CAMERON,
J.:—This
is
an
appeal
from
a
decision
of
the
Tax
Appeal
Board
dated
April
5,1962
(29
Tax
A.B.C.
65),
dismissing
the
appellant’s
appeals
from
re-assessments
dated
April
25,
1960
and
made
upon
him
for
the
years
1955
to
1958
inclusive.
The
sole
question
in
the
appeal
is
whether
certain
profits
made
by
the
appellant
in
the
purchase
and
sale
in
1955
of
some
140
acres
of
land
in
the
Municipality
of
Surrey,
British
Columbia
(and
which
I
shall
refer
to
as
the
Surrey
property)
are
taxable
profits
or
whether,
as
the
appellant
contends,
they
are
capital
appreciations.
In
his
tax
returns,
the
appellant
did
not
include
any
portion
of
the
said
profits
as
taxable
income.
In
re-assessing
the
appellant,
however,
the
Minister
took
into
consideration
the
fact
that
the
property
had
been
purchased
for
$45,000,
that
expenses
of
$2,568.74
had
been
incurred
in
the
purchase
and
sale
of
the
property
;
that
it
was
sold
for
$170,000
under
an
agreement
of
sale
which
provided
for
payments
over
a
number
of
years
and
that,
accordingly,
the
provisions
of
paragraphs
(b),
(d)
and
(e)
of
Section
85B(1)
of
the
Income
Tax
Act
relating
to
Special
Reserves,
were
applicable;
and
added
to
the
declared
income
of
the
appellant
the
amount
of
profits
so
computed.
It
was
agreed
that
the
amounts
so
added
had
been
properly
computed
and
there
remains
only
the
question
as
to
whether
such
gains
are
taxable.
In
the
tax
returns,
the
appellant
stated
that
he
is
an
agrologist
and
appraiser.
After
receiving
the
degree
of
B.S.A.
from
the
University
of
Saskatchewan
in
1942,
he
served
in
the
armed
forces
until
1946.
Following
his
discharge,
he
started
a
farming
operation
in
Northern
Alberta
but
abandoned
it
in
that
year
and
moved
to
British
Columbia
where
he
entered
the
Civil
Service
of
Canada
as
a
regional
counsel
under
the
Soldier
Settlement
Act
and
the
Veterans’
Land
Act.
In
1947,
he
was
appointed
regional
supervisor,
continuing
as
a
full-time
employee
of
the
Department
of
Veterans’
Affairs
until
1956
when
he
resigned
to
go
into
business
on
his
own
account.
In
1953,
when
he
was
living
at
Burnaby,
he
purchased
a
farm
property
consisting
of
some
58
acres
at
Clearbrook,
west
of
Abbotsford
on
the
Trans-Canada
Highway,
and
shortly
thereafter
took
up
residence
there.
This
farm
I
shall
refer
to
as
the
Clearbrook
property.
On
May
24,
1955,
he
entered
into
the
agreement
filed
as
Exhibits
2
and
3
regarding
the
purchase
of
the
140
acre
Surrey
property
from
the
owner,
J.
A.
Winter,
for
$45,000.
The
agreement
(Exhibit
2)
provides
for
the
sale
of
three
parcels,
the
total
price
being
$43,000,
of
which
$500
was
paid
on
that
date
to
the
vendor,
$2,000
was
paid
to
the
solicitor
and
the
balance
of
$39,000
was
to
be
paid
not
later
than
October
31,1955,
or
the
cash
payments
were
to
be
forfeited
to
the
vendor.
By
the
terms
of
Exhibit
3
he
was
also
given
the
first
right
to
purchase
a
further
adjacent
parcel
for
$3,500.
On
July
21,
1955,
he
secured
conveyances
of
the
property
(or
most
of
it)
and
of
the
total
cost,
$30,000
was
borrowed
from
the
Bank
of
Montreal
at
New
Westminster
and
$15,000
was
borrowed
from
private
sources.
On
September
20,
1955,
a
friend
introduced
him
to
one
Peter
Barnes
who
offered
to
purchase
the
entire
property
for
$170,000.
On
the
same
day,
he
entered
into
an
agreement
of
sale
with
Barnes
to
sell
en
bloc
at
that
price,
the
terms
of
sale
providing
that
$5,000
be
paid
in
cash,
$25,000
on
July
1,
1956,
and
$35,000
on
the
first
day
of
September
in
each
of
the
years
1957,
1958,
1959
and
1960.
The
appellant
gave
evidence,
but
no
other
witness
was
called
on
his
behalf.
He
stated
that
as
he
was
brought
up
on
a
farm
he
had
always
wanted
to
acquire,
live
on
and
operate
a
farm
and
that
it
was
for
that
purpose
that
he
acquired
the
Clearbrook
property
in
1953.
Shortly
after
he
moved
there
in
1954,
he
noticed
that
surveyors’
pegs
were
placed
across
his
property,
indicating
the
possibility
that
the
Department
of
Highways
was
preparing
to
construct
a
new
road.
From
inquiries
made,
he
came
to
the
conclusion
that
there
was
a
strong
likelihood
that
part
of
his
property
would
be
expropriated
for
that
purpose;
that
it
would
seriously
interfere
with
his
farm
operations
and
that
the
road
might
be
very
close
to
his
residence;
and
that
if
constructed
it
might
sever
his
property
and
create
a
serious
difficulty
in
reaching
some
portions
of
it.
He
could
get
no
definite
information
as
to
just
when
or
where
such
a
road
might
be
built.
In
fact,
it
was
not
until
1958
that
he
did
sell
a
part
of
that
property
for
that
purpose,
and
later
he
sold
the
rest
of
the
Clearbrook
farm
at
a
very
substantial
profit.
He
and
his
family
now
reside
on
a
2,500
acre
farm,
or
ranch,
in
the
Penticton
area.
Faced
with
the
possibility
of
an
expropriation
of
part
of
his
property
for
a
road
and
the
difficulties
that
might
follow,
he
says
he
began
to
look
around
for
a
substitute
farm
which
would
be
available
if
his
own
property
were
so
taken.
He
made
a
number
of
inspections
of
other
farms
and
in
May,
1955
decided
to
purchase
the
Surrey
property.
His
sole
intention,
he
says,
was
to
use
it
as
a
farm
where
he
could
take
up
residence
with
his
family.
Only
ten
acres
were
cleared,
the
rest
being
brushwood
or
timber.
The
soil,
he
said,
was
suitable,
if
cleared,
for
agricultural
purposes.
There
was
no
residence
on
the
property
purchased,
but
the
vendor,
it
is
stated,
assured
him
that
he
would
be
given
the
first
option
to
buy
the
residence
property
which
he
had
retained.
In
fact,
the
appellant
some
years
later
did
acquire
it
and
sold
it
at
a
profit.
He
says
that
he
planned
to
construct
a
house
on
the
property
if
he
could
not
buy
the
existing
one.
When
he
bought
the
Surrey
property,
he
said
he
had
no
intention
whatever
of
selling.
He
points
out
that
he
did
not
advertise
or
list
it
for
sale
or
seek
out
buyers;
and
that
he
did
not
previously
know
Barnes,
the
purchaser,
who
was
brought
to
him
by
a
friend.
As
evidence
of
his
intention
to
work
the
property
as
a
farm,
he
says
that
in
the
summer
of
1955
he
cut
the
hay
thereon
with
a
tractor-mower
brought
from
Clearbrook,
but
I
consider
that
to
be
of
no
importance
as
it
was
a
very
small
operation
and
the
machinery
was
returned
to
Clearbrook.
Nothing
else
was
done
on
the
property
prior
to
sale.
There
is
other
evidence,
however,
which
establishes
quite
clearly
that
even
before
he
purchased,
he
was
fully
aware
of
the
potentialities
of
the
property
for
subdivision
and
sale,
or
sale
en
bloc,
at
an
early
date
and
that
there
was
an
active
and
increasing
demand
for
building
lots
in
the
area.
While
it
was
zoned
as
farm
property,
there
were
a
substantial
number
of
houses
constructed
in
the
immediate
vicinity,
many
of
them
under
the
Veterans’
Land
Act.
His
chief
problem
was
that
of
financing
the
purchase
of
the
property.
Accordingly,
he
approached
Mr.
Byrom,
manager
of
a
branch
of
the
Bank
of
Montreal
in
New
Westminster
who
was
known
to
him,
and
asked
for
a
loan
of
$50,000
in
addition
to
some
$1,650
that
he
already
owed
that
bank.
Mr.
Byrom
was
called
as
a
witness
on
behalf
of
the
respondent
and
identified
Exhibit
A
dated
May
12,
1955
(i.e.,
prior
to
the
purchase
of
the
property)
as
the
application
for
a
loan
which
he
prepared
at
the
request
of
and
from
information
supplied
by
the
appellant
and
then
sent
to
the
bank’s
assistant
general
manager
at
Vancouver,
it
being
beyond
his
powers
as
local
manager
to
grant
a
loan
of
that
nature
and
amount.
After
stating
that
the
loan
would
be
payable
on
demand
and
would
be
repaid
from
sale
of
lots
within
one
year,
the
report
reads:
“Mr.
Grant,
Regional
Supervisor
for
the
Veterans
Land
Act
has
the
opportunity
to
purchase
120
acres
of
land
@
$875.
an
acre
and
has
requested
our
assistance
for
a
non-revolving
advance
of
$50,000.
The
land
is
situated
114
miles
from
Whalley,
B.C.
on
the
Ferguson
road
and
at
present
belongs
to
an
estate,
beneficiaries
being
residents
of
the
United
States
of
America
who
are
anxious
to
obtain
and
immediate
wind
up
the
estate.
A
portion
of
the
land
is
cleared
with
the
the
remainder
covered
with
scrub
brush.
The
adjacent
property
is
cleared
with
a
large
number
of
the
lots
sold
and
houses
built
or
being
constructed
under
N.H.A.
The
property
in
question
is
serviced
for
water
by
the
Greater
Vancouver
Water
District
and
it
is
Mr.
Grant’s
intention
to
gradually
sub-divide
the
property
into
466
lots
of
which
57
sites
are
immediately
available.
A
breakdown
of
the
anticipated
expenses
for
servicing
the
lots
is
attached.
Real
estate
firms
value
the
land
in
the
area
at
$1,750
an
acre
and
there
is
a
parcel
of
80
acres
listed
for
$120,000.
Mr.
Grant
is
a
very
shrewd
appraiser
and
in
our
opinion
can
be
classified
as
one
of
the
leading
appraisers
in
Canada.
As
Regional
Supervisor
for
the
V.L.A.
it
is
his
duty
to
be
familiar
with
all
property
in
the
Valley
and
in
1949
in
the
line
of
his
duty
an
aerial
survey
was
made
of
this
particular
district
and
all
property
valued.
It
was
during
this
time
that
he
became
interested
in
the
property
and
made
his
intentions
known
to
the
owner
that
he
would
be
interested
in
the
purchase.
The
property
passed
to
the
estate
and
the
beneficaries
have
just
informed
Mr.
Grant
that
they
would
be
interested
in
a
quick
cash
sale.
Financial
position
of
Mr.
Grant
is
approximately
the
same
as
outlined
in
our
form
516
of
the
21st
of
July
last
with
the
exception
that
he
informs
us
that
property
values
have
increased
from
the
purchase
price
of
$500.
an
acre
to
$1,500
an
acre
making
a
potential
sale
value
of
the
property
$87,000.
The
credit
requested
$45,000.
for
the
purchase
of
the
land
and
$5,000.
for
additional
expenses
clearing
etc.
will
be
repaid
from
sale
of
individual
lots
or
in
parcels
and
Mr.
Grant
is
confident
that
no
trouble
will
be
experienced.
The
purpose
of
the
request
for
accommodation
and
the
security
offered
is
not
a
normal
banking
proposition
and
is
a
definite
promotion
scheme
but
we
have
a
very
high
opinion
of
Mr.
Grant’s
ability
as
an
appraiser
and
we
are
satisfied
that
sale
of
sufficient
land
say
at
$800.
a
lot
would
be
made
to
repay
our
advances
within
one
year.
Last
year
Mr.
Grant
received
$5,000.
in
independent
appraisal
fees
which
was
used
for
farm
improvements.
He
also
informs
us
that
he
appraised
a
new
sub-division
on
Lula
Island
and
the
costs
of
development
were
in
accordance
to
his
estimates.
Without
disclosing
the
location
of
the
property
he
has
been
offered
outside
financing,
at
a
premium
but
does
not
wish
to
avail
himself
of
this
offer.
If
the
credit
is
granted
there
is
a
good
possibility
that
the
branch
will
derive
some
new
mortgage
business.
Application
recommended
and
a
reply
by
telephone
would
be
appreciated.’’
Attached
thereto
was
‘‘the
breakdown
of
the
anticipated
expenses
for
servicing
the
lots’’,
a
copy
of
which
was
filed
as
Exhibit
4.
This
was
prepared
by
the
appellant
personally
and
given
to
the
bank
manager
to
be
forwarded
with
the
report.
It
refers
to
four
parcels
in
which
there
would
be
a
total
of
486
lots;
the
lots
if
sold
at
$800
each
(after
allowing
for
sales
commissions,
roads
and
water,
taxes,
surveys,
legal
expenses
and
main
roads)
would
yield
a
profit
of
$234,838.
The
proposed
loan
was
not
then
granted
and
after
a
further
interview
with
the
appellant,
Byrom
again
asked
for
approval
of
the
loan
on
May
24,
1955
(Exhibit
A).
After
repeating
that
the
purpose
of
the
loan
for
$50,000
was
to
assist
in
purchasing
the
property
and
that
the
demand
loan,
if
granted,
would
be
repaid
from
the
sale
of
lots
within
one
year,
the
report
stated
:
A
recent
survey
of
the
proposed
purchase
of
120
acres
near
Whalley
B.C.
revealed,
we
are
informed,
that
there
appears
to
be
enough
cordwood,
poles
etc.
on
the
property
to
cover
the
costs
of
survey,
taxes,
etc.
without
any
additional
expense
to
Mr.
Grant.
He
also
informs
us
that
plans
are
on
the
drawing
boards
for
the
construction
of
a
new
highway
from
Peterson
Hill
direct
to
Abbotsford
which
would
indicate
that
it
will
cut
diagonally
across
this
property
and
would
require
100
of
the
466
lots.
The
Provincial
Government
purchases
land
at
the
going
market
price
and
have
in
the
past
obtained
appraisals
from
Mr.
Grant.
While
we
realize
that
the
proposition
is
speculative
and
not
attractive
from
a
Banking
point
of
view
we
have
every
confidence
in
Mr.
Grant’s
ability
to
valuate
the
potentiality
of
the
district
for
development
purposes.
Also
as
a
civil
servant
he
is
closely
associated
with
certain
department
of
the
Provincial
Government
and
in
this
way
is
in
a
position
to
obtain
information
as
to
proposed
new
highways.
We
have
been
informed
from
other
sources
that
it
is
the
intention
to
build
a
new
highway
direct
from
Peterson
Hill
to
Abbotsford
bypassing
Whalley,
therefore
it
would
appear
that
his
information
is
authenticate
[sic]
as
to
the
proposed
construction
but
could
be
problematical
as
to
the
actual
route
to
be
taken.
With
of
sites
available
almost
immediately
Mr.
Grant
is
confident
that
there
would
be
no
difficulty
in
disposing
of
them
at
around
$800.
a
lot
grossing
$45,600.
If
the
advance
is
granted
and
not
retired
within
one
year
Mr.
Grant
has
assured
us
that
he
would
obtain
outside
financing
at
any
time
the
Bank
requested
to
retire
outstanding
advances
and
as
we
consider
him
a
man
of
integrity,
held
in
high
esteem
by
his
employers,
we
have
no
reason
to
doubt
his
word.
He
has
again
mentioned
that
if
we
cannot
assist
him
he
will
be
forced
to
obtain
outside
financing
that
has
already
been
promised
at
a
premium.
Recommended
on
a
non-revolving
basis
for
a
period
of
one
year,
a
reply
by
telephone
would
be
appreciated.”
The
proposed
loan
was
not
approved.
However,
on
June
16,
1955,
the
manager,
after
a
further
discussion
with
the
appellant,
applied
for
a
new
loan
(Exhibit
A)
of
$40,000,
$30,000
of
which
was
to
complete
the
purchase
and
$10,000
for
development,
if
required.
It
states:
“With
reference
to
our
forms
516
of
the
12th
and
24th
of
May
we
apply
on
behalf
of
Mr.
Grant
for
a
Non-revolving
credit
of
$40,000.—$30.000.
for
the
purchase
of
120
acres
of
land
and
$10,000.
if
required
for
temporary
development.
The
cost
of
the
land
is
$40,000.
and
Mr.
Grant
has
already
paid
$2,000.
on
an
option
to
purchase
which
expires
on
the
end
of
this
month.
He
will
have
by
that
time
$8,000.
in
cash
from
undisclosed
sources
and
if
his
request
for
our
assistance
is
eranted
he
will
complete
the
purchase
and
lodge
title
with
us.
However
he
has
definitely
informed
us
that
he
is
going
ahead
with
the
purchase,
with
or
without
our
assistance
as
he
states
he
can
if
necessary
obtain
outside
support.
Your
Manager
accompanied
Mr.
Grant
on
a
tour
of
the
property
which
is
a
5
minute
drive
from
Whalley
shopping
centre
and
there
are
2
schools
close
by
which
also
lends
to
the
desirability
of
the
land
for
a
subdivision
and
when
developed
should
be
very
attractive.
Fraser
Valley
Lands
Ltd.
have
approached
Mr.
Grant
to
see
if
he
would
be
interested
in
selling
all
or
a
portion
of
the
land.
They
have
tentatively
offered
for
the
120
acres
$200,000
with
$50,000
down
and
the
balance
over
a
period
of
5
years
and
he
has
informed
them
that
he
is
interested
in
the
proposition
of
that
nature.
However
it
is
still
in
the
discussion
stage
and
may
take
a
week
or
two
before
final
decision
is
reached.
We
have
suggested
that
he
take
their
offer
and
be
satisfied
with
a
profit
of
$160,000.
spread
over
a
5
year
period.
However
the
option
to
purchase
expires
on
the
end
of
this
month
and
he
is
desirous
of
finalizing
arrangements
to
complete
the
purchase
of
the
property
in
event
the
sale
of
the
land
to
Fraser
Valley
Lands
Ltd.
is
held
up
or
does
not
materialize.
Therefore
he
has
again
applied
to
us
for
the
reduced
credit
for
a
period
of
not
more
than
one
year
with
the
security
as
outlined
in
the
panel
of
the
form.
Application
recommended
as
we
are
very
confident
that
Mr.
Grant
would
not
enter
into
this
obligation
if
he
were
not
satisfied
that
he
could
either
sell
the
property
outright,
or
by
piecemeal
if
necessary
and
retire
our
advance
within
the
period
of
one
year.”
In
the
result
a
bank
loan
of
$30,000
was
granted
about
June
30,
thus
enabling
the
appellant
to
complete
the
purchase
assisted
by
other
loans
privately
arranged.
Mr.
Byrom
was
a
careful
witness
and
after
refreshing
his
memory
by
referring
to
these
three
reports,
stated
that
the
data
contained
therein
came
entirely
from
the
appellant
(except
that
he
had
authenticated
from
other
sources
the
appellant’s
statement
as
to
the
possible
route
of
the
new
road
from
Peterson
Hill
to
Abbotsford)
and
that
at
no
time
did
the
appellant
state
or
suggest
to
him
that
he
planned
to
occupy
the
property
as
his
own
home.
I
accept
his
evidence
unreservedly.
In
general
the
appellant
did
not
disagree
with
Byrom’s
evidence,
although
he
said
he
could
not
recall
having
mentioned
one
or
two
items
in
the
reports,
but
would
not
deny
Byrom’s
statement
that
he
had,
in
fact,
done
so.
The
appellant,
however,
does
say
that
notwithstanding
the
information
given
to
Byrom
as
to
his
intentions
regarding
the
property,
he
had,
in
fact,
no
intention
of
disposing
of
it
at
any
time
until
Barnes
offered
him
$170,000,
an
offer
which
was
so
large
that
he
was
“staggered”
by
it
and
consequently
immediately
accepted
it
so
as
to
make
a
substantial
profit.
He
says
that
in
order
to
secure
the
bank
loan
it
was
necessary
to
satisfy
the
bank
authorities
that
the
loan
was
well
secured,
that
it
would
be
liquidated
within
one
year
and
that
the
property
he
wished
to
secure
was
of
such
a
nature
that,
if
the
bank
had
to
take
it
over,
it
could
readily
sell
the
property
in
lots
or
en
bloc
at
prices
much
in
excess
of
the
amount
of
the
loan.
While
he
had
made
no
definite
plans
for
re-paying
the
loan
within
one
year,
he
felt
he
could
rely
on
sources
other
than
the
sale
of
the
Surrey
lots.
There
was
a
strong
likelihood
that
part
of
the
Clearbrook
property
(in
which
he
had
an
equity
of
$21,000)
would
be
expropriated
and
through
that
and
the
sale
of
the
balance,
he
could
pay
off
the
loan.
Alternatively,
he
had
discussed
the
matter
with
his
father
who
had
agreed
to
and
could
advance
monies
to
pay
off
the
bank.
On
the
whole
of
the
evidence,
I
must
come
to
the
conclusion
that
the
appellant
has
failed
to
satisfy
me
that
his
intention
in
acquiring
the
property
was
to
secure
a
farm
which
he
would
occupy
and
operate
with
his
family
in
the
event
that
the
Clearbrook
property
was
expropriated.
His
evidence
on
the
point
is
entirely
uncorroborated.
On
the
other
hand,
his
intention
as
disclosed
to
Byrom
was
without
doubt
to
buy
the
land
for
speculative
purposes,
to
subdivide
and
develop
it
by
installing
facilities
and
to
sell
it
off
in
lots
or
en
bloc
as
soon
as
there
was
a
suitable
opportunity.
His
costs
of
development
and
his
estimate
of
potential
profits
were
carefully
worked
out
and
he
gave
assurances
to
the
bank
that
he
proposed
to
pay
off
the
loan
by
such
sales
within
one
year.
Moreover,
he
was
well
aware
of
the
potentialities
of
the
purchase
when
it
was
made.
In
his
official
capacity
as
a
supervisor,
he
had
acquired
a
full
knowledge
of
land
values
in
the
whole
of
the
Fraser
Valley.
He
knew
of
the
demand
for
building
lots
in
the
Surrey
area
where
many
houses
were
being
built
under
the
National
Housing
Act.
He
knew
that
a
new
road
was
likely
to
be
built
in
the
vicinity
which
would
enhance
the
value
of
his
property
and
facilitate
its
sale.
The
estimated
profits
which
he
anticipated
by
subdivision,
development
and
sale,
as
shown
by
Exhibit
4,
indicate
quite
clearly
not
only
what
his
intentions
were,
but
also
that
prior
to
his
purchase
he
was
fully
aware
that
the
property
could
be
acquired
at
a
bargain
and
that
he
would
in
all
likelihood
reap
a
substantial
profit
by
selling
it.
As
shown
by
the
bank
manager’s
third
report
dated
June
16,
1955,
the
appellant
was
interested
in
an
informal
offer
from
Fraser
Valley
Lands
Ltd.
to
purchase
the
whole
property
for
$200,000;
that
was
before
the
bank
loan
was
made
and
prior
to
completion
of
the
purchase.
In
my
opinion,
the
appellant
acquired
the
property
for
speculative
purposes.
I
think
his
main
intention
was
to
subdivide
it
into
lots
suitable
for
residences,
install
the
necessary
facilities
and
then
sell
the
lots
as
soon
as
possible;
but
that
he
was
always
prepared
to
dispose
of
it
in
some
other
way,
such
as
by
sale
en
bloc.
It
is
therefore
similar
in
many
respects
to
the
case
of
Day
v.
M.N.R.,
[1958]
Ex.
C.R.
44;
[1958]
C.T.C.
33,
in
which
I
held
that
the
profits
received
by
the
taxpayer
from
the
purchase
and
sale
of
129
acres
of
land
were
taxable
as
an
adventure
or
concern
in
the
nature
of
trade,
notwithstanding
the
fact
that
there
was
only
one
venture
and
that
the
original
intention
of
the
taxpayer
was
to
subdivide
the
property,
develop
it
in
the
usual
way
and
then
sell
off
the
lots;
and
that
intention
was
frustrated
by
a
lack
of
capital
and
accordingly
the
taxpayer
sold
the
property
en
bloc.
In
that
case
I
followed
McIntosh
v.
M.N.R.,
[1958]
S.C.R.
119;
[1958]
C.T.C.
18,
a
decision
of
the
Supreme
Court
of
Canada
which
upheld
the
judgment
of
Hyndman,
D.J.
in
this
Court,
[1956]
Ex.
C.R.
127;
[1956]
C.T.C.
10.
In
that
ease
the
Court
unanimously
agreed
with
Hyndman,
D.J.’s
findings
with
reference
to
the
appellant,
that
‘
‘
Having
acquired
the
said
property
there
was
no
intention
in
his
mind
to
retain
it
as
an
investment,
but
to
dispose
of
the
lots,
if
and
when
suitable
prices
could
be
obtained”.
But
even
if
I
accepted
the
evidence
of
the
appellant
in
the
present
case
that
he
had
in
mind
the
intention
to
acquire
the
property
as
a
farm
for
his
own
use,
it
is
abundantly
clear
that
such
was
not
his
sole
intention.
At
all
relevant
times
there
was
at
least
an
alternative,
and
probably
the
main,
intention
to
dispose
of
the
property
as
soon
as
possible,
either
by
promoting
a
subdivision
and
selling
lots
or
by
sale
en
bloc.
In
such
circumstances,
the
case
falls
clearly
within
the
principles
laid
down
by
the
Supreme
Court
of
Canada
in
Regal
Heights
Limited
v.
M.N.R.,
[1960]
S.C.R.
902;
[1960]
C.T.C.
384.
In
that
case
Judson,
J.,
in
delivering
judgment
for
the
majority
of
the
Court,
agreed
with
the
opinion
of
Dumoulin,
J.
at
trial,
that
the
primary
aim
of
the
partners
in
the
acquisition
of
the
properties
was
the
establishment
of
a
shopping
centre,
but
that
there
was
also
an
intention
to
sell
at
a
profit
if
they
were
unable
to
carry
out
their
primary
aim.
At
p.
907,
Judson,
J.
said:
“Their
venture
was
entirely
speculative.
If
it
failed,
the
property
was
a
valuable
property,
as
is
proved
from
the
proceeds
of
the
sales
that
they
made.
There
is
ample
evidence
to
support
the
finding
of
the
learned
trial
judge
that
this
was
an
undertaking
or
venture
in
the
nature
of
trade,
a
speculation
in
vacant
land.
These
promoters
were
hopeful
of
putting
the
land
to
one
use
but
that
hope
was
not
realized.
They
then
sold
at
a
substantial
profit
and
that
profit,
in
my
opinion,
is
income
and
subject
to
taxation.’’
I
must
therefore
hold
that
the
appellant’s
profit
from
the
sale
of
the
real
estate
in
the
1955
taxation
year
(and
as
computed
in
the
re-assessments
in
question)
was
a
profit
derived
from
an
adventure
or
concern
in
the
nature
of
trade
and
was
therefore
income
from
a
business
within
the
meaning
of
Sections
3,
4
and
139(1)
(e)
of
the
Income
Tax
Act.
Accordingly,
the
appeal
will
be
dismissed
with
costs
and
the
re-assessments
made
upon
the
appellant
for
each
of
these
years
will
be
affirmed.
Judgment
accordingly.
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