D
E
Taylor:—This
is
an
appeal
heard
in
the
City
of
Toronto,
Ontario,
on
June
27,1980,
against
income
tax
assessments
for
the
years
1974
and
1975,
in
which
the
Minister
of
National
Revenue
taxed
the
gain
realized
on
the
sale
of
a
certain
parcel
of
real
estate
as
on
income
rather
than
on
capital
account.
The
appellant
held
a
25%
interest
in
a
partnership
registered
as
Grantaun
Investments
(“Grantaun”)
on
October
1,
1972.
By
offer
of
purchase
dated
October
13,1972,
Grantaun
agreed
to
purchase
a
parcel
of
land
known
as
Part
of
Lot
2,
Concession
3,
in
the
Township
of
East
Whitby,
being
approximately
29
acres
with
a
bungalow
located
thereon
(hereinafter
referred
to
as
the
“Property”).
Grantaun
closed
the
transaction
on
December
15,1972,
purchasing
the
property
for
a
total
consideration
in
the
amount
of
$180,068.95,
with
the
appellant
making
a
cash
contribution
according
to
her
25%
interest
in
Grantaun.
On
December
27,
1973,
Grantaun
sold
the
property
for
proceeds
in
the
amount
of
$610,124.22,
and
realized
a
net
profit
in
the
amount
of
$390,926.22.
In
assessing
the
appellant,
the
respondent
relied,
inter
alia,
upon
sections
3,
4,
subsection
9(1),
paragraph
20(1)(n)
and
subsection
248(1)
of
the
Income
Tax
Act,
SC
1970-71-72,
c
63,
as
amended.
Contentions
For
the
appellant:
—The
Grantaun
venture
was
a
parcel
of
property
at
the
intersection
of
two
relatively
important
streets
in
the
northeast
quarter
of
Oshawa.
The
taxpayer
was
approached
by
some
other
individuals
with
respect
to
acquiring
this
piece
of
property
as
an
extremely
long
term
investment.
In
fact,
it
was
because
it
was
such
a
long
term
investment
that
it
was
desired
to
split
the
ownership
amongst
several
people
in
order
that
the
carrying
costs
could
be
shared
around.
At
this
time,
the
future
was
of
course
unknown
in
the
sense
that
no
one
could
tell
exactly
what
would
be
the
best
use
to
which
the
property
could
be
put.
Once
the
property
had
been
acquired
by
the
venture,
it
was
ascertained
that
it
would
be
extremely
difficult
to
sever
off
any
properties
and
once
again,
it
was
decided
to
retain
the
property
as
a
long
term
investment,
despite
the
lack
of
severance.
In
this
interval
of
time
however,
the
people
found
themselves
harassed
by
prospective
purchasers
since
the
market
for
land
in
the
area
was
extremely
volatile.
The
people
made
no
listing
of
the
property
with
any
real
estate
agent,
did
not
solicit
any
offers
and
in
fact,
only
accepted
an
offer
when
they
had
been
bothered
to
such
an
extent,
that
it
had
become
a
nuisance
and
when
the
potential
purchaser
had
offered
such
a
good
deal,
that
it
was
a
brilliant
opportunity
which
really
could
not
be
turned
down.
Accordingly,
under
duress
and
contrary
to
what
their
long
term
interests
were,
the
group
did
proceed
to
dispose
of
the
lands.
—The
income
was
earned
out
of
an
investment
in
real
estate,
and
was
disclosed
as
a
capital
gain.
For
the
respondent:
—
During
its
period
of
ownership,
Grantaun
made
no
additions
to
the
property,
nor
did
it
apply
to
have
the
property
rezoned
commercial
or
industrial.
—
During
its
period
of
ownership,
Grantaun
received
gross
rental
income
in
the
amount
of
$377
in
respect
of
the
property.
—The
appellant
acquired
the
property
with
a
view
to
dealing
it,
trading
in
or
otherwise
turning
the
same
to
account
for
a
profit.
—The
appellant’s
share
of
the
profit
realized
on
the
sale
of
the
property
was
income
from
a
business
or
adventure
in
the
nature
of
trade.
Evidence
The
only
witness
was
the
appellant
herself.
She
testified
that
the
initial
amount
required
for
her
25%
of
the
down
payment
was
quite
modest
and
was
from
her
own
funds.
Her
share
of
the
annual
carrying
costs
(mortgage,
interest,
taxes,
etc)
also
would
have
been
nominal,
and
she
felt
she
could
have
maintained
these.
There
were
no
specific
plans
for
development,
nor
was
there
a
time
frame
within
which
such
plans
should
be
finalized.
The
requirement
for
construction
funds—for
a
hotel,
motel,
shopping
plaza,
homes
or
business
block,
etc—would
be
dealt
with
as
and
when
the
future
use
of
the
property
became
more
clear.
The
appellant
regarded
the
acquisition
as
a
method
of
setting
up
her
own
estate.
She
was
not
aware
that
some
of
the
other
participants
in
the
venture
had
previously
engaged
in
real
estate
trading
transactions,
although
she
was
aware
that
one
of
the
major
active
organizers
of
the
venture
was
directly
involved
in
real
estate
work,
and
knowledgeable
about
development
plans
in
the
area.
Some
of
the
participants
she
knew
personally,
some
she
did
not
know.
The
appellant
had
separate
legal
advice,
and
simply
agreed
to
participate
in
a
land
purchase
venture
because
land
itself
was
a
good
long-term
investment.
Argument
In
view
of
the
nature
of
this
matter,
the
Board
takes
the
liberty
of
quoting
rather
heavily
from
the
arguments
proposed
at
the
hearing:
For
the
appellant
.
.
.
my
submission
is
that
there
has
been
uncontradicted
evidence
that
has
been
tendered
in
this
hearing
to
support
all
of
the
assertions
that
have
been
made
in
my
preamble
to
the
case.
There
is
a
significance
in
having
uncontradicted
and
unchallenged
evidence
submitted
as
the
cases
have
shown
and
that
significance
is
that,
on
its
face,
it
has
been
held
to
be
able
to
rebut
the
presumptions
and
the
first
factor
is
that
there
has
been
that.
Secondly,
dealing
with
the
individual
taxpayer,
these
are
the
important
things
to
note.
This
was
the
first
transaction
of
a
land
nature
in
which
this
taxpayer
had
become
involved.
There
is
no
evidence
other
than
her
own
concerning
that,
but
you
have
to
accept
that
based
on
her
evidence.
The
funds
that
were
used
through
this
transaction
were
her
own
funds,
at
least
the
initial
capital
investment.
The
carrying
costs
of
the
investment
were
manageable
and
from
two
points
of
view
they
were
manageable.
From
the
point
of
view
of
the
possibility
of
a
land
severance
to
generate
a
pool
of
capital
out
of
which
to
carry
it,
but
beyond
that,
if
that
failed,
a
mere
calculation
based
on
the
documentation
filed
would
indicate
that
Mrs
Swartz
would
have
been
liable
to
carry
this
property
for
a
sum
of
less
than
$1,500
a
year
and
that
is
a
calculation
of
all
of
the
mortgage
payments,
subtracting
the
rental
income
that
was
generated
from
the
farm
and
the
house,
a
sum
which
is
somewhat
manageable.
The
taxpayer’s
evidence
is
that
she
was
looking
for
what
we
can
refer
to
as
a
long-term
investment
and
a
safe
haven
for
that
investment,
with
a
return
on
the
investment
at
a
point
in
time
down
the
road
when
the
children
were
older
and
the
motivation
for
that
is
understandable
in
my
submission.
She
has
no
history
of
being
a
speculator,
either
in
the
past
and
of
course
the
future,
beyond
that,
is
not
relevant.
Hindsight
is
not
a
factor
that
can
be
taken
into
account,
but
her
motive,
as
having
a
land
deal
for
development,
is
corroborated
by
her
subsequent
activity,
which
was
to
become
involved
in
another
investment
in
Burkton,
which
is
an
ongoing
development
project.
Some
reference
has
been
made
to
the
trading
history,
as
it
were,
of
some
of
the
other
people
who
were
involved
in
the
transaction.
On
dealing
with
them
individually,
there
has
been
no
reference
to
trading
history
of
the
Coulter’s,
who
represented
one-eighth
(1/8th)
of
the
investment.
The
only
history
of
a
trading
nature
(is
that)
of
Lesron,
which
represented
a
quarter
of
the
investment
(and)
was
a
subsequent
transaction,
and
of
course
we
know
that
Mrs
Swartz
did
not
have
a
trading
history,
so
that
five-eighths
(5/8ths)
of
the
overall
investment
is
held
by
corporations
or
persons
without
a
trading
history.
The
only
trading
history
that
was
referred
to,
which
was
not
disputed
by
the
taxpayer,
although
she
indicated
she
had
no
direct
knowledge
of
it
at
the
time,
was
that
of
Christine
Stolwyk
and
it
is
instructive
to
look
at
trading
history
that
was
submitted
because
it
represents
five
properties.
The
shortest
period
of
holding,
which
was
three
years;
the
longest
period
of
holding
was
seven
years.
It
does
not
represent
a
pattern
of
a
quick
buysell
for
profit.
Beyond
that,
this
history
(because
municipal
addresses
are
used),
we
can
only
assume
is
a
history
of
buying
and
selling
houses
rather
than
raw
land
and
all
of
the
properties
referred
to
by
the
Minister’s
counsel
deal
with
municipally
addressed
property.
I
suggest
it
is
not
relevant
to
this
consideration
because
the
taxpayer
did
not
know,
but
it
is
instructive
to
look
to
see
that,
in
fact,
this
was
not
a
real
estate
trader
in
a
speculative
sense,
at
least
on
the
face
of
the
documentation
or
the
facts
submitted
by
the
Minister.
The
key
in
my
submission
is
the
intention
of
the
taxpayer
at
the
time
of
purchase.
I
know
that
the
cases
have
referred
to
a
primary
and
secondary
intention
.
.
.
The
only
basis,
I
would
suggest,
that
the
Minister’s
assessment
can
be
upheld
would
be
if
a
secondary
intention
for
resale
at
a
profit
if
the
development
did
not
go
through
can
be
found.
There
is
(no)
direct
evidence
that
it
was
a
factor
in
the
purchase
of
the
property
(that
it
could
be
resold
at
a
profit),
nor
was
it
a
factor
in
the
decisions
that
were
made
throughout.
The
market
caught
this
party
and
the
people
involved
in
this
investment
by
surprise
and
it
was
contrary
to
the
expectations
or
original
plans
when
they
invested
in
this
property.
There
is
no
evidence
to
contradict
the
taxpayer’s
assertion
that
development
was
not
only
likely,
but
possible.
The
taxpayer’s
evidence
with
respect
to
that
remains
uncontradicted
and
unchallenged
and
it
is
to
the
effect
that
the
long
range
plans,
which
were
not
closely
held
secret
to
anyone,
were
that
the
city
services
were
to
be
extended
to
the
subject
property
and
the
property
was
located
on
a
main
road
at
an
intersection
in
the
northern
part
of
the
City
of
Oshawa,
an
area
which
was
the
logical
and
likely
place
for
the
growth
of
the
city
based
on
past
history.
That
evidence
is
not
challenged.
It
is
not
the
contention,
as
I
understand
it,
of
the
Minister,
that
this
was
not
a
viable
development
project.
The
plans
for
the
development
were
uncertain
only
to
the
extent
that
they
would
have
been
dependent
on
a
long
range
planning
that
they
would
be
allowed
by
the
City
of
Oshawa
and
the
later
region
of
Durham
and
anyone
who
would
be
able
to
say
with
certainty
precise
development
plans
for
land
zoned
agricultural
at
the
time
would
certainly
not
be
able
to
necessarily
back
up
those
plans
with
reality.
The
truth
of
the
matter
is
that
the
land,
the
subject
lands,
would
be
developed
and
that
is
irrefutable.
The
matter
of
their
development
would
be
dependent
on
a
long
range
planning
and
the
growth
next
to
the
property.
That,
in
my
submission,
is
a
significant
factor
in
justifying
the
witnesses’
indication
that
in
terms
of
the
building
of
houses
and
selling
of
houses
and/or
the
selling
of
lots,
that
phase
had
not
really
been
contemplated
or
discussed
and
that
is
very
consistent
because
the
investment
was
to
develop
in
whatever
way
the
planners
had
intended
the
growth
to
be.
It
would
have
been
a
simple
matter
for
the
taxpayer
to
come
to
precise
development
plans,
but
since
it
was
a
long
term
investment,
it
is
quite
acceptable
in
my
submission
that
those
long
term
plans
were
deferred
until
the
growth
of
the
area
had
reached
that
point
and
in
the
most
appropriate
development
would
have
been
found.
In
terms
of
the
taxpayer
having
the
feasibility
to
actually
take
part
in
the
development,
which
is
a
factor,
I
would
submit
that
she
did
indicate
in
answer
to
a
question
with
respect
to
that,
that
at
that
point
where
further
funds
would
have
been
required
of
a
substantial
nature,
arrangements
would
have
had
to
have
been
made
with
the
bank
or
for
other
financing
and
certainly
the
contact
she
had
through
her
family,
which
had
as
she
indicated
her
father-in-law
had
developed
land
in
the
past
and
been
one
of
the
reasons
for
her
interest
in
that
kind
of
investment,
would
have
gone
a
long
way
to
assist
her
in
being
able
to
place
the
necessary
financing
when
development
was
eminent.
Beyond
that,
it
would
have
been
15
or
10
or
5
years
later
at
a
point
perhaps
when
her
own
life
would
have
been
more
stable
as
a
young
person,
would
have
had
a
family
that
had
grown
more
to
the
point
where
financing
(the
immediate
drain
of
finances)
would
not
have
been
as
much
of
a
problem.
Some
mention
has
been
made
of
the
fact
that
development
of
this
property
remained
uncertain.
I
think
I
have
answered
that
or
attempted
to
justify
why
that
was
so
and
why
it
was
reasonably
so.
The
holding
of
the
property
was
certainly
manageable
throughout
the
duration
of
time
that
it
would
take
to
reach
the
development
stage.
That
has
been
established.
The
fact
that
there
was
real
estate
commission
paid,
we
have
her
evidence
that
no
realtors
were
contacted
to
list
the
property,
but
it
is
apparent
that
realtors
must
have
been
involved
in
the
deal
because
the
offer
that
is
before
you
does
indicate
that
it
is
through
a
real
estate
office.
That
is
not
uncommon
that
a
realtor
will
be
the
active
party
on
behalf
of
even
a
purchaser
to
negotiate
the
sale
and
still
get
his
commission
out
of
the
sale
price,
which
may
have
been
negotiated
to
include
allowance
for
the
real
estate
commission.
So,
the
fact
that
the
realtor
is
involved
does
not,
in
my
submission,
contradict
the
evidence,
sworn
evidence
that
there
was
no
listing
or
attempt
by
any
of
the
parties
to
sell
the
property
or
make
it
available
for
sale.
It
is
consistent
with
actually
the
practice
in
the
trade.
Now,
the
point
that
(the
Minister)
makes,
which
I
think
is
one
that
I
need
to
rebut
in
terms
of
his
argument
is
that—if
the
eventual
aim
of
a
group
of
investors
is
at
some
point
to
sell,
then
you
have
to
say
that
any
sale
is
in
the
nature
of
trade.
But
I
think
the
cases
which
show
that
that
is
only
a
case
if
it
was
sold
in
the
same
state
in
which
it
was
acquired.
If
the
intention
to
resell
in
the
same
state
it
was
acquired
and
development
throughout
has
been
held
to
be
a
capital
appreciation
kind
of
endeavour,
the
intention
was
not
to
sell
in
the
state
of
nature.
It
is
not
a
matter
of
having
land
and
inventory
and
in
selling.
The
intention
was
just
as
a
manufacturer
would
take
raw
material
and
make
something
and
then
sell
it,
but
if
you
bought
certain
raw
material
and
for
some
unforeseen
reason,
the
regulations
changed
and
the
government
did
not
allow
that
material
to
be
used
in
the
manufacture
and
the
manufacturer
was
able
to
resell
the
material
in
its
state
of
nature,
that
would
be
a
similar
and
comparable
fact
situation
that
would
be,
in
my
submission,
consistent
with
the
capital
gain.
It
is
the
act
of
doing
something
with
the
property
that
changes
its
character
that
then
puts
it
into
a
different
situation
and
unless
the
finding
can
be
made
that
the
intention
was
to
resell
the
property
in
its
state
of
nature
without
the
business
venture
of
development,
then
I
would
submit
that
the
argument
is
distinguishable
that
the
cases
do
not
really
support
that
finding
that
the
eventual
hope
of
disposing
of
lots
would.
.
.
.
Mrs
Swartz’
evidence
concerning
the
investment
nature
is
that
it
would
be
a
long-term
income-producing
investment
because
the
development
of
a
shopping
plaza
as
a
long-term
investment
is
a
common
way
as
a
developer
and
renter
of
that
kind
of
facility
to
keep
your
money
earning
money
and
that
that
was
a
likely
and
possible
consequence
of
the
holding
of
this
land
together
with
the
possibility
even
with
other
types
of
commercial
or
industrial
development,
all
of
which
were
unad-
mittedly
unascertained
at
the
time,
but
for
good
reasons.
.
.
.
Unfortunately,
the
past
history
has
shown
that
what
the
new
planning
principles
that
have
been
proclaimed
throughout
the
province
in
the
regional
planning
areas,
most
developers
in
this
area
feel
thay
are
at
the
mercy
of
the
planners
and,
in
fact,
it
is
the
planners
that
do
dictate
.
.
.
in
Toronto.
Judicial
references
provided
by
counsel
for
the
appellant
included
the
following:
Blackstone
v
The
Queen,
[1973]
CTC
842;
74
DTC
6020;
Tate
et
al
v
The
Queen,
[1974]
CTC
731;
74
DTC
6559;
Pierce
Investment
Corp
v
MNR,
[1974]
CTC
825;
74
DTC
6608;
Varennes
Holdings
Corporation
v
The
Queen,
[1975]
CTC
230;
75
DTC
5164;
De
Salaberry
Realties
Ltd
v
The
Queen,
[1976]
CTC
656;
76
DTC
6408;
Rokosh
Engineering
and
Construction
Ltd
v
The
Queen,
[1974]
CTC
536;
74
DTC
6375;
Hans
Reicher
v
The
Queen,
[1975]
CTC
659;
76
DTC
6001;
Arthur
Kruger,
Elmer
D
Bassani,
Pantel
Holdings
Ltd
v
MNR,
[1978]
CTC
2311;
77
DTC
208;
Racine,
Demers
and
Nolin
v
MNR,
[1965]
CTC
150;
65
DTC
5098;
Wilbert
House
v
MNR,
[1971]
Tax
ABC
887;
71
DTC
562.
For
the
respondent:
.
.
.
this
isn’t
really
a
secondary
intention
case.
It
is
a
classic
case
of
a
venture
in
the
nature
of
trade.
It
is
a
classic
case
where
a
piece
of
land
is
bought
and
there
is
no
clear
intention
at
the
time
of
purchase,
but
it
is
clear
that
the
long
range
intention
includes
selling
the
property
at
a
profit
in
the
form
of
disposing
of
lots.
That
in
itself
is
a
classic
situation
of
a
trader
disposing
of
his
inventory.
Mrs
Swartz
.
.
.
does
not
appear
to
be
the
driving
or
motivating
force
behind
the
venture.
There
was
really
no
participation
in
carrying
out
an
investment
in
the
sense
of
a
revenue
producing
investment
intent.
The
facts
in
this
case
are
that
it
appears
that
the
driving
force
behind
this
venture
was
Mrs
Stolwyk.
Counsel
relied
on
the
following
case
references,
and
quoted
particularly
as
indicated:
Sam
Grossman
v
MNR,
[1979]
CTC
2132;
79
DTC
141;
Chin
et
al
v
MNR,
[1980]
CTC
2296;
80
DTC
1246;
De
Salaberry
Realties
Ltd
v
The
Queen,
[1976]
CTC
656;
76
DTC
6408;
Bernard
Lehrer
v
MNR,
[1972]
CTC
255;
72
DTC
6224;
The
Queen
v
D
L
Anderson
et
al,
[1973]
CTC
606;
73
DTC
5444;
David
C
McDonald
v
The
Queen,
[1974]
CTC
836;
74
DTC
6644.;
From
Grossman
(supra)
at
152
and
2146
respectively:
The
appellant
must
show
that
rather
than
having
identification
as
inventory
for
trade,
the
property
had
the
character
of
an
investment
when
purchased,
was
treated
as
an
investment
while
held,
and
any
disposition
was
made
on
grounds
related
to
the
curtailment,
frustration
or
abandonment
of
its
potential
as
an
investment,
not
merely
as
the
realization
of
the
trading
gain
potential
inherent
to
it.
Findings
As
I
understand
the
argument
of
counsel
for
the
appellant,
this
appeal
is
based
on
the
presumption
that
the
following
facts
or
assertions
categorize
the
gain
as
on
capital
rather
than
on
income
account:
(a)
The
testimony
of
the
appellant
that
it
was
her
intention
to
retain
and
develop
the
property,
and
to
earn
investment
income
therefrom
over
a
long
period
of
time
was
uncontradicted.
(b)
This
was
the
first
land
transaction
for
the
taxpayer.
(c)
Her
own
funds
were
used.
(d)
The
carrying
costs
of
the
property
itself
before
development
were
foreseen
by
her
as
manageable
within
either
her
own
resources
or
from
property-generated
resources.
(e)
The
only
relevant
information
is
the
intention
of
the
taxpayer
at
the
time
of
purchase.
(f)
There
was
no
secondary
intention.
(g)
Unexpected
market
forces
by
themselves
produced
a
profit
realization
that
could
not
be
turned
down.
(h)
The
taxpayer
subsequently
entered
into
an
investment
property
arrangement
(the
Burkton
property).
I
would
comment
on
these
points
as
follows:
(a)
The
uncontradicted
testimony
of
an
appellant
should
not
be
and
is
not
ignored.
(b)
A
transaction,
when
it
is
the
first
and
only
one,
may
lend
itself
more
easily
to
the
“capital”
perspective.
(c)
Since
borrowing
initial
funds
has
sometimes
been
seen
as
an
indication
of
speculative
intent,
the
use
of
private
funds
might
be
viewed
as
the
reverse.
(d)
This
is
aligned
to
the
same
logic
as
the
point
immediately
above.
(e)
A
clear
demonstration
of
“income”
intent,
to
the
exclusion
of
“capital”
intent
would
render
virtually
irrelevant
any
other
evidence.
(f)
This
is
aligned
to
a
major
degree
with
the
point
immediately
above.
(g)
On
the
assumption
that
there
was
only
an
original
dedicated
“income”
intent,
the
effect
of
market
forces
would
provide
an
explanation
for
abandonment
or
frustration
of
that
intent.
(h)
A
factor
indicative
of
support
for
the
appellant’s
testimony
rather
than
against
it,
but
not
determinative
in
view
of
the
completely
altered
appellant’s
financial
position
as
a
result
of
this
transaction.
While
these
factors
enumerated
by
counsel
for
the
appellant,
taken
by
themselves
and
in
isolation,
could
point
to
an
“income”
intention,
that
conclusion
might
be
affirmed,
in
my
view,
if
the
following
two
situations
also
obtained:
—The
appellant
was
in
control
of
the
transactions
and
the
investment
decisions
to
be
made.
—There
were
no
other
relevant
factors
which
would
cast
a
serious
shadow
on
the
“income”
proposition.
The
first
of
the
immediately
above
noted
elements
(control)
is
not
the
case
in
this
appeal.
The
appellant
in
fact
holds
forth,
as
in
her
favour,
that
she
was
quite
unaware
of
the
trading
history
of
some
of
her
colleagues
in
the
venture,
indeed
there
were
some
of
them
she
did
not
even
know.
The
logical
extension
of
that,
if
I
understand
it
correctly,
would
be
to
propose
that
a
taxpayer
could
invest
funds
in
a
venture
as
a
minor
contributor;
in
which
the
asset
acquired
is
not
divided
proportionately;
in
which
the
total
investment
funds
were
fully
integrated
and
indistinguishable;
the
intentions
of
the
other
investors,
even
their
identities
unknown;
without
any
formal
written
agreements
between
the
parties
regarding
objectives
and
re-
sponsibilities;—and
still
claim
that
the
entire
venture
(or
at
least
his
own
mathematical
share),
was
for
a
particular
purpose
as
he
viewed
or
understood
the
venture,
or
as
it
may
have
been
explained
to
him.
I
am
unable
to
accept
that
proposition.
In
the
case
of
Bassani
v
MNR,
presently
under
appeal,
[1978]
CTC
2311;
77
DTC
208,
wherein
the
appeal
of
Bassani
was
allowed,
there
were
demonstrable
differences
in
the
individual
testimony
of
the
three
taxpayers
involved,
and
there
were
basic
provisions
in
the
agreements
between
the
parties
calling
for
the
division
of
the
property
itself
into
“one-fifths”,
to
reflect
proportionately
the
individual
investments
and
development
plans.
On
the
second
element
referred
to
immediately
above
(other
factors),
the
Board
makes
particular
reference
to
the
following:
—
The
plans
or
projections
for
the
use
of
the
property
were
vaguest
in
the
extreme.
This
cannot
allbe
attributed
to
the
planning
department
of
the
municipality,
nor
to
the
flexibility
which
the
purchasers
allegedly
wished
to
maintain.
In
such
an
uncertain
situation,
I
am
not
persuaded
that
this
investor
could
be
so
dedicated
to
a
“development”
project
that
other
attractive
and
more
immediate
profit
alternatives
would
have
been
completely
eliminated
or
relegated
to
an
insignificant
position.
I
do
not
consider
that
should
be
termed
a
“secondary
intention”.
Where
the
clear
possibility
of
purchase
for
sale
exists,
and
a
disposition
follows,
it
is
the
appellant’s
task
to
demonstrate
that
such
disposition
in
itself
was
not
a
major
motivation
for
purchase.
This
perspective
was
touched
on
in
Grossman
(supra)
and
in
Reg
in
Properties
Limited
v
MNR,
[1979]
CTC
2149;
79
DTC
156.
In
my
view,
a
taxpayer
assumes
a
substantial
inter-
pretive
responsibility
when
he
leaves
the
purpose
of
an
acquisition
in
too
nebulous
a
state.
That
responsibility
is
not
discharged
simply
by
the
selection
of
one
of
the
possibilities
which
could
have
existed,
and
classifying
it
as
the
major
or
sole
possibility
for
the
transaction.
—
The
lack
of
any
evidence
that
the
appellant
could
have
contributed
her
own
share
of
the
property
development
expense
(whatever
develpment
that
might
be),
let
alone
that
she
could
have
assumed
the
financial
burden
for
the
total
project
if
necessary
(see
Me/crete
Construction
Company
Limited
v
Her
Majesty
The
Queen,
[1977]
CTC
273;
77
DTC
5181,
and
Trans
Canada
Holdings
Limited
v
MNR,
[1980]
CTC
2791;
80
DTC
1689).
I
would
also
make
general
reference
to
two
recent
judgments
and
they
are:
Glacier
Realties
Limited
v
Her
Majesty
The
Queen,
[1980]
CTC
308;
80
DTC
6243,
and
Her
Majesty
The
Queen
v
Guy
Dumas,
80
DTC
6276.
The
contention
of
counsel
for
the
appellant
that
trading
transactions
should
be
held
to
be
on
“income”
account
only
when
the
intention
is
to
resell
the
asset
in
the
same
state
in
which
it
was
acquired,
is
not
supported
by
any
jurisprudence
to
which
I
have
been
referred.
Finally,
I
would
comment
on
the
emphasis
placed
by
counsel
for
the
appellant
upon
the
lack
of
proof
provided
by
the
Minister
regarding
the
trading
history
of
some
of
the
appellant’s
colleagues
in
this
venture.
While
such
evidence
as
the
Minister
did
provide
is
not
convincing
in
itself,
I
am
not
aware
that
there
is
any
clear
responsibility
upon
the
Minister
that
it
should
be
convincing.
The
prospect
that
a
trading
intention
was
within
the
operational
ambit
of
the
group,
or
at
least
some
members
of
the
group,
has
been
highlighted
by
the
Minister,
and
the
appellant,
having
full
knowledge
of
this
perspective
before
the
appeal,
has
provided
nothing
concrete
to
the
Board
which
would
reduce
it
to
an
insignificant
position.
It
therefore
remains
a
hurdle
which
had
not
been
overcome
by
the
appellant,
and
I
see
no
reason
for
the
Minister
to
go
beyond
presenting
the
prima
facie
case
for
the
assessment,
nor
do
I
understand
there
is
any
requirement
for
the
Board
to
arrange
the
various
intention
possibilities
in
some
sort
of
theoretical
order
of
preference.
Conclusion
A
taxpayer
is
entitled
to
arrange
his
affairs
in
such
a
way
as
to
attract
the
minimum
income
tax—but
when
viable
arrangements
are
not
made
and
evidence
provided
to
support
those
arrangements,
he
cannot
simply
interpret
the
lack
of
such
arrangemens
and
proof
in
a
way
to
attract
the
minimum
income
tax.
The
factors
upon
which
this
appellant
has
built
her
case
are
inadequate
to
disprove
the
prima
facie
case
for
the
Minister’s
assessment.
Decision
The
appeal
is
dismissed.
Appeal
dismissed.
Email this Content