Hugessen
J.A:
—
This
is
an
appeal
from
a
judgment
which
dismissed
the
appellant’s
appeal
of
the
Minister’s
disallowance
for
the
taxation
years
1980
through
1983
of
certain
“soft”
costs
in
relation
to
a
Multiple
Unit
Residential
Building
(MURB)
development
in
which
the
taxpayer
had
invested.
We
are
all
of
the
view
that
the
judgment
cannot
stand.
If
we
correctly
understand
the
trial
judge,
the
basis
for
his
decision
was
his
view
that
the
various
agreements
entered
into
between
the
developer
(Marbar),
the
appellant
and
his
co-investors,
and
the
numbered
company
(221,401)
which
acted
as
trustee
for
the
latter
were
subject
to
certain
unfulfilled
conditions
precedent
and
were
therefore
ineffective
to
convey
beneficial
ownership
to
the
investors.
He
said:
The
conditions
precedent
inhere
in
the
contract
provisions
earlier
above
recited.
The
contractor,
Marbar’s
undertakings
in
paragraph
2.2.1(b)
to
negotiate
contracts
for
general
contracting
and
subtrades,
in
paragraph
2.2.1(c)
to
negotiate
with
all
government
agencies
for
obtaining
all
zoning
and
planning
permissions
and
permits,
in
paragraph
2.2.2(a)
to
arrange
interim
financing
and
in
paragraph
2.2.2(b)
to
obtain
long-term
mortgage
financing
by
a
series
of
unit
strata-title
mortgages,
in
paragraph
2.2.3
to
arrange
for
off-site
services,
in
paragraph
2.2.9
to
obtain
a
murb
type
31
certificate
from
C.M.H.C.
and
in
paragraph
3.4
to
convey
title
to
221,401
subject
only
to
the
aforesaid
long-
term
unit
mortgages
and
other
usual
reservations
and
easements,
are
all
conditions
precedent
without
the
fulfilment
of
which
the
whole
elaborate
scheme
would
be,
and
in
some
instances
was,
reduced
to
utter
futility.
There
is
nothing
or
record
here
to
show
that
nay
one
of
those
conditions
precedent,
among
all
of
such
conditions
inhering
in
the
terms
agreed
by
the
parties,
was
fulfilled
.
.
.
.
[Reasons,
Appeal
Book
pages
297-98.
]
Try
as
we
might,
we
are
unable
to
see
in
any
of
the
provisions
cited
by
the
learned
judge
anything
remotely
approaching
a
true
condition
precedent.
Nowhere
is
the
agreement
said
to
be
contingent
upon
the
fulfilment
of
one
or
more
of
those
conditions,
nor
is
there
any
suggestion
that
the
consequence
of
their
non-fulfilment
will
be
the
nullity
of
the
agreement.
They
are
all
simple
promises
and
undertakings
by
the
contractor
to
do
certain
things
which
are
commonly
found
in
contracts
of
this
nature.
Manifestly
the
intention
of
the
parties
was
that
the
various
agreements
should
be
effective
forthwith,
and
that
is
what
happened:
the
appellant
and
his
fellow
investors
acquired
a
beneficial
interest
in
the
property
on
the
relevant
date,
December
17,
1980.
The
respondent
also
sought
to
support
the
result
reached
by
the
trial
judge
on
two
grounds
mentioned
but
not
relied
on
by
the
latter.
The
first
is
based
on
the
developer’s
non-compliance
with
subsection
50(6)
of
the
Real
Estate
Act
(R.S.B.C.
1979,
c.356):
(6)
No
developer,
and
no
person
on
behalf
of
a
developer,
shall
sell,
or
lease,
or
offer
for
sale
or
lease,
or
knowingly
assist
in
the
sale
or
lease
or
offering
for
sale
or
lease
of,
subdivided
land
or
a
time
share
interest,
unless
a
prospectus
is
the
form
and
including
the
particulars
required
under
section
51
is
submitted
to,
and
accepted
and
filed
by,
the
superintendent.
The
consequence
of
such
non-compliance
is
set
out
in
section
62
of
the
same
statute:
62.
No
promise
or
agreement
to
purchase
or
lease
any
subdivided
land
or
time
share
interest
is
enforceable
against
the
purchaser
or
tenant
by
a
person
who
has
breached
any
of
the
provisions
of
this
Part,
or
by
a
successor
in
title
of
that
person.
[Emphasis
added.]
In
our
view
there
is
simply
no
merit
in
the
contention
that
this
provision
has
the
effect
of
rendering
non-complying
agreements
void.
By
its
terms
the
section
simply
makes
the
agreement
unenforceable
against
the
purchaser
(here
221,401
and,
through
the
latter,
the
appellant
and
the
other
investors)
at
the
suit
of
the
developer
(here
Marbar).
Clearly
that
is
quite
different
from
saying
that
the
agreement
is
void
or
an
absolute
nullity.
The
second
alternative
argument
is
equally
unfounded.
It
is
based
on
the
contention
that
the
various
agreements
in
issue
were
executed
under
seal.
It
is
said
that
this
resulted
in
the
Purchase
and
Development
Agreement
between
Marbar
and
221,401
being
unenforceable
against
the
investors
(including
the
appellant)
who
were
not
parties
to
it.
Assuming
the
premise
to
be
correct,
the
alleged
unenforceability
of
the
agreement
against
the
investors
does
not
deprive
the
latter
of
their
beneficial
interest
in
the
property.
Whether
they
be
viewed
as
undisclosed
principals
or
as
beneficiaries
of
a
trust,
it
is
clear
that
they
intended
to
and
did
acquire
such
an
interest
through
the
vehicle
of
the
numbered
company
upon
execution
of
the
Purchase
and
Development
Agreement.
For
these
reasons
the
appeal
will
be
allowed,
the
judgment
of
the
Trial
Division
will
be
set
aside
and
the
matter
will
be
referred
back
to
the
Minister
for
reassessment
on
the
basis
that
during
the
relevant
taxation
years
the
appellant
held
a
beneficial
interest
in
the
subject
property.
The
appellant
is
entitled
to
his
costs
to
be
taxed
both
here
and
at
trial.
Appeal
allowed.
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