Brulé
T.C.J.:
This
is
an
appeal
from
an
assessment
of
tax
by
the
Minister
of
National
Revenue
(the
“Minister”)
pursuant
to
the
anti-avoidance
provision
found
in
section
160
of
the
Income
Tax
Act
(the
“Art”).
The
amount
involved
is
$84,571.48
and
the
year
is
1993.
Facts
These
became
rather
complicated
with
the
property
involved,
including
mortgages,
the
people
involved,
and
the
value
of
the
property
transferred.
The
property
consists
of
the
business
known
as
Victoria
Tavern
and
situated
on
the
land
plus
building
at
400
Chilver
Road
in
Windsor,
Ontario.
On
or
about
January
14,
1993,
Rick
Morrison
(an
owner
of
the
property
along
with
the
appellant)
transferred
the
property
to
the
appellant.
At
the
time
of
the
transfer
Morrison
felt
the
property
had
a
value
of
$200,000
while
the
Minister,
in
the
assumptions
given
in
the
Reply
to
Notice
of
Appeal
indicated
the
fair
market
value
to
be
$295,000.
Neither
party
adduced
any
evidence
of
a
professional
valuation
of
the
fair
market
value
of
the
property
as
of
the
date
of
transfer.
Issue
If
the
appellant
fails
to
adduce
sufficient
evidence
to
demolish
the
Minister’s
assumption
of
fact
regarding
the
fair
market
value
of
the
property,
then
does
the
assumption
stand
necessarily
or
can
it
be
challenged
on
some
other
basis?
Analysis
In
Minister
of
National
Revenue
v.
Pillsbury
Holdings
Ltd.
(1964),
64
D.T.C.
5184
(Can.
Ex.
Ct.),
at
5188
,
Cattanach,
J.
quoted
from
the
decision
of
the
Supreme
Court
of
Canada
in
Johnston
v.
Minister
of
National
Reve-
nue,
[1948]
S.C.R.
486,
3
D.T.C.
1182
(S.C.C.)
per
Rand,
J.,
delivering
the
judgment
of
the
majority,
at
p.
489:
...Every
such
fact
found
or
assumed
by
the
assessor
or
the
Minister
must
then
be
accepted
as
it
was
dealt
with
by
these
persons
unless
questioned
by
the
appellant...
Cattanach,
J.
then
observed
that
a
taxpayer
will
meet
the
assumptions
of
fact
pleaded
by
the
Minister
by:
(a)
challenging
the
Minister’s
allegation
that
he
did
assume
those
facts,
(b)
assuming
the
onus
of
showing
that
one
or
more
of
the
assumptions
was
wrong,
or
(c)
contending
that,
even
if
the
assumptions
were
justified,
they
do
not
of
themselves
support
the
assessment.
These
three
possibilities
should
be
taken
as
exhaustive
of
a
taxpayer’s
options
for
overcoming
assumptions
of
fact
pleaded
by
the
Minister.
The
appellant
in
the
present
matter
has
not
availed
itself
of
option
(a)
or
(c).
Accordingly,
the
Minister’s
assumption
must
stand
if
the
appellant
fails
to
adduce
sufficient
evidence
to
show
that
the
Minister’s
assumption
is
wrong.
Has
the
appellant
adduced
sufficient
evidence
to
show
that
the
Minister’s
assumption
of
fact
was
wrong?
In
Hickman
Motors
Ltd.
v.
R.,
[1997]
2
S.C.R.
336,
97
D.T.C.
5363
(S.C.C.),
L’Heureux
Dubé,
J.
recently
set
out
the
law
regarding
the
onus
of
proof
in
taxation
matters.
The
principles
may
be
further
summarized
as
follows:
•
This
initial
onus
of
demolishing
the
Minister’s
exact
assumptions
is
met
where
the
appellant
makes
out
at
least
a
prima
facie
case;
•
Where
the
Minister’s
assumptions
have
been
demolished
by
the
appellant,
the
onus
shifts
to
the
Minister
to
rebut
the
prima
facie
case
made
out
by
the
appellant
and
to
prove
the
assumptions;
•
Where
the
burden
has
shifted
to
the
Minister,
and
the
Minister
adduces
no
evidence
whatsoever,
and
no
question
of
credibility
is
ever
raised
by
anyone,
the
taxpayer
is
entitled
to
succeed.
In
Sekhon
v.
Minister
of
National
Revenue
(October
24,
1997),
Doc.
96-
1588(UI),
96-1589(UI),
96-1590(UI),
96-1591(UI),
96-1592(UI),
96-
1593(UI),
96-1696(UI),
96-1976(UI),
96-1977(UI),
96-1978(UI),
96-
1980(UI),
96-1981(UI)
(T.C.C.),
heard
pursuant
to
the
Court’s
Informal
Procedure
for
unemployment
insurance
appeals,
Rowe,
J.
made
the
follow-
ing
comments
With
regard
to
the
meaning
of
prima
facie
in
the
context
of
burden
of
proof:
As
discussed
by
the
authors,
Sopinka,
Lederman,
Bryant
in
The
Law
of
Evidence
in
Canada
(Toronto:
Butterworths,
1992)
at
70-73
the
term
prima
facie
has
two
meanings.
First,
establishing
a
prima
facie
case
has
been
held
to
mean
that,
in
the
absence
of
contradictory
evidence
from
the
other
side,
the
evidence
adduced
is
found
to
be
true.
This
has
been
referred
to
as
a
compelled
fact
determination.
Second,
establishing
a
prima
facie
case
has
been
held
to
mean
that,
in
the
absence
of
contradictory
evidence
from
the
other
side,
the
evidence
adduced
might,
not
will,
be
held
to
be
true
and
this
view
is
referred
to
as
a
permissible
fact
inference.
I
prefer
the
latter
as
the
trier
of
fact
should
always
have
the
right,
and
indeed,
must
on
occasion,
in
the
discharge
of
duty,
pronounce
both
versions
a
load
of
codswallop.
As
Jean-Paul
Sartre
once
observed:
Sometimes
no
choice
is
a
choice.
In
the
present
matter,
the
Minister’s
assumption
of
fact
is
in
respect
of
the
fair
market
value
of
the
buildings,
land
and
business.
The
evidence
submitted
by
the
appellant
is
that
the
fair
market
value
of
the
“capital
property”
was
$210,000
at
the
time
of
transfer.
The
appellant
relies
upon
the
amount
of
consideration
given
in
exchange
for
the
property
as
indicated
in
the
transfer
document.
By
“capital
property”,
then,
the
appellant
should
be
taken
to
mean,
in
my
opinion,
the
property
transferred
pursuant
to
the
transfer
document.
This
would
appear
to
be
the
land
and
buildings
known
as
the
Victoria
Tavern.
The
appellant’s
evidence
does
not
address
the
question
of
the
fair
market
value
of
the
business
at
the
time
of
the
transfer.
The
transfer
document
is
evidence
only
of
the
value
of
the
consideration
given
for
the
land
and
building.
Further,
with
regard
to
the
land
and
building,
the
transfer
document
is
evidence
of
their
value
based
on
consideration
given
for
them.
It
does
not
appear
to
be
evidence
of
their
fair
market
value.
Accordingly,
the
appellant
may
very
well
have
made
out
a
prima
facie
case
regarding
the
value
of
the
land
and
buildings
at
the
time
of
transfer.
This,
however,
does
not,
in
my
opinion,
suffice
to
demolish
the
Minister’s
exact
assumption.
To
defeat
the
Minister’s
assumption
regarding
the
fair
market
value
of
the
land,
buildings
and
business
at
the
time
of
transfer,
the
appellant
needed
to
adduce
evidence
in
that
regard.
This
it
has
not
done.
In
Karnin
v.
Minister
of
National
Revenue
(1992),
93
D.T.C.
62
(T.C.C.)
at
64,
the
Court
said:
The
Minister
does
not
have
a
carte
blanche
in
terms
of
setting
out
any
assumption
which
suits
his
convenience.
On
being
challenged
by
evidence
in
chief
he
must
be
expected
to
present
something
more
concrete
than
a
simple
assumption.
The
appellant’s
evidence
simply
does
not
challenge
the
Minister’s
exact
assumption
of
fact.
The
Minister’s
assumption
regarding
the
fair
market
value
of
the
property
at
the
time
of
transfer
should
stand.
The
only
other
consideration
was
whether
or
not
Morrison
was
at
arm’s
length
with
the
other
owner
of
the
property,
the
appellant
Elaine
Brousseau
who
incorporated
944787
Ontario
Inc.
There
is
little
doubt
that
Morrison
is
a
non-arm’s
length
party
and
no
evidence
was
introduced
to
the
contrary.
No
more
need
be
said
of
this.
The
result
is
that
the
Minister’s
assumption
that
the
property
was
worth
$295,000
is
accepted
and
the
appeal
is
dismissed.
Counsel
for
the
respondent
is
entitled
to
make
her
submission
in
writing
respecting
costs
which
are
hereby
awarded
to
the
Respondent.
Appeal
dismissed.
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