Rowe
T
.
C.J.:
HIS
HONOUR:
The
Appellant
appeals
from
a
reassessment
of
income
tax
for
the
1992
and
1993
taxation
years.
With
respect
to
those
years,
the
Appellant
reported
a
certain
amount
of
commission
income
from
selfemployment
selling
real
estate
but
takes
the
position
that
the
income
should
have
been
split
with
Ms.
How,
his
partner.
The
Minister’s
position
is
that
at
all
material
times
the
Appellant
was
a
realtor
licenced
to
sell
real
estate
in
British
Columbia,
but
Ms.
How
was
not
in
fact
a
realtor
licenced
to
sell
real
estate
in
British
Columbia
or
any
other
province
or
territory
of
Canada,
and
that
it
was
the
Appellant,
in
his
capacity
as
a
self-employed
licenced
realtor,
who
earned,
on
a
commission
basis,
income
from
selling
real
estate
in
1992
and
1993.
Mr.
Sly
testified
that
in
1991,
he
and
Ms.
How,
in
partnership,
had
operated
a
brokerage
by
way
of
a
dealership
selling
manufactured
homes
under
the
Motor
Vehicle
Brokers
Act
in
British
Columbia.
Basically,
they
functioned
the
same
way
as
realtors
except
there
was
no
requirement
for
a
licence.
However,
the
licencing
requirements
changed
and
the
Appellant
then
took
the
real
estate
course
and
obtained
the
real
estate
licence
and
thereafter
generated
commissions
as
permitted
by
the
real
estate
regulatory
provisions
in
British
Columbia.
One
of
the
prerequisites
for
obtaining
the
realtor’s
licence
was
that
the
brokerage
licence
had
to
be
abandoned.
Accordingly,
in
1992
and
1993,
while
the
parties
operated
as
before,
now
it
was
only
the
Appellant
who,
as
a
matter
of
law,
was
capable
of
generating
the
income
which
comprised
100
per
cent
of
the
income
of
the
putative
partnership.
The
provisions
of
the
Real
Estate
Act
of
British
Columbia
are
such
that
an
agent
is
an
individual
who
is
appropriately
licenced,
and
section
37
of
the
Partnership
Act
of
British
Columbia
reads
that,
“a
partnership
is
in
every
other
case
dissolved
by
the
happening
of
any
event
which
makes
it
unlawful
for
the
business
of
the
firm
to
be
carried
on
or
for
the
members
of
the
firm
to
carry
it
on
in
partnership.”
One
of
the
hallmarks
of
partnership
is
that
it
is
a
relationship
which
exists
between
persons
carrying
on
business
in
common
with
a
view
of
profit.
Once
the
new
licencing
requirements
came
into
effect
and
only
Mr.
Sly
had
the
appropriate
licence,
it
was
not
then
possible,
as
a
matter
of
law,
for
Paulette
How
to
be
a
partner
in
the
generating
and
earning
of
that
income.
That
issue
was
addressed
in
the
case
of
Continental
Bank
of
Canada
v.
R.
(1996),
96
D.T.C.
6355
(Fed.
C.A.),
a
decision
of
the
Federal
Court
of
Appeal.
In
that
particular
instance,
Mr.
Justice
Linden,
speaking
for
the
court,
said
at
page
6364
as
follows:
However,
even
if
I
found
the
arrangement
before
me
to
be
a
partnership
according
to
the
partnership
definition,
Leasing’s
and
Continental’s
participation
in
the
partnership
would
be
legally
invalid
by
virtue
of
their
contravention
of
the
Bank
Act.
Similarly
in
this
case,
there
is
a
requirement
in
the
public
interest
that
the
income
from
selling
real
estate
be
generated
by
individuals
who
are
licenced
and
subject
to
the
appropriate
supervision.
The
events,
in
effect,
overtook
the
parties
here
who
at
all
times
material
acted
in
good
faith,
and
Ms.
How
continued
to
assist
in
the
generation
of
income.
It
is
unfortunate
that
her
contribution
wasn’t
recognized
by
the
parties
having
set
up
a
relationship
whereby
Mr.
Sly
would
be
the
employer
and
Ms.
How
the
employee
in
recognition
of
her
considerable
services.
However,
my
jurisdiction
is
to
determine,
as
a
matter
of
law
on
the
facts
before
me,
whether
the
Minister’s
assessments
are
correct.
In
this
particular
instance,
for
the
reasons
that
I
have
stated,
I
must
answer
that
in
the
affirmative.
The
Minister’s
assessments
are
in
fact
correct
and
the
partnership
as
alleged
cannot
be
recognized
for
the
reasons
stated.
Accordingly
therefore
the
appeal
is
hereby
dismissed.
Appeal
dismissed.
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