Le
Dain,
J
(concurred
in
by
Pratte,
J
and
Hyde,
DJ):—This
is
an
appeal
from
a
judgment
of
the
Trial
Division
dismissing
an
appeal
from
a
judgment
of
the
former
Tax
Appeal
Board
which
had
dismissed
an
appeal
against
reassessments
in
respect
of
the
taxation
years
1963,
1964
and
1965.
The
issue
is
whether
the
profit
realized
by
the
appellant
from
the
Sale
of
properties
which
the
appellant
purchased
for
the
purpose
of
establishing
shopping
centres
was
capital
gain
or
income
from
a
business
within
the
meaning
of
sections
3
and
4
and
paragraph
139(1)(e)
of
the
Income
Tax
Act,
RSC
1952,
c
148.
The
appellant
was
incorporated
by
letters
patent
under
the
laws
of
the
Province
of
Quebec
on
May
14,
1958,
with
the
following
purposes:
1.
To
purchase
or
otherwise
acquire,
urban
and
rurai
land
and
immoveabie
property;
to
hold,
subdivide,
develop,
improve,
and
sell
same,
to
erect
thereon
all
kinds
of
buildings,
including
residential,
commercial,
industrial,
institutional,
public
and
private
buildings;
to
hold,
administer,
lease,
sell
or
otherwise
dispose
of
same;
2.
To
develop,
install
and
construct
all
kinds
of
improvements
necessary
for
the
habitation
and
use
of
such
enterprises
and
projects,
and
which
may
seem
directly
or
indirectly
calculated
to
advance
the
company’s
interests,
including
roads,
sidings,
streets,
shops,
stores,
and
other
works
and
conveniences,
sewer
systems,
water
systems,
heating
systems,
and
power
developments;
3.
To
carry
on,
conduct
and
engage
in,
in
any
way
or
manner
whatsoever,
the
business
and
activities
of
a
holding
or
investment
company
of
real
estate,
for
the
sole
purpose
of
deriving
rents
and
revenues
therefrom;
The
shares
of
the
appellant
were
beneficially
owned
at
all
material
times
by
Cemp
Investments
Ltd
(hereafter
referred
to
as
“Cemp”)
in
the
proportion
of
45%,
by
Mr
Leo
Kolber,
the
president
of
Cemp,
in
the
proportion
of
5%,
and
by
Ivanhoe
Corporation
(hereafter
referred
to
as
“Ivanhoe”)
in
the
proportion
of
50%.
Cemp
is
one
of
the
largest
real
estate
investment
companies
in
Canada.
It
is
controlled
by
trusts
established
by
the
late
Samuel
Bronfman
for
his
children
and
grandchildren.
Through
subsidiary
and
associated
companies
Cemp
has
interests
in
several
shopping
centres
and
large
commercial
buildings.
The
principal
subsidiary
through
which
Cemp
has
made
real
estate
investments
is
a
company
which
at
the
time
of
the
transactions
under
consideration
bore
the
name
Cemp
Holdings
Ltd.
In
1972
its
name
was
changed
to
Fairview
Corporation
of
Canada
Limited
(hereafter
referred
to
as
“Fairview”).
Fairview
manages
the
shopping
centres
in
which
Cemp
has
an
interest.
Ivanhoe
is
a
real
estate
company
formed
to
acquire
and
develop
property
for
the
purpose
of
shopping
centres
and
other
locations
for
the
stores
of
Steinberg’s
Limited.
The
shares
of
Ivanhoe
are
owned
by
Steinberg’s
Limited
and
members
of
the
Steinberg
family.
The
appellant
was
incorporated
at
the
instance
of
Cemp
and
Ivanhoe
to
establish
one
or
more
large
shopping
centres
in
the
Montreal
area.
At
the
time
of
its
incorporation
both
Cemp
and
Ivanhoe
were
well
established
as
developers
of
shopping
centres.
Ivanhoe
sought
a
partnership
with
Cemp
because
of
the
latter’s
experience
with
the
development
of
large
shopping
centres.
The
Steinberg’s
research
department
made
the
market
surveys
to
determine
the
location
of
the
proposed
shopping
centres
to
be
established
by
the
appellant,
and
Ivanhoe
conducted
the
negotiations
for
the
acquisition
of
the
necessary
properties,
but
Cemp
through
its
subsidiary
Cemp
Holdings
Ltd
(now
Fairview)
was
to
assume
the
leading
role
in
the
development
and
management
of
the
proposed
shopping
centres.
On
June
19,
1958
the
appelant
purchased
from
La
Communauté
des
Soeurs
de
Charité
de
la
Providence
a
piece
of
property
of
1,106,324
square
feet
on
De
Salaberry
Street
in
the
City
of
Montreal
(hereafter
referred
to
as
the
“De
Salaberry
property”)
for
the
price
of
$885,059.20.
The
market
survey
prepared
by
the
Steinberg’s
organization
strongly
recommended
the
development
of
a
shopping
centre
on
this
site.
Prior
to
the
purchase,
the
attorneys
for
the
appellant
carried
out
a
title
search
and
provided
the
appellant
with
a
favourable
opinion
as
to
the
title
to
the
property.
Unknown
to
the
appellant
or
its
attorneys,
ihe
City
of
Montreal
had
adopted
a
resolution
on
May
26,
1958,
directing
that
the
necessary
procedures
be
adopted
for
the
homologation
of
an
area
of
about
600,000
square
feet
in
the
middle
of
the
De
Salaberry
property
for
the
opening
of
streets
and
the
establishment
of
a
park.
Under
the
city’s
by-laws,
the
effect
of
the
proposed
homologation
was
to
prevent
the
issue
of
a
building
permit
in
respect
of
the
said
property.
The
appellant
did
not
learn
of
the
proposed
homologation
until
some
two
months
after
its
purchase
of
the
property.
For
a
period
of
some
two
years
the
appellant
sought
to
persuade
the
City
of
Montreal
to
abandon
or
modify
the
proposed
homologation
and
to
make
the
necessary
zoning
changes
to
permit
the
development
of
a
shopping
centre
on
the
De
Salaberry
property,
but
it
was
unsuccessful.
The
appellant
abandoned
its
efforts
when
a
rival
shopping
centre,
established
about
a
mile
away,
obtained
some
of
the
principal
tenants
that
the
appellant
had
been
counting
on
for
its
own
development.
Steinberg’s
Limited
signed
a
lease
with
the
other
shopping
centre
in
September
1961.
The
appellant
sold
parcels
of
the
De
Salaberry
property
totalling
368,200
square
feet
at
a
profit
to
builders
in
January
and
October
1963.
In
September
1964
an
area
consisting
of
520,108
square
feet
was
expropriated
by
the
City
of
Montreal.
The
remainder
of
the
property,
consisting
of
218,016
square
feet,
was
ceded
by
the
appellant
to
the
city
for
streets
to
facilitate
the
sale
to
the
builders.
On
May
17,
1962
the
appellant
purchased
from
the
Crown
in
right
of
Canada
a
piece
of
property
of
1,304,481
square
feet
on
Metropolitan
Boulevard
between
20th
and
32nd
Streets
in
Lachine
(hereafter
referred
to
as
the
Lachine
property”)
for
the
price
of
$971,373.38.
This
purchase
was
also
based
on
a
market
survey
by
the
Steinberg’s
research
department
which
recommended
the
development
of
a
shopping
centre
at
this
location.
As
in
the
case
of
the
De
Salaberry
property,
the
Lachine
property,
at
the
time
of
its
purchase,
was
not
zoned
in
a
manner
to
permit
the
establishment
of
a
shopping
centre,
but
the
appellant
purchased
it
on
the
strength
of
assurances
that
the
necessary
rezoning
would
be
carried
out.
In
fact,
there
was
strong
opposition
from
local
merchants
to
the
proposed
shopping
centre,
and
successive
municipal
administrations
refused
to
carry
out
the
necessary
rezoning.
The
appellant
sold
the
Lachine
property
to
Rojax
Corporation
at
a
profit
on
June
20,
1963.
Profit
on
the
sale
of
the
De
Salaberry
and
Lachine
properties
was
included
by
reassessment
in
the
taxable
income
of
the
appellant
for
the
taxation
years
1963,
1964
and
1965
as
follows:
1963
—
$372,126.17
1964
—
110,050.60
1965
—
319,594.15
The
appellant
appealed
against
these
reassessments
to
the
former
Tax
Appeal
Board.
The
Board
dismissed
the
appeal.
It
held
that
at
the
time
the
appellant
purchased
the
De
Salaberry
and
Lachine
properties
it
had
the
secondary
intention
to
dispose
of
them
at
a
profit
should
its
plans
for
the
development
of
a
shopping
centre
be
frustrated.
The
Board
found
that
the
pattern
of
dealing
on
the
part
of
the
Cemp
and
Ivanhoe
groups
was
to
assume
the
risk
of
being
able
to
obtain
the
necessary
zoning
after
a
purchase
had
been
made,
and
if
unable
to
obtain
it,
to
sell
the
property.
It
said
[[1970]
Tax
ABC
977
at
982]:
.
.
.
They
are
not
concerned
with
the
zoning.
As
said
by
one
of
the
appellant’s
witnesses:
“we
take
the
risk
that
we
will
have
enough
push
to
get
the
appropriate
zoning.
If
it
does
not
work
we
sell
the
property.”
This
is
evidence
of
a
second
intention.
The
appellant
appealed
from
this
decision
to
the
Trial
Division
of
this
Court.
Upon
the
basis
of
the
evidence
adduced
before
it,
the
Court
came
to
the
same
conclusion,
for
essentially
the
same
reasons,
as
the
Tax
Appeal
Board
had,
and
accordingly
dismissed
the
appeal.
The
trial
judge
devoted
the
greater
part
of
his
judgment
to
an
analysis
of
the
reiationship
of
the
appellant
to
the
Bronfman
and
Steinberg
groups
of
real
estate
companies,
and
to
an
elaboration
of
the
holding
that
the
intention
of
the
appellant
in
purchasing
the
De
Salaberry
and
Lachine
properties
must
be
viewed
in
the
light
of
the
general
course
of
conduct
of
these
groups
of
companies.
He
concluded
that
the
appellant
was
an
instrument
of
these
groups
of
companies,
that
their
general
character
included
that
of
traders
in
land,
and
that
the
appellant
must
be
considered
to
be
a
trader
in
land.
This
general
conclusion
appears
to
have
been
based
essentially
on
specific
finindgs
of
fact
which
may
have
summarized
as
follows:
1.
the
members
of
the
controlling
groups
generally
purchased
property
for
a
shopping
centre
site,
as
did
the
appellant
in
the
present
case,
before
obtaining
the
necessary
zoning
to
permit
such
development,
and,
therefore,
necessarily
contemplated
the
possibility,
as
a
motivating
consideration
at
the
time
of
such
purchase,
that
their
plans
for
development
might
be
frustrated
by
failure
to
obtain
the
necessary
zoning
and
that
they
might
be
obliged
to
resell
the
property;
and
2.
the
members
of
the
controlling
groups
were
involved
from
time
to
time,
as
was
the
appellant
in
the
present
case,
in
the
sale
of
land
that
for
one
reason
or
another
turned
out
to
be
surplus,
and
that,
taken
as
a
whole,
the
volume
of
such
transactions
was
a
significant
one.
There
can
be
no
doubt,
on
the
evidence,
that
the
appellant
purchased
the
De
Salaberry
and
Lachine
properties
with
the
intention
of
establishing
shopping
centres
on
them.
This
was
found
as
a
fact
by
both
the
Tax
Appeal
Board
and
the
Trial
Division.
The
question
is
whether,
at
the
time
of
such
purchase,
the
appellant
also
had,
as
an
operating
motive
for
purchase,
the
secondary
intention
to
turn
the
properties
to
account
by
resale
should
its
plans
to
establish
the
shopping
centres
be
frustrated.
The
concept
of
a
secondary
intention
to
resell
as
an
indication
of
an
adventure
or
concern
in
the
nature
of
trade
has
been
considered
and
applied
in
a
number
of
decisions.
An
exposition
of
this
concept
to
which
reference
is
frequently
made
is
to
be
found
in
the
judgment
of
Noël,
J
(as
he
then
was)
in
Racine
et
al
v
MNR,
[1965]
CTC
150
at
159;
65
DTC
5098
at
5103,
where
he
said:
To
give
to
a
transaction
which
involves
the
acquisition
of
capital
the
double
character
of
also
being
at
the
same
time
an
adventure
in
the
nature
of
trade,
the
purchaser
must
have
in
his
mind,
at
the
moment
of
purchase,
the
possibility
or
reselling
as
an
operating
motivation
for
the
acquisition;
that
is
to
say
that
he
must
have
had
in
mind
that
upon
a
certain
type
of
circumstances
arising
he
had
hopes
of
being
able
to
resell
it
at
a
profit
instead
of
using
the
thing
purchased
for
purposes
of
capital.
Generally
speaking,
a
decision
that
such
a
motivation
exists
will
have
to
be
based
on
inferences
flowing
from
circumstances
surrounding
the
transaction
rather
than
on
direct
evidence
of
what
the
purchaser
had
in
mind.
A
speculative
character
in
the
primary
purpose
of
acquisition
for
investment
has
been
taken
as
an
indication
of
a
secondary
intention
to
resell
should
the
primary
purpose
fail.
Such
was
the
case
in
Regal
Heights
Limited
v
MNR,
[1960]
SCR
902;
[1960]
CTC
384;
60
DTC
1270,
where
promoters
who
purchased
land
for
the
purpose
of
developing
a
shopping
centre
failed
to
obtain
the
necessary
department
store
as
a
tenant
and
resold
the
land
at
a
profit.
In
delivering
the
judgment
of
a
majority
of
the
Supreme
Court
of
Canada
holding
that
the
transaction
was
a
venture
in
the
nature
of
trade
and
the
profit
accordingly
taxable,
Judson,
J
said
[at
p
389
[1272]]:
.
.
.
The
establishment
of
a
regional
shopping
centre
was
always
dependent
upon
the
negotiation
of
a
lease
with
a
major
department
store.
There
is
no
evidence
that
any
such
store
did
anything
more
than
listen
to
the
promoters’
ideas,
There
is,
understandably,
no
evidence
of
any
intention
on
the
part
of
these
promoters
to
build
regardless
of
the
outcome
of
these
negotiations.
There
is
no
evidence
that
these
promoters
had
any
assurance
when
they
entered
upon
this
venture
that
they
could
interest
any
such
department
store.
Their
venture
was
entirely
speculative.
In
the
present
case
the
appellant
was
the
instrument
of
Cemp
and
Ivanhoe,
both
of
whom
had
extensive
experience
in
the
development
of
shopping
centres.
They
clearly
had
the
financial
capacity
and
expertise
required
for
such
an
enterprise
and
they
would
have
reason
to
believe,
from
their
previous
experience
and
contacts,
that
they
would
be
able
to
obtain
the
necessary
tenants.
The
trial
judge
found,
however,
as
did
the
Tax
Appeal
Board,
that
the
appellant
speculated
on
being
able
to
obtain
the
necessary
rezoning
to
permit
the
development
of
shopping
centres
on
the
De
Salaberry
and
Lachine
properties.
Whether
or
not
the
appellant
had,
at
the
time
of
purchase,
a
secondary
intention
to
turn
the
De
Salaberry
and
Lachine
properties
to
account
should
its
plans
to
develop
shopping
centres
be
frustrated
by
failure
to
obtain
the
necessary
rezoning
is,
of
course,
a
question
of
fact.
‘While
this
is
technically
not
a
case
of
concurrent
findings
of
fact,
since
the
decisions
of
the
Tax
Appeal
Board
and
the
Trial
Division
were
not
based
upon
the
same
record,
this
Court
should
not
reverse
the
finding
of
fact
of
the
trial
judge
on
this
issue
unless
we
are
of
the
opinion
that
it
is
clearly
wrong.
It
is
not
enough
that
we
might
have
come
to
a
different
conclusion
on
the
facts
had
we
been
in
his
place.*
The
findings
of
the
trial
judge
on
this
issue
are
reflected
in
the
following
passages
from
his
judgment:
.
.
.
No
attention
is
given
to
the
matter
of
zoning
before
purchasing
because
it
is
assumed
that
any
difficulty
in
that
respect
can
be
overcome.
The
little,
if
any,
attention
paid
to
zoning
and
the
assumption
that
any
difficulty
in
that
regard
could
be
overcome
have
been
proven
wrong
in
the
present
case
for
the
two
purchases
of
the
appellant.
In
my
opinion
Such
carelessness
about
zoning
indicates
strongly
that
the
main
objective
is
to
acquire
land
that
can
always
be
disposed
of
if
the
plans
are
frustrated.
In
so
far
as
the
De
Salaberry
property
is
concerned,
the
immediate
cause
of
the
frustration
of
the
appellant’s
plans
was
the
homologation
of
a
large
area
in
the
centre
of
the
property
for
the
opening
of
streets
and
the
establishment
of
a
park,
but
even
if
such
homologation
had
not
taken
place,
the
appellant
would
have
had
to
obtain
a
change
in
the
zoning
regulations.
Mr
Goldfarb,
Vice-President
of
Development
and
general
manager
of
Ivanhoe,
said,
.
.
it
wasn’t
adequate
just
to
lift
the
proposed
homologation,
the
land
had
to
be
zoned
and
a
permit
had
to
be
granted
..
.”.
Thus,
while
the
evidence
is
clear
that
at
the
time
of
purchase
the
appellant
did
not
know
of
or
anticipate
the
proposed
homologation,
it
did
assume
the
risk,
to
the
extent
that
there
was
such
a
risk,
of
not
being
able
to
obtain
the
necessary
zoning
for
the
De
Salaberry
property,
as
well
as
for
the
Lachine
property.
Mr
Gesser,
Vice-President
Finance
of
Cemp,
testified
with
respect
to
the
question
of
zoning:
Q.
Prior
to
this
time,
prior
to
1962
or
’63
or
’64,
had
you
ever
not
been
able
to
obtain
satisfactory
zoning?
A.
We
never
had
any
difficulty.
Mr
Kolber,
president
of
Cemp,
testified
as
follows:
Q.
Did
you
anticipate
any
difficulty
of
changing
the
zoning?
A.
No,
not
at
all,
otherwise
there
would
be
no
point
in
buying.
Q.
Now
what
was
your
intention
in
respect
to
both
these
pieces
of
property,
the
De
Salaberry
Street
property
and
the
Lachine
property,
if
you
could
not
proceed
with
building
a
shopping
centre?
A.
We
did
have
a
contingency
plan,
we
were
very
positive
in
thinking
we
could
build
shopping
centres
in
both
of
them.
Q.
And
if
something
happened
that
you
couldn’t,
what
would
be
.
.
.
(interrupted)
A.
We
assumed
we
could
get
our
moneys
back
for
it
because
we
felt
we
were
getting
proper
prices,
and
in
fact
the
De
Salaberry,
I
think
we
did
try
to
get
our
money
back.
Mr
Ciaccia,
“house
solicitor’
for
Steinberg’s
Limited
and
Ivanhoe,
testified
as
follows:
Q.
Prior
to
the
acquisition
of
the
RCAF
property
in
Lachine
in
June
or
July
1962,
with
respect
to
other
properties
in
which
you
were
interested
on
behalf
of
Ivanhoe
concerning
the
zoning
thereof,
had
there
been
any
insurmountable
obstacles
in
obtaining
the
appropriate
zoning
for
the
construction
of
the
shopping
centre,
in
your
experience?
A.
Well,
with
the
property
that
I
had
been
involved
with,
some
were
more
difficult
than
others,
but
I
had
not
encountered
myself
any
insurmountable
obstacles.
The
testimony
of
Mr
Goldfarb,
Vice-President
of
Development
and
general
manager
of
Ivanhoe,
contains
the
following
passages
with
reference
to
this
question:
.
.
«
TO
answer
your
question
as
to
whether
this
was
prudent,
this
was
modus
operandi,
we
had
done
that
many
times
prior
to
this,
and
we
were
successful
I
would
say
in
ninety-five
per
cent
(95%)
of
the
time,
if
I
refer
back
to
our
first
shopping
centre
in
Dorval
which
is
at
the
Dorval
Circle
if
you
recall,
that
land
was
also
zoned
residential,
it
was
unzoned,
and
by
representations
to
the
City
Council
they
changed
the
zoning
to
permit
a
shopping
centre.
I
did
the
same
thing
in
Ste.
Foy,
Quebec
where
it
was
totally
unzoned
too,
a
piece
of
land,
we
went
up
there
and
talked
with
the
City
Council
because
it
was
in
the
best
interest
of
the
City
Council
to
give
a
permit
at
that
time
to
get
a
major
development
for
purposes
of
taxes
and
so
on,
so
therefore
in
our
part,
we
went
by
past
experience
that
we
felt
that
we
could
get
zoning,
it
was
based
on
other
previous
experience
that
we
had,
because
again
I
repeat,
there
was
no
zoning
at
that
time
and
therefore
Councils
were
now
considering
the
granting
of
zoning
or
permits
of
shopping
centres,
because
one
thing
that
we
did
for
them,
we
took
automobiles
off
the
street
and
put
them
in
our
private
parking
lot,
where
we
cleaned
the
snow
and
we
lit
and
we
did
everything,
so
up
io
that
point
we
had
no
trouble.
Q.
So
you
were
taking
calculated
risks?
A.
Yes,
but
the
calculation
was
about
ninety-five
per
cent
(95%),
based
on
past
experience
good.
Q.
Isn’t
it
fair
to
say
that
you
were
taking
a
chance
of
being
able
to
build
a
shopping
centre
and
if
you
could
not
build
on
account
of
zoning
or
whether,
or
this
or
that,
then
you
would
sell?
A.
That
is
a
fair
assumption,
but
I
would
like
to
point
out
to
you
that
a
lot
of
the
land
that
we
bought
because
it
was
a
land
assembly
or
because
it
was
one
major
block,
we
paid
more
than
the
market
value
and
when
you
say
take
a
chance
about
selling
off,
we
certainly
took
a
big
chance
because
if
we
disposed
of
it
especially
on
a
subdivision
basis,
you
would
lose
one-third
(
/3)
of
your
land
that
you
have
to
give
up
for
streets
and
for
parks
and
things
like
that,
and
we
paid
at
that
time
what
I!
considered
to
be
a
very,
very
high
price.
The
foregoing
testimony
is
perhaps
somewhat
equivocal
as
to
whether
the
controlling
interests
of
the
appellant
considered
as
an
operating
motive
at
the
time
of
purchase
the
possibility
that
they
might
not
be
able
to
obtain
the
necessary
rezoning
and
would
have
to
dispose
of
the
properties,
and
opinions
might
well
differ
as
to
the
conclusion
that
should
be
drawn
from
it,
but
it
does
not,
in
my
opinion,
warrant
the
conclusion
that
the
trial
judge
was
clearly
wrong
in
the
inference
he
drew
as
to
secondary
intention,
particularly
having
regard
to
the
fact
that
he
had
the
advantage
of
seeing
the
witnesses.
The
possibility
or
risk
of
frustration
is,
of
course,
one
thing,
and
the
question
of
whether
the
purchaser
contemplated
such
possibility
or
risk
as
an
operating
motive
is
another
thing,
but
I
am
unable
to
conclude
on
the
basis
of
the
evidence
in
this
case
that
the
trial
judge
was
clearly
in
error
in
finding
that
the
appellant
must
necessarily
have
reckoned
with
the
possibility
of
such
frustration
and
the
necessity
of
resale.
I
turn
now
to
the
evidence
of
the
previous
sales
of
surplus
land
by
the
Cemp
and
Ivanhoe
groups,
and
the
inference
to
be
drawn
from
it
as
to
the
intention
of
the
appellant
at
the
time
of
purchasing
the
De
Salaberry
and
Lachine
properties.
The
appellant
did
not
quarrel
with
the
proposition,
to
which
the
trial
judge
devoted
the
greater
part
of
his
judgment,
that
the
appellant’s
intention
must
be
considered
in
the
light
of
the
previous
course
of
conduct
of
the
controlling
companies
with
respect
to
land
acquired
for
shopping
centre
development.
Indeed,
it
invoked
that
course
of
conduct,
tending
to
emphasize
the
role
of
Cemp
rather
than
that
of
Ivanhoe,
as
indicating
a
dominant,
well-
established
pattern
of
purchase
for
investment
purposes.
The
respondent
placed
the
emphasis
on
the
role
of
Ivanhoe,
as
indicating
a
greater
involvement
in
the
sale
from
time
to
time
of
surplus
land.
Cemp
and
Ivanhoe
were
equal
partners
in
the
appellant
and
equal
weight
ought,
in
principle,
to
be
given
to
their
respective
contributions
to
what
must
be
held
to
be
its
corporate
intention.
The
fact
that
the
Cemp
organization
was
to
assume
the
leading
role
in
the
development
and
management
of
the
shopping
centres
is
not
a
reason,
in
my
opinion,
to
give
anything
but
equal
weight
to
the
background
and
course
of
conduct
of
Ivanhoe
in
attempting
to
determine
the
intention
with
which
the
properties
were
purchased.
It
was
the
Steinberg-Ivanhoe
organization
that
played
the
leading
role
in
the
selection
and
acquisition
of
the
sites.
It
was
the
Steinberg’s
research
department
that
made
the
market
surveys
that
determined
the
selection
of
the
sites,
and
it
was
the
Ivanhoe
organization
that
negotiated
their
acquisition.
The
evidence
shows
that
both
the
Cemp
and
Ivanhoe
groups
had
made
sales
from
time
to
time
of
vacant
land
that
had
been
acquired
for
shopping
centre
development.
Ivanhoe,
in
particular,
purchased
land
in
anticipation
of
development
needs
and
acquired
what
amounted
to
an
inventory
of
land
for
shopping
centre
sites
or
other
suitable
locations
for
Steinberg’s
stores.
This
pattern
of
conduct
on
the
part
of
Ivanhoe
was
also
noted
in
the
case
of
Wilderton
Shopping
Centre
Inc
v
MNR,
[1972]
CTC
319;
72
DTC
6277,
where
Heald,
J,
then
of
the
Trial
Division
of
this
Court,
said
[at
p
323
[6280]]:
The
evidence
was
that
it
would
“pool”
land
far
in
advance
of
possible
use;
that
it
might
buy
three
potential
locations
in
one
general
area
and
then
only
use
one
site
for
a
shopping
centre,
selling
the
other
two.
There
was
evidence
in
the
present
case
of
several
sales
of
surplus
land
at
a
profit
by
Ivanhoe
during
the
years
1962
to
1966,
although
the
evidence
did
not
clearly
indicate
the
extent
to
which
such
sales
related
to
shopping
centre
sites,
as
distinct
from
other
sites
for
the
location
of
Steinberg’s
stores.
In
the
case
of
the
Cemp
group,
most
of
the
sales
of
surplus
land
involved
ten
of
sixteen
sites
for
shopping
centres
that
had
been
acquired
from
a
shopping
centre
developer
for
some
$17
million.
The
developer
was
in
financial
difficulties
and
was
obliged
to
sell
a
large
number
of
sites.
Cemp
had
to
defer
development
of
several
of
the
sites
because
it
did
not
have
the
resources
to
develop
all
of
them
at
the
same
time,
and
for
one
reason
or
another
it
gave
up
its
plans
for
development
of
ten
of
the
sites
and
sold
them,
in
all
but
one
case
at
a
loss.
In
some
cases
its
plans
were
frustrated
by
failure
to
obtain
suitable
zoning.
There
was
also
evidence
of
other
sales
of
surplus
land
by
the
Cemp
group,
in
some
cases
at
a
profit.
The
findings
of
the
trial
judge
with
references
to
previous
sales
of
surplus
land
by
the
controlling
interests
of
the
appellant
are
reflected
in
the
following
passages
of
his
judgment:
Though
there
may
be
only
one
or
two
purchases,
the
area
being
large,
too
big
for
the
needs,
there
are
many
sales
mad
by
the
sub-subsidiaries,
sister-companies
of
the
appellant;
in
fact,
it
is
in
evidence
that
the
two
parent-companies,
Cemp
Holdings
Ltd
and
Ivanhoe
Corporation
are
often
approached
by
people
wanting
to
buy
land
though
no
advertisement
is
made
by
them.
I
deduce
that
it
has
to
be
known
that
their
subsidiaries
have
excess
land
and
that
they
are
willing
to
sell.
.
.
.
By
purchasing,
even
if
forced
to,
more
land
than
reasonably
required,
it
is
evident
that
the
appellant,
like
the
group,
has
the
intention
to
sell
the
excess
which
is
of
no
other
use.
It
is
inventory
for
the
appellant.
.
..
.
.
.
Each
of
these
sister-companies
has
the
same
general
objects
and
its
business
is
essentially
similar.
Each
one
buys
and
sells
land.
If
one
is
isolated
from
its
sister-companies
there
is
only
one
or
two
purchases
and
a
few
more
sales.
When
they
are
reunited,
then
their
dealings
are
impressive
and
indicate
that
their
business
includes
buying
and
selling
in
the
ordinary
course
of
events.
As
the
foregoing
passages
indicate,
the
trial
judge
appears
to
have
concluded
that,
in
the
present
case,
the
appellant
purchased
more
land
than
it
required
for
the
contemplated
shopping
centres.
In
my
opinion,
the
evidence
does
not
clearly
support
this
conclusion
but
rather
points
to
the
conclusion
that
the
area
of
the
De
Salaberry
and
Lachine
properties
was
approximately
what
was
required
for
regional
shopping
centres,
having
regard
to
the
proportion
of
the
land
required
for
parking
purposes.
This
does
not
alter
the
fact,
however,
that
there
is
evidence
of
sales
of
surplus
land
in
the
past
by
the
controlling
interests
of
the
appellant
which
afford
a
relevant
basis
from
which
an
inference
may
be
drawn
as
to
the
probable
intention
of
the
appellant
at
the
time
of
purchase.
While
opinions
might
well
differ
as
to
the
weight
which
should
be
given
to
this
evidence,
I
am
unable
to
conclude
that
the
trial
judge
was
clearly
wrong
in
the
inference
that
he
drew
from
it.
No
one
denies
that
the
dominant
character
of
the
pattern
of
conduct
of
the
controlling
interests
of
the
appellant
was
the
acquisition
of
land
for
the
development
of
shopping
centres
to
be
held
for
investment
purposes.
What
the
trial
judge
appears
to
have
concluded,
however,
is
that
inherent
in
such
course
of
conduct
was
the
necessity
from
time
to
time
to
dispose
of
land
which
for
one
reason
or
another
turned
out
to
be
surplus,
and
that
this
possibility
must
have
been
present
to
the
minds
of
the
purchasers
as
a
motivating
consideration
at
the
time
of
purchase.
It
cannot
be
said
that
this
conclusion
is
clearly
without
support
in
the
evidence.
For
all
of
these
reasons,
I
would
dismiss
the
appeal.
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