DUMOULIN,
J.:—This
is
an
appeal
from
a
decision
of
the
Income
Tax
Appeal
Board,
dated
August
22,
1957,
17
Tax
A.B.C.
419,
dismissing
appellant’s
prior
appeal
in
respect
of
his
income
tax
assessment
for
taxation
year
1954.
In
connection
with
this
taxation
period,
the
respondent
increased
appellant’s
assessable
returns
by
adding
$6,201.23
as
net
profit
on
the
resale
of
a
parcel
of
land
in
Ville
St-Laurent,
now
the
City
of
St-Laurent,
one
of
the
most
thriving
and
progressive
municipalities
constituting
the
greater
Montreal.
In
his
exception
to
this
revised
assessment,
appellant
counters
that:
(See
Statement
of
Facts)
“6.
The
purchase
was
motivated
solely
and
exclusively
in
order
to
provide
the
appellant
[a
very
successful
general
building
contractor]
with
a
long
term
home
for
his
business.
11.
The
said
gain
constitutes
a
capital
gain
and
not
taxable
income.
12.
Acquisition
of
the
land
which
gave
rise
to
the
said
gain
was
not
in
any
way
an
adventure
in
the
nature
of
trade.
13.
The
sale
of
the
said
land
constituted
the
realization
of
a
capital
asset.’’
In
law,
the
respondent
merely
replies
that:
(Cf.
Reply
to
Notice
of
Appeal,
paragraph
7)
7.
The
amount
of
$6,201.23,
net
profit
on
the
sale
of
the
above-mentioned
parcel
of
land,
constitutes
income
of
the
appellant
for
the
taxation
year
1954
and
the
tax
thereon
has
been
properly
and
accurately
determined
and
assessed
by
the
Respondent
within
the
meaning
of
Sections
3
and
4
of
the
Income
Tax
Act.
’
Intrinsically
considered,
the
facts
leading
up
to
this
litigation
remain
largely
uncontested,
the
moot
question
arising
from
the
legal
connotation
attached
to
them
by
each
of
the
contending
parties.
As
already
said,
the
appellant,
Leon
Adler,
carries
on
the
business
of
general
building
contractor,
presently
occupying
a
rather
spacious
office
in
Ville
St-Laurent,
now
the
City
of
St-Laurent,
off
Authier
Street,
north
of
Côte-de-Liesse.
It
is
a
matter
of
general
knowledge,
I
believe,
that
Ville
St-Laurent
is
a
rapidly
expanding
municipality
on
the
Island
of
Montreal.
In
1953,
Mr.
Adler
felt
that
his
office
space,
on
Manseau
Street,
in
Outremont,
no
longer
sufficed
to
the
requirements
of
his
trade
which,
according
to
the
customary
expression,
had
increased
by
leaps
and
bounds”.
He
began
inquiring
about
some
suitable
location
in
August
of
1953,
his
attention
being
drawn,
initially,
to
a
vacant
lot
of
some
10,000
feet
on
Davaar
Street,
Outremont,
owned
by
a
Mrs.
Bessette.
This
tentative
deal
did
not
eventuate,
as
Mrs.
Bessette’s
title
to
the
property
was,
in
virtue
of
her
late
husband’s
will,
subject
to
certain
conditions
of
avoidance.
Adler’s
second
attempt,
a
26,000
feet
lot
along
Laurentian
Boulevard,
also
proved
unsuccessful,
because
a
railway
company
held
a
servitude
of
passage
over
the
land
(Cf.
Ex.
A-3).
The
appellant,
who
had
agreed
to
vacate
by
May
1
his
former
premises,
sold
to
Thrift
Stores
Inc.,
was
under
some
pressure,
when
Notary
Hart,
his
agent,
got
in
touch
with
Messrs.
Scott
and
Paradis,
or
more
precisely
their
representative,
Federation
Realties,
entrusted
with
the
bulk
disposal
of
an
unoccupied
area,
measuring
exactly
196,847
square
feet
(Cf.
Ex.
A-4).
This
land
was
an
unsubdivided
portion
of
lot
number
478
(Pt.
478)
of
St-Laurent
Parish.
In
his
evidence,
the
only
one
adduced,
Mr.
Adler
is
quite
explicit
on
the
topic
that
a
space
of
the
above
given
dimensions
far
exceeded
his
needs,
which
some
10,000
feet
or
thereabouts
would
have
met.
The
explanation
vouchsafed
is
that
he
tried
to
acquire
the
‘smallest
part
they
[i.e.,
Messrs.
Scott
and
Paradis]
would
sell’’,
but
since
this
land
could
not
be
obtained
piecemeal,
he
resolved
to
buy
the
entire
lot,
at
a
price
of
$0.40
per
square
foot,
a
total
sum
of
$78,738.80
(Cf.
Ex.
A-4).
The
purchase
was
duly
executed
on
January
18,
1954,
but
Adler
started
building,
before
actually
obtaining
a
legal
right
to
the
land,
an
office
completed
in
June
of
that
year.
The
structure
itself
covers
9,000
square
feet,
half
of
which
is
offices,
and
half
warehouse
and
garage.
A
global
space
of
27,000
square
feet,
roughly
16%
of
the
total
ground,
remains
unsold
and
occupied
by
Adler,
who
also
ceded
to
Ville
St-Laurent
‘‘an
area
of
about
450
feet
by
66
feet’’
for
the
opening
of
a
road
throughout
the
length
of
this
property.
Four
separate
lots
were
subsequently
included
in
a
subdivision
of
the
excess
land
and
parcelled
off
to
four
purchasers,
netting
a
profit
of
$34,748.88,
although
an
item
of
$6,201.23
only
is
at
stake
in
this
appeal.
Regarding
the
portion
of
27,000
feet
utilized
or
retained
by
appellant,
it
lies
at
the
rear
of
the
property,
and
could
be
reached
only
by
a
road
built
for
that
purpose.
Appellant,
on
eross-examination,
refused
to
concede
that
this
back
section
constituted
a
less
valuable
part.
The
fact
remains,
however,
that
usually,
the
front
portion
of
a
piece
of
land,
abutting
on
a
street
or
roadway,
is
more
saleable.
It
would
appear,
and
no
blame
attaches,
that
Mr.
Adler
surely
does
not
belong
to
the
hesitant
type.
In
business
matters,
if
the
instant
case
offers
a
fair
sample,
his
decisions
are
prompt
and
pertinent.
He
initiated
constructional
operations,
we
know,
without
waiting
for
due
completion
of
the
conveying
instrument,
and
went
one
better
in
disposing
of
the
unneeded
ground.
The
following
excerpts,
taken
from
the
transcript
of
his
testimony
at
pages
24
and
25,
bear
out
this
impression.
He
is
examined
by
his
counsel.
Page
24:
“Q.
In
connection
with
the
property
that
you
acquired
under
Exhibit
A4,
did
you
need
that
much
land
for
purposes
of
your
own
construction
?
A.
No
sir.
Q.
What
was
your
intention
with
respect
to
the
excess
land
that
you
did
not
need
?
A.
I
wanted
to
dispose
of
it.
Q.
And
did
you
want
to
dispose
of
it
on
a
commercial
basis
or
profit
basis,
or
any
other
basis???
Page
25:
“A.
I
just
wanted
to
dispose
of
it.
I
did
not
care
one
way
or
another.
Q.
What
effort
did
you
make
to
dispose
of
it?
A.
Well,
I
almost
disposed
of
half
of
it
before
I
bought
it.”’
We
are
aware
that
four
purchasers
bought
the
corresponding
newly
subdivided
lots.
Reverting
to
the
appellant’s
assertion
(Statement
of
Facts,
paragraph
6)
that
‘the
purchase
was
motivated
solely
and
exclusively
in
order
to
provide
.
.
.
a
long
term
home
for
his
business’’,
the
admitted
facts
disclose
a
complete
misconception
of
the
matter.
There
may
be
in
store,
future
alone
will
tell,
‘‘a
long
term’’
occupancy
of
the
office
and
the
land
it
rests
on,
and
no
dispute
arises
on
this
score,
but
the
‘‘long
term’’
notion
is
patently
missing
in
the
lightning
quick
sale
of
those
170,000
odd
feet
of
land,
transacted
even
before
Adler’s
ownership
of
them.
Should
time
and
continued
retention
of
a
property
be,
to
a
degree,
a
qualifying
factor
of
an
investment,
and
there
is
no
dearth
of
authorities
to
that
effect,
then
we
might
delete
this
element
from
the
case
without
further
ado.
Even
so,
a
brief
reference
will
be
had,
particularly
on
the
score
of
retention,
to
recent
cases
wherein
its
significance
was
attested.
Mr.
Justice
Hyndman,
D.J.,
as
he
then
was,
wrote
in
re
M.N.R.
v.
Mcintosh,
[1956]
Ex.
C.R.
127,
at
130
;
[1956]
C.T.C.
10
at
12,
that:
“[McIntosh]
Having
acquired
the
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.’’
McIntosh
had
contended
the
profit
made
on
the
sale
of
the
20
lots
constituted
a
capital
accretion
out
of
an
investment
in
the
ordinary
sense.
The
lines
immediately
following,
albeit
dealing
with
another
aspect,
strangely
enough
dispose
of
a
point
raised
on
Adler’s
behalf,
when
he
casually
mentioned
a
loss
of
less
than
three
hundred
dollars
on
the
resale
of
one
of
the
four
lots.
‘‘It
was
said
that
the
price
received
by
him
[McIntosh]
was
one
or
two
hundred
dollars
less
than
the
real
value,
and
that
this
fact
in
some
way
negatived
an
intention
of
entering
into
a
scheme
to
make
a
profit
on
the
venture.
I
am
unable
to
see
any
force
in
this
argument.
In
view
of
all
the
circumstances,
his
insistence
in
obtaining
the
property
could
unquestionably
only
have
been
with
the
object
of
making
a
gain
or
profit.’’
Mr.
Justice
Hyndman’s
decision
was
unanimously
affirmed
by
the
Supreme
Court
of
Canada,
[1958]
S.C.R.
119,
at
121:
[1958]
C.T.C.
18
at
20.
Chief
Justice
Kerwin,
delivering
judgment
for
the
Court,
concluded
his
remarks
by
stating:
In
the
present
case
I
agree
with
Mr.
Justice
Hyndman’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.’
”’
I
do
not
question
in
the
least
Mr.
Adler’s
assertion
that
he,
or
rather
his
business,
required
larger
and
more
up-to-date
facilities
than
those
formerly
obtaining.
On
the
other
hand,
his
claim
that
he
positively
could
not
find,
in
and
about
Ville
St-Laurent,
a
smaller
space,
from
the
time
he
decided
to
move
and
January
18,
1954,
sounds
somewhat
unconvincing.
Even
if
that
mild
scepticism
of
mine
be
unfounded,
the
legal
situation
would
remain
unaltered.
The
pertinent
facts:
quick
disposal,
profit-taking,
are
proved;
they
stand
as
convincing
witnesses,
and
as
the
Scots
say:
‘‘So
the
facts
go,
so
goes
the
law.”
Now,
in
order
that
no
confusion
should,
if
possible,
becloud
this
analysis,
I
repeat
it
was
a
perfectly
legitimate
and
reasonable
thing
for
the
appellant
to
amortize,
through
some
profitable
disposal
of
unnecessary
land,
the
cost
of
his
new
installation.
Neither
am
I
asked
to
pass
judgment
upon
so
natural
and
sound
a
venture,
but
to
decide
whether
or
not
it
falls
within
the
purview
of
our
income
tax
law.
The
other
case:
Day
v.
M.N.R.,
[1958]
Ex.
C.R.
44,
at
51;
[1958]
C.T.C.
33
at
40,
dealt
with
a
situation
which,
for
all
practical
ends,
may
be
fairly
likened
to
the
instant
one.
Mr.
Justice
Cameron
cited
at
some
length
from
Justice
Hyndman’s
pronouncement
in
McIntosh
v.
M.N.R.
(supra),
emphasizing
the
passage
about
the
lack
of
intention
to
retain
the
property
at
issue.
The
learned
judge
wrote:
“I
am
unable
to
distinguish
that
case
[McIntosh
v.
M.N.R.]
from
the
one
now
before
me.
Here
Day
had
no
intention
of
retaining
the
property
as
an
investment,
but
did
intend
to
sell
it
if
and
when
a
suitable
price
could
be
obtained.
Having
entered
into
the
business
of
a
sub
divider
in
exactly
the
same
way
as
one
engaged
in
that
business
would
do,
and
having
been
frustrated
in
completing
this
arrangements
for
disposing
of
it
in
one
way—namely,
in
lots—he
did
sell
it
in
another
way
—namely,
en
bloc.”
It
could
go
without
mention
that
here
the
‘‘frustration’’
angle
is
noticeably
absent
since
the
appellant
is
clear
as
to
his
decision
of
selling
the
excess
land.
I
have
already
quoted
on
this
topic
from
page
25
of
the
transcripted
evidence,
and
might
add
to
it
replies
appearing
on
page
58
:
Adler
is
under
cross-examination.
“Q.
And
you
built
a
road?
A.
That’s
correct.
Q.
And
you
did
so
with
a
view
of
trying
to
find
somebody
to
buy.
Otherwise,
they
would
not
have
bought,
is
that
right?
A.
Obviously,
I
did
not
want
it
all.
There
is
no
question
about
it.
I
was
very
happy
to
sell
it
off.”
The
appellant
is
very
actively
and
successfully
engaged
in
the
contracting-building
line.
He
agrees
that
his
annual
turn-over
runs
to
a
million
or
two
million
dollars
(Cf.
Transcript,
p.
48).
During
the
past
decade
or
so,
in
the
pursuit
of
his
trade,
he
bought
land
in
several
sectors
of
metropolitan
Montreal,
and
also
in
Dartmouth,
Nova
Scotia,
for
hundreds
of
thousands
of
dollars.
In
1954,
his
income
tax
return,
page
3,
in
the
liability
entry,
shows
an
item
of
$148,281.30,
listed
‘‘
Accounts
Payable—
Land’’.
I
note
that
this
latter
document,
extensively
read
from
at
the
trial,
does
not
appear
to
have
been
filed.
On
the
grounds
purchased,
Adler
erected
individual
apartments
by
the
hundreds
(Cf.
Transcript,
pages
34
to
45
inclusive).
His
explanation,
that
he
never
acquired
‘‘vacant
land”
before
on
a
purely
speculative
venture,
does
not
detract
from
his
occupational
capacity
of
building
contractor
regularly
engaged
in
buying
land.
Mr.
Justice
Cameron’s
words
in
the
case
above
suit
the
present
appellant,
for
manifest
reasons,
with
yet
greater
precision,
than
they
suited
Day,
Adler
being
‘‘.
..
one
engaged
in
that
business
.
.
.”
and
having
retained
a
qualified
surveyor
to
subdivide
four
lots,
although,
through
some
involuntary
confusion,
I
presume,
this
information
was
not
readily
elicited
(Cf.
Transcript,
pages
61,
62,
63,
64).
For
the
reasons
above,
I
have
no
doubt
whatsoever
that
the
amount
of
$6,201.23
added
by
the
respondent
to
appellant’s
income
tax,
due
for
the
year
1954,
does
accrue
from
a
business
profit
and
was
properly
assessed
within
the
meaning,
inter
alia,
of
Sections
3
and
4
of
the
Income
Tax
Act.
Therefore
the
appeal
is
dismissed
with
taxed
costs
in
favour
of
the
respondent.
Judgment
accordingly.