A
W
Prociuk
(orally):—1
will
now
give
my
decision
in
the
Sinanan
case,
as
well
as
the
cases
of
Rasmussen,
Reynolds,
Fearman
and
Debicki.
The
appellant,
a
medical
doctor
and
resident
of
Vancouver,
British
Columbia,
in
conjunction
with
several
other
Vancouver
residents,
formed
a
syndicate
in
the
spring
of
1967
to
purchase
real
estate
in
the
said
city
and
to
construct
an
apartment
building
thereon.
The
percentage
interest
of
each
participant
depended
upon
the
amount
of
contribution
to
the
project.
The
apartment
block,
known
as
the
Admiral
Nelson,
was
constructed
in
the
first
part
of
1968
and
sold
in
August
of
that
year
when
nearly
completed
at
a
profit
amounting
to
approximately
100
per
cent
of
each
respective
contribution.
The
respondent,
by
Notice
of
Reassessment
dated
July
26,
1972,
added
the
appellant’s
net
gain
on
the
sale
of
the
Admiral
Nelson
to
the
1968
income
on
the
ground
that
this
was
an
adventure
in
the
nature
of
trade,
and
assessed
accordingly.
From
this
assessment
the
appellant
appeals.
At
the
commencement
of
this
hearing
the
parties
agreed
that
evidence
adduced
in
this
appeal
would
apply
to
the
appeals
of
Harry
D
Reynolds,
Frederick
W
Fearman,
Raoul
Rasmussen
and
Anthony
Debicki,
some
of
the
other
members
of
the
said
syndicate.
At
least
two
other
members
prosecuted
their
appeals
separately
during
the
present
sittings.
The
appellant’s
evidence
is
that
on
the
advice
of
his
accountants
he
joined
the
syndicate
primarily
to
minimize
the
tax
burden
through
the
instrumentality
of
capital
cost
allowance
on
the
buildings
to
be
erected.
Other
members
would
appear
to
have
had
this
motive
as
well.
The
composition
of
the
syndicate
included
members
of
the
legal
and
medical
professions,
an
architect,
an
engineer,
businessmen
in
lumber
and
other
enterprises,
as
well
as
two
high-salaried
teachers.
When
the
building
was
nearing
completion
a
very
attractive
offer
was
received,
and
eventually
accepted
after
some
considerable
disagreement
as
to
the
advisability
of
the
sale.
The
appellant,
and
the
four
other
appellants.
named
in
my
opening
remarks,
held
45
per
cent
of
the
interest,
and
he
stated
that
they
were
unable
to
muster
any
more
to
their
side
to
prevent
the
sale.
They
then
agreed,
under
protest,
to
sell.
The
appellant,
in
answer
to
my
questions,
stated
that
no
actual
count
of
noses
occurred
to
determine
what
position
the
other
respective
members
took,
but
he
and
his
said
group
assumed
that
they
were
all
in
favour
of
the
sale.
It
will
be
noted
that
another
5.1
per
cent
would
have
effectively
blocked
the
sale.
I
am
satisfied
that
had
there
been
a
genuine
effort
to
resist
the
sale,
the
appellant,
who
himself
controlled
approximately
21
per
cent,
could
have,
with
little
difficulty
recruited
support
to
his
cause
at
least
an
additional
12.66
per
cent
held
by
two
other
members,
each
of
whom,
under
oath,
in
support
of
their
respective
appeals,
stated
that
they
vigorously
opposed
the
sale,
but
were
outnumbered.
if
I
am
to
believe
that
this
was
in
the
nature
of
a
long-term
investment,
it
is
strange
indeed
that
this
syndicate,
with
all-round
expertise,
had
not
reduced
whatever
understanding
they
had
into
writing,
with
the
usual
buy-sell
provisions,
and
other
very
important
provisions
such
as
relating
to
shares
of
deceased
members
of
the
syndicate
and
so
on,
the
project
being
worth
well
over
$1,000,000.
An
offer
which
within
a
year
yields
100
per
cent
return
is
indeed
difficult
to
resist
in
the
absence
of
built-in
enforceable
provisions.
Viewing
the
evidence
as
a
whole,
I
have
come
to
the
conclusion
that
the
profit
motive,
and
not
a
long-term
investment
of
these
young
men,
was
the
overriding
factor,
and
accordingly
this
was
an
adventure
in
the
nature
of
trade.
The
appeal
is
dismissed.
Similarly,
in
the
appeals
of
Reynolds,
Fearman,
Rasmussen
and
Debicki,
for
reasons
stated
in
the
Sinanan
appeal,
their
appeals
are
dismissed
as
well.
Appeals
dismissed.
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