Roland
St-Onge:—This
appeal,
heard
at
Victoria,
British
Columbia
on
November
5,
1971
by
the
Tax
Appeal
Board
as
it
was
then
constituted,
concerns
the
1967
taxation
year.
In
1965
the
appellant,
a
practising
lawyer
in
Nanaimo,
BC,
together
with
two
other
persons,
purchased
an
apartment
building
consisting
of
five
rental
units
known
as
Glenayr
Apartments
Limited
in
the
Departure
Bay
area
adjacent
to
the
City
of
Nanaimo.
After
approximately
two
years
of
ownership
they
sold
the
property
in
1968
for
$600,000.
The
appellant
contended
that
the
property
was
purchased
for
investment
purposes
and,
consequently,
his
portion
of
the
gain
of
$5,850.45,
an
amount
of
$1,950.15,
was
a
fortuitous
non-taxable
capital
gain.
At
the
hearing,
the
evidence
disclosed
that
prior
to
and
after
the
transaction
under
review
the
appellant
entered
into
all
kinds
of
real
estate
transactions
—
buying
income-producing
properties
as
well
as
raw
lands
for
subdivision
purposes,
either
alone
or
in
association
with
a
firm
of
real
estate
agents.
Mr
Maclsaac
testified
that,
although
he
had
purchased
and
sold
properties
during
his
23
years
of
practice
as
a
lawyer,
he
had
never
taken
any
income
from
these
transactions
as
he
was
keeping
it
for
the
time
when
he
would
retire,
and
he
contended
that
he
should
not
be
taxed
on
these
profits.
He
stated
that
when
he
purchased
properties
with
his
associates,
Jim
Goodwin,
an
accountant,
and
Bill
Ney,
a
real
estate
dealer
carrying
on
a
real
estate
business
under
the
name
of
Nanaimo
Realty
Limited,
he
relied
entirely
on
them.
After
explaining
all
the
transactions
which
he
had
entered
into
alone,
he
testified
as
follows:
Q.
These
were
things
that
you
bought
yourself
as
opposed
to
buying
with
Messrs
Goodwin
and
Ney?
A.
Yes.
Q.
And
these
several
other
apartments,
Nob
Hill
Apartments
and
Millstream
Manor,
these
are
both
properties
held
with
Messrs
Goodwin
and
Ney?
A.
Yes.
Q.
Still
held?
A.
Yes.
Q.
Have
you
other
investments,
let
us
say
other
properties
that
you
hold
with
them?
A.
I
am
not
sure
but
I
think
that
there
has
been
an
acquisition
of
another
apartment
building,
but
I
am
not
sure
though.
Q.
Yes,
it
was
the
building
that
you
all
acquired
following
the
saie
of
Glen-
ayr.
A.
Yes.
Q.
And
the
Nob
Hill
Apartments
and
Millstream,
again
were
they
acquired
by
Messrs
Ney
and
Goodwin
including
you
as
a
participant,
acquired
by
them
as
a
result
of
their
own
decisions?
A.
Yes.
They
had
done
everything,
of
course,
you
know,
they
had
run
the
whole
thing
satisfactorily,
and
it
gave
me
something
to
put
in
my
Income
Tax
Return
every
year.
Q.
You
leave
it
to
them?
A.
Completely.
Q.
If
Messrs
Ney
and/or
Goodwin
were
to
wish
to
decide
today
to
buy
an
apartment
would
they
phone
you
and
ask
you
if
you
wanted
a
part
of
it?
A.
Oh,
I
think
so
now
because
the
bloom
is
off
the
rose.
Q.
Well,
would
they
have
looking
back
say
to
1965?
A.
I
don’t
know.
Goodwin
is
such
a
good
friend
of
mine
that
he
figures
that
he
is
sort
of
like
my
father,
that
if
he
buys
something
he
is
looking
after
my
interest,
and
he
really
believes
this,
and
I
believe
that
if
he
made
a
bad
deal
he
would
be
prepared
to
be
bawled
out
about
it
by
me,
but
he
is
not
worrying,
he
has
no
legal
power
of
attorney,
but
he
did
it;
he
just
brings
around
the
papers
for
me
to
Sign.
Q.
Looking
back
to
1965,
1966,
1967,
you
had
confidence
in
the
judgment
of
Mr
Goodwin
to
buy
something
and
if
you
thought
it
should
not
be
kept,
well,
that
was
fine
with
him.
A.
Yes.
Q.
There
was
no
discussion
about
the
sale
of
land
there,
you
didn’t
go
out
and
say,
“Look,
we
are
having
problems,
or
financial
resources
are
not
satisfactory”,
or
anything
like
that?
A.
Could
have
been,
but
I
don’t
remember.
You
see,
he
and
Ney
are
running
the
real
estate
business,
and
of
course
I
believe
that
they
consider
this
from
their
standpoint
a
taxable
thing
because
they
are
in
business,
but
certainly
I
don’t
go
into
it.
Q.
I
understand
that
neither
of
them
contested
the
fact
of
going
in
.
.
.
A.
No,
they
feel
that
this
is
their
line
of
work.
Q.
They
are
real
estate
businessmen
and
traders,
so
that
is
their
line
of
work.
A.
They
are
quite
satisfied
that
they
are
taxable.
Q.
Your
thought
is
that
your
destiny
should
not
be
classified
with
them?
A.
That
is
right,
and
they
also
think
so.
There
is
no
need
to
give
the
details
of
each
transaction
in
which
the
appellant
was
involved
either
alone
or
in.
association
with
others
because
their
nature
and
number
are
sufficient
to
brand
him
as
a
trader
in
real
estate.
In
addition,
the
short
length
of
time
he
held
the
property
under
review
as
well
as
his
association
with
real
estate
agents
for
the
realization
of
profit
are
more
than
enough
to
rule
that
his
portion
of
the
gain
is
not
a
capital
gain
but
a
taxable
income
in
accordance
with
sections
3
and
4
and
paragraph
(e)
of
subsection
(1)
of
section
139
of
the
Income
Tax
Act.
For
the
above
reasons
the
appeal
is
dismissed.
Appeal
dismissed.
Email this Content