Leger
T.C.J.
(orally):
HIS
HONOUR:
I
won’t
be
calling
upon
you,
Ms.
Thorn.
MS.
THORN:
Thank
you,
Your
Honour.
HIS
HONOUR:
I
am
now
going
to
give
you
an
oral
decision.
And
as
I
usually
do
in
cases
of
this
kind,
which
are
tried
in
an
informal
manner,
I
reserve
the
right
to
edit
the
decision
after
I
have
received
the
transcript,
and
if
necessary,
to
add
reasons.
The
facts
in
this
case
are
very
well
outlined
by
the
various
witnesses
who
have
given
evidence,
and
it’s
not
my
intention
to
review
them.
The
question
to
be
answered
by
this
Court,
is
did
the
appellants
have
a
reasonable
expectation
of
profit
from
renting
the
Wallace
property
and
the
Delaware
property
during
the
taxation
years
of
1990,
1991
and
1992,
and
that
the
appellants
were
properly
assessed
by
Revenue
Canada.
Section
18
and
Section
18
(1)
(a)
of
the
Income
Tax
Act
reads
as
follows,
and
I
am
quoting,
“In
computing
the
income
of
a
tax
payer
from
a
business
or
property,
no
deduction
shall
be
made
in
respect
of
an
outlay
or
expense,
except
to
the
extent
that
it
was
made
or
incurred
by
the
taxpayer
for
the
purpose
of
gaining
or
producing
income
from
the
business
or
property.”
After
having
heard
and
considered
the
evidence,
the
Court
finds
that
the
outlay
and
expense
were
not
made
or
incurred
by
the
appellants
for
the
purposes
of
gaining
or
producing
income
from
a
property.
The
evidence
also
disclosed
that
some
of
the
so
called
losses
claimed
were
personal
or
living
expenses
of
some
of
the
appellants.
These
are
not
deductible,
since
their
deduction
is
prohibited
by
Section
18
and
18
(1)
(h)
of
the
Act,
which
I
will
now
proceed
to
quote.
“In
computing
the
income
of
a
taxpayer
from
a
business
or
a
property,
no
deduction
shall
be
made
in
respect
of
personal
or
living
expenses
of
the
taxpayer,
other
than
travel
expenses
incurred
by
the
taxpayer
while
away
from
home
in
the
course
of
carrying
on
the
taxpayer’s
business.”
There
are
also
further
provisions
in
the
Income
Tax
Act
which
were
violated
by
the
appellants.
These
are
found
in
Section
67
of
the
Act,
and
I’m
quoting
again
Section
67.
“In
computing
income,
no
deduction
shall
be
made
in
respect
of
an
outlay
or
expense
in
respect
of
which
any
amount
is
otherwise
deductible
under
this
Act,
except
to
the
extent
that
the
outlay
or
expense
was
reasonable
in
the
circumstances.”
After
having
considered
all
of
the
evidence,
and
after
having
considered
the
submissions
of
counsel,
the
Court
finds
that
it
has
not
been
convinced
by
a
preponderance
of
evidence
that
the
expenses
claimed
or
incurred
in
reference
to
the
said
properties
were
incurred
for
the
purposes
of
gaining
and
producing
income,
or
were
reasonable
in
the
circumstances.
For
these
reasons,
the
decision
of
the
Minister
of
National
Revenue
is
affirmed,
and
the
appeals
are
dismissed,
with
costs.
MS.
THORN:
Your
Honour,
these
are
informal
procedures,
therefore,
the
Minister
will
not
be
seeking
costs.
HIS
HONOUR:
That
does
not
concern
me.
MS.
THORN:
Thank
you,
Your
Honour.
HIS
HONOUR:
So
this
Court
now
is
terminated
for
this
week,
and
we
will
adjourn
sine
die.
THE
REGISTRAR:
Order.
This
sitting
of
the
Tax
Court
of
Canada,
in
the
City
of
Toronto,
has
now
concluded.
Appeal
dismissed.
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