Gibson, J:
1 These appeals were heard seriatim, and certain of the evidence by agreement was common to both.
2 The appeals in both cases are from reassessments for the taxation years 1958 and 1959 of each of the appellants.
3 The appeals are in respect to the gains over cost, categorized by the respondent as income, arising out of the purchases and sales of shares of the capital stock of New Mylamaque Explorations (New Mylamaque) Limited.
4 The appeals in respect to the gains over cost categorized as income by the respondent made by the appellants in respect to shares of the capital stock of Kirk-Hudson Mines Ltd (now known as Northgate Mines Limited), the appellants abandoned at this hearing.
5 In the case of the appellant Armstrong for 1958, the sum alleged to be income by the pleadings in respect to the subject matter is $13,116.01; but the notice of reassessment dated November 8, 1961 does not reflect this sum; and for 1959 the sum by the pleadings is $48,905.72, but the notice of reassessment also dated November 8, 1961 states the sum to be $41,255.72.
6 In the case of the appellant Fasken, both notices of reassessments are dated May 8, 1961, in respect to the subject matter, and for 1958 the sum alleged to be income by the pleadings is $8,040.04 but the notice of reassessment does not reflect this sum; and for 1959 the sum by the pleadings is $41,722.74 which corresponds with the figure in the notice of reassessment.
7 By the reply dated August 23, 1966, in the Armstrong case, the respondent in relation to New Mylamaque shares, pleaded at paragraph 2 the assumptions in making the reassessment at subparagraphs (a) to (f). By the amended reply, amended October 1, 1970, the respondent pleaded that he acted in making the reassessment not only upon the said assumptions set out in subparagraphs (a) to (f) of paragraph 2, but also the assumptions set out in new paragraph 2A(a) to (t).
8 By the reply dated December 30, 1964, in the Fasken case, the respondent in relation to New Mylamaque shares pleaded at paragraph 9(a) to (f) the assumptions in making the said reassessment. By the amended reply, amended October 1, 1960, the respondent pleaded that he acted in making the reassessment not only upon the said assumptions set out in paragraph 9(a) to (f), but also the assumptions set out in new paragraph 9A(a) to (r).
9 There was a large volume of documents put in evidence, and viva voce evidence was given by both appellants and one other witness called by the appellants.
10 On the whole of the evidence, it was established that neither of the appellants took part in any of the underwritings of New Mylamaque, or in any stock distribution of this company; that they purchased on their own account the shares of this company because of the uranium find at Laird Lake in Saskatchewan, in the expectation that it would be part of a successful mine in the future; and that subsequently they became disenchanted with the management of New Mylamaque and sold their shares. The parts that the appellants (the appellant Arm strong acted as solicitor) took in assisting P J Hughes, a promoter, in his activities, were done as agents for him and not beneficially in any way for themselves.
11 Specifically, on the whole of the evidence, in the case of Armstrong, it was established that the assumptions of the respondent in paragraph 2A(b), (c), (e), (k), (l), (m), (n) and (o) of the amended reply were incorrect.
12 Specifically also, on the whole of the evidence, in the case of Fasken, it was established that the assumptions in paragraph 9A(b), (c), (e), (k), (l), (m), (n) and (o) of the amended reply are incorrect.
13 Reference was made to the following cases: Foreign Power Securities Corporation Ltd v Minister of National Revenue, [1966] Ex. C.R. 358, [1966] C.T.C. 23, 66 D.T.C. 5012; Irrigation Industries Ltd v Minister of National Revenue, [1962] C.T.C. 215, 62 D.T.C. 1131 (SCC); Gairdner Securities Ltd v Minister of National Revenue, [1952] C.T.C. 371, 52 D.T.C. 1171 (Exch); [1954[ CTC 24;54 D.T.C. 1015 (SCC); Osler, Hammond & Nanton Limited v Minister of National Revenue, [1961] C.T.C. 462, 61 D.T.C. 1291 (Exch);[1963] C.T.C. 164, 63 D.T.C. 1119 (SCC); Norman R Whittall v Minister of National Revenue, [1964] C.T.C. 417, 64 D.T.C. 5266 (Exch);[1967] C.T.C. 377, 67 D.T.C. 5264 (SCC); Tara Exploration and Development Company Limited v Minister of National Revenue, [1970] C.T.C. 557, 70 D.T.C. 6370 (Exch);[1972] C.T.C. 328, 72 D.T.C. 6288 (SCC); John Cragg v Minister of National Revenue, [1951] C.T.C. 322, 52 D.T.C. 1004 (Exch); J S Irwin v Minister of National Revenue, [1962] C.T.C. 572, 62 D.T.C. 1356 (Exch);[1964] C.T.C. 362, 64 D.T.C. 5227 (SCC); Les Placements Bourg-Royal Inc v The Queen, [1974] C.T.C. 362, 74 D.T.C. 6269 (FCTD); A B Davidson v Minister of National Revenue, [1963] C.T.C. 240, 63 D.T.C. 1154 (Exch); Wellington Hotel Holdings Ltd v Minister of National Revenue, [1973] C.T.C. 473, 73 D.T.C. 5391 (FCTD); Reicher et al v Minister of National Revenue, [1974] C.T.C. 2131, 74 D.T.C. 1098 (TRB);[1975] C.T.C. 178, 75 D.T.C. 5050 (FCTD); Marcus v The Queen, [1974] C.T.C. 435, 74 D.T.C. 6346 (FCTD); D C McDonald v The Queen, [1974] C.T.C. 836, 74 D.T.C. 6644 (FCA).
14 In the result, the appellants' acquisitions of shares in New Mylamaque shares were investments, not inventory for trading, and the transactions in such shares were not adventures in the nature of trade as judicially defined; and the gains arising out of their purchases and sales of such shares were not income within the meaning of the Income Tax Act as it read in the taxation years 1958 and 1959.
15 In the result also, in the case of the appellant Armstrong, in relation to the gain in respect to transactions in shares of Kirk-Hudson Mines Ltd, the amount that is income within the meaning of the said Income Tax Act is $3,285.78 and in the case of the appellant Fasken is $3,285.78.
16 The reassessments are referred back for further reassessment not inconsistent with these Reasons.
17 Success being divided, and it being impractical to divide with any precision the work done in these proceedings to bring about this result, the appellants are entitled to one-half of taxable party and party costs.
18 Either party may prepare in both official languages an appropriate judgment to implement the foregoing conclusions and may move for judgment.
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