
the
group’s
objective
was
the
construction
of
a
senior
citizens’
home,
a
nursing
home,
a
day
care
centre
and
a
low-cost
housing
project.
Plans
were
prepared
for
the
purpose
(Exhibits
A-1,
A-2
and
A-3),
and
the
newspapers
informed
the
public
of
this
development
project.
The
Vanier
municipal
authorities
and
the
government
of
the
province
of
Ontario
appeared
to
be
in
favour
of
such
a
project.
A
purchase
option
on
the
Montfortain
property
was
signed
for
$270,000
on
December
2,
1972,
by
J
P
Morin
(Ouest)
Limitée
(In
Trust)
on
behalf
of
six
persons,
including
the
appellant.
It
was
alleged
that
Mr
Brunet,
who
had
agreed
to
be
the
contractor
on
the
project,
suffered
a
heart
attack
and
was
no
longer
in
a
position
to
assume
responsibility
for
the
construction.
In
spite
of
the
fact
that
the
group
which
had
signed
the
purchase
option
included
architects
and
lawyers,
and
that
Mr
Brunet
was
not
the
only
experienced
contractor,
the
appellant’s
partners
decided,
over
the
objections
which
the
appellant
alleged
he
made,
to
accept
an
offer
for
sale,
and
in
fact
sold
the
property
on
the
same
day
the
group
exercised
its
purchase
option.
Analysis
of
the
facts
In
substance,
this
case
is
identical
to
that
in
the
appeal
of
Mr
Ronald
Dagenais
(77-974),
which
was
heard
on
June
13,
1978
at
Ottawa.
Mr
Dagenais
was,
with
the
appellant,
one
of
the
partners
in
the
same
“Montfortain”
transaction,
which
is
at
issue
here,
and
my
learned
colleague
Mr
Roland
St-Onge
dismissed
Mr
Dagenasis’
appeal.
The
facts
and
circumstances
of
the
case
now
before
the
Board
are
the
same
as
those
presented
in
Dagenais.
It
is
true
that
the
appellant
stated
that
he
did
not
want
to
sell
the
Montfortain
property,
but
as
he
was
only
one
against
three,
he
had
to
give
way.
On
the
other
hand,
although
there
was
undoubtedly
a
project
contemplated,
the
group’s
intention
is
signing
the
purchase
option,
all
its
members
being
fully
aware
of
the
property’s
value,
was
not
exclusively
to
carry
that
project
to
completion.
The
other
members
of
the
group
at
least
had
a
secondary
intention
of
selling
the
property
if
the
occasion
arose.
This
was
established
by
the
testimony
of
Mr
Brunet,
who
was
apparently
the
prime
mover
in
the
project,
since
his
illness
was
alleged
as
the
reason
causing
the
group
not
to
proceed
with
the
proposed
development.
Mr
Brunet
admitted
that
there
was
a
project
proposed
for
the
municipality
of
Vanier,
senior
citizens’
homes
and
so
on,
and
further
stated
that
the
group
was
ready
to
sell
the
property
before
the
project
had
been
completed
on
“certain
conditions”.
In
fact,
these
conditions
were
offered
even
before
the
purchase
offer
was
executed
by
the
group,
and
the
sale
took
place
at
the
same
time
as
the
group
exercised
its
purchase
offer.
It
is
difficult
to
understand,
if
the
completion
of
the
Montfortain
project
really
was
the
group’s
sole
intent,
how
such
a
large
project
could
have
been
abandoned
when
there
were
still
five
months
before
the
expiry
date
of
their
purchase
option.
In
light
of
the
facts,
I
have
to
conclude
that
when
the
purchase
option
was
signed
the
group
at
least
had
a
secondary
intention
of
reselling
the
property
at
a
profit.
This
is
exactly
what
it
did.
I
see
no
bar
or
impediment
which
made
completion
of
the
Montfortain
project
impossible.
The
appellant,
who
from
the
notice
of
appeal
played
a
Significant
part
in
bringing
together
the
partners,
the
contractors,
architects
and
lawyers
who
were
members
of
the
group,
and
who
approached
Mr
Brunet,
who
was
to
be
the
contractor
for
the
project,
should
have
known
that
in
signing
the
option
his
partners
might
have
had
other
intentions
than
proceeding
with
the
project.
In
the
case
at
bar
the
appellant
must
bear
the
burden
of
proof
and
establish
to
the
Board’s
satisfaction
not
only
that
his
sole
intent
in
purchasing
the
Montfortain
property
was
completion
of
the
project,
but
that
he
did
not
know
that
his
partners,
who
were
all
well
versed
in
real
estate
matters,
intended
on
certain
conditions
to
sell
the
property
rather
than
to
continue
with
the
project.
The
appellant
did
not
succeed
in
persuading
the
Board
that
he
did
not
himself
have,
or
that
he
did
not
know
when
the
option
was
signed
and
executed,
that
a
majority
of
his
partners
were
willing
to
sell
the
property
on
favourable
terms,
and
in
my
opinion
this
constitutes
an
adventure
in
the
nature
of
trade
for
the
appellant.
I
concur
with
the
decision
rendered
by
my
colleague
Mr
St-Onge
in
Dagenais;
I
find
that
the
share
of
the
profits
realized
by
the
appellant
from
the
sale
of
the
Montfortain
property
consitituted
income
from
a
business,
adventure
or
concern
in
the
nature
of
trade
for
the
appellant,
and
the
respondent
correctly
added
the
sum
of
$90,461.45
to
the
appellant’s
income
for
the
1974
taxation
year
in
accordance
with
sections
3,
9
and
subsection
248(1)
of
the
Income
Tax
Act.
The
appeal
is
therefore
dismissed.
Appeal
dismissed.
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