CATTANACH,
J.:—These
are
appeals
from
decisions
of
the
Tax
Appeal
Board
(32
Tax
A.B.C.
259
and
266)
dated
June
14,
1963
whereby
the
Board
dismissed
the
appeals
of
the
three
appellants
therein
from
the
assessments
of
the
Minister
for
the
1959
taxation
year.
The
appellants
are
brothers
who
are
partners
in
their
many
activities
each
of
whom
manages
his
own
special
line
of
business.
The
appellant,
Harry
Sheftel
was
engaged
in
the
cattle
purchasing.
and
marketing
business,
whereas
the
other
brothers,
Leopold
and
Benjamin,
were
primarily
responsible
for
the
operation
of
a
chain
of
neighbourhood
grocery.
and
general
stores.
When
competition
from
the
large
grocery
supermarkets.
became
severe
this
business
was
gradually
curtailed.
and.
eventually
abandoned.
However,
the
brothers,
being
enterprising,
venture-
some
and
experienced
businessmen,
turned
their
undoubted
talents
to
other
fields.
They
acquired
land
in
the
City
of
Calgary
upon
which
they
built
and
operated
neighbourhood
shopping
centres,
the
land
and
buildings
upon
which
the
stores
were
previously
operated
were
turned
to
account
either
by
renting
or
selling
existing
buildings
or
the
construction
of
buildings
on
vacant
lands
for
rental
purposes.
All
of
these
activities
covered
a
span
of
years
and
were
participated
in
by
all
three
brothers,
although
one
or
the
other
of
the
brothers
may
have
been
dominant
in
a
particular
transaction
depending
upon
their
respective
specialities.
The
transaction
which
gives
rise
to
the
instant
appeals
was
instigated
by
the
appellant,
Harry
Sheftel.
In
connection
with
their
cattle
operation
the
appellants
had
acquired
a
314
acre
parcel
of
land
from
the
City
of
Calgary
in
1949
in
close
proximity
to
the
existing
and
extensive
stock
yards
and
used
it
as
a
feed
lot.
After
using
the
property
as
a
feed
lot
from
1949
to
1954
(which
use
is
still
being
continued),
the
appellants
on
the
recommendation
of
Harry
Sheftel,
decided
that
the
original
feed
lot
was
too
small
for
their
expanded
business,
that
a
packing
plant
should
be
erected
on
that
site
and
a
larger
feed
lot
should
be
purchased.
In
purported
furtherance
of
this
purpose
the
appellants
purchased
a
10-acre
tract
of
land
on
April
1,
1957
described
as
follows
:
‘The
most
Southerly
Six
Hundred
and
Sixty
(660)
feet
of
the
most
Northerly
Nine
Hundred
and
Ninety
(990)
feet
of
the
West
Half
of
Legal
Subdivision
Five
(5)
of
Section
Twenty
Eight
(28),
Township
Twenty
three
(23),
Range
One
(1),
West
of
the
Fifth
Meridian
in
the
Province
of
Alberta
containing
Ten
(10)
Acres,
more
or
less.’’
The
land,
at
the
time
of
purchase,
was
within
the
municipality
of
Rockyview
but
very
close
to
the
then
existing
southerly
boundaries
of
the
City
of
Calgary.
The
registered
owner
of
the
land
was
Neil
D.
Campbell
who
pastured
horses
on
the
adjacent
10
acres.
He
had
sold
the
land
in
question
to
Ruth
A.
Henderson
under
an
agreement
for
sale
dated
July
12,
1956.
The
appellants
acquired
the
interest
of
Ruth
A.
Henderson
by
an
assignment
dated
April
1,
1957
at
a
total
cost
to
them
of
$25,200.
At
the
time
of
purchase
the
appellants
did
not
retain
an
independent
solicitor
to
act
on
their
behalf
in
the
requisite
conveyancing,
but
were
content
to
accept
and
rely
on
the
services
of
Ruth
A.
Henderson’s
solicitors.
The
agreement
provided
for
a
purchase
price
of
$21,000
payable
$6,000
on
execution,
and
$5,000
payable
on
July
5
in
each
of
the
years
1957,
1958
and
1959.
When
the
interest
under
the
agreement
was
assigned
to
the
appellants
on
April
1,
1957
the
balance
outstanding
was
$15,000.
It
was
further
provided
in
the
original
agreement
that
in
the
event
of
development
being
commenced
by
the
purchaser
at
any
time
prior
to
July
5,
1959
the
entire
outstanding
balance
of
the
purchase
price
would
become
due
and
payable
thereon.
There
was
no
adjustment
for
taxes
and
the
vendor
was
entitled
to
remain
in
possession
and
be
responsible
for
taxes
until
development
of
the
property
being
begun
by
the
purchasers
at
which
time
an
adjustment
for
taxes
would
be
made
and
the
balance
of
the
purchase
price
would
become
payable
if
development
was
begun
prior
to
July
5,
1959,
but
in
the
event
no
development
was
commenced
prior
to
July
5,
1959
the
provisions
for
payment
as
above
mentioned
would
prevail.
The
assignment
to
the
appellants
on
April
1,
1957
made
the
conditions
in
the
Agreement
for
Sale
applicable
to
them.
The
appellants
made
no
enquiries
at
the
time
of
purchase
as
to
any
zoning
regulations
applicable,
the
taxes
payable,
nor
the
services
available.
Harry
Sheftel
did
testify,
however,
that
this
land
was
within
ready
access
by
truck
over
passable
roads
to
the
original
feed
lot
upon
the
site
of
which
it
was
proposed
to
build
a
packing
plant
and
that
from
the
general
appearance
of
the
area
it
was
devoted
solely
to
agricultural
uses
and
accordingly
he
foresaw
no
impediment
to
the
construction
of
a
feed
lot.
However,
evidence
was
adduced
by
the
Minister
that
on
April
1,
1957
there
were
a
number
of
medium
priced
houses
along
66th
Avenue
and
south
on
14th
Street
not
too
far
distant
from
the
subject
property.
A
subdivision
known
as
Meadowlark
was
well
under
way
a
half
mile
distant
from
the
property
and
there
were
two
substantial
homes
on
100-acre
tracts
of
land
some
quarter
of
a
mile
distant.
The
appellants
did
not
indicate
to
Ruth
A.
Henderson
or
Neil
D.
Campbell
the
use
to
which
the
land
was
proposed
to
be
put
because,
as
he
testified,
he
assumed
that
neither
of
them
was
concerned.
The
appellants
Harry
and
Leopold
Sheftel
testified
(Benjamin
did
not
testify)
that
they
had
no
knowledge
of
proposals
or
rumours
of
annexation
of
the
area
by
the
City
of
Calgary
despite
the
fact
that
public
hearings
were
held
during
August
1956
and
March
1957
respecting
annexation
of
which
prior
notice
had
been
given
by
insertions
in
local
newspapers
under
the
legal
notices
columns.
The
land
was,
in
fact,
brought
into
the
City
of
Calgary
by
order
of
the
Board
of
Public
Utility
Commissioners
for
the
Province
of
Alberta
dated
June
4,
1957
with
retroactive
effect
to
December
30,
1956,
The
appellants
decided:
shortly
after
the
purchase
of
the
land
to
provide
a
house
for
a
man
to
care
for
the
cattle
as
well
as
a
garage.
In
order
to
do
so
it
was
necessary
to
obtain
the
consent
of
Neil
D.
Campbell,
the
vendor
and
still
registered
owner.
An
agreement
was,
therefore,
completed
between
Campbell
and
the
appellants
dated
April
24,
1957
whereby
consent:
to
construct
a
house
and
garage
was
obtained
provided.
they
indemnified
him
for
any
resultant
increase
in
taxes
and
the
agreement
also
provided
that
the
appellants
should
obtain
the
permission
of
the
relevant
municipal
authorities
before
commencing
construction
of
the
dwelling
house
and
garage.
It
follows
that
the
appellants
on
April
24,
1957
contemplated
the
possibility
that
permission
of
the
municipal
authorities
was
required
to
construct
a
house
and
garage.
Initial
enquiries
were
made
with
respect
to
the
building
of
a
packing
plant
on
the
original
feed
lot
site.
Blueprints
were
prepared
for
the
packing
plant.
Correspondence
was
conducted
with
the
Federal
Department
of
Agriculture
in
Ottawa
in
1954
and
with
the
Calgary
Health
Department
in
1955,
all
prior
to
the
purchase
of
the
land
here
in
question
on
April
1,
1957.
In
April,
1958
the
appellants
must
have
learned
that
the
land
which
they
proposed
to
use
as
a
feed
lot
had
been
incorporated
within
Calgary
city
limits
because
on
that
date
the
Montreal
Trust
Company,
which
almost
invariably
acted
on
behalf
of
the
appellants
in
transactions
of
this
nature,
wrote
the
City
of
Calgary
to
advise
that
the
construction
and
operation
of
a
feed
lot
oh
the
land
in
question
was
in
contemplation
and
requested
permission
to
so
construct
a
feed
lot.
On
April
25,
1958
the
city
replied
enclosing
a
‘c
of
the
decision
of
the
Technical
Planning
Board
stating
that
the
request
to
operate
a
feed
lot
on
the
premises
was
considered
and
refused
because
the
property
had
been
classified
on
the
interim
zoning
guide
as
‘‘
Agricultural
future
residential’’
which
did
not
permit
the
development
of
feed
lots
and
that
feed
lots
were
only
permitted
in
heavy
industrial
areas
under
special
The
appeal
procedure
from
such
refusal
was
explained
but
no
appeal
was
launched
because,
as
Harry
Sheftel
testified,
hé
considered
an
appeal
to
be
futile
having
been
so
informed
by
a
civic
official
who
also
indicated
to
Harry
Sheftel
that
he
would
vigorously
oppose
such
an
appeal.
Despite
this
rebuff
the
project
of
constructing
a
packing
plant
was
not
abandoned
because
there
was
tendered
in
evidence
a
letter
dated
Mareh
27,
1961
from
the
Stockyard
Branch
of
the
Bank
of
Montreal
offering
financial
assistance
with
respect
thereto
subject
to
adequate
security
being
‘given.
There
was
also
correspondence
in
August
1960
with
a
manufacturer
of
meat
packing
machinery
and
equipment
in
Chicago,
Illinois,
followed
by
a
personal
visit
of
the
appellant,
Harry
Sheftel,
to
the
manufacturer
in
Chicago
for
a
personal
conference
and
a
visit.
to
plants
there.
The
appellants
expended
the
sum
of
$12,
000
in
furtherance
of
this
project.
On
April
14,
1959
the
appellants
sold
the.
interest
in
the
10-acre
parcel
they
had
acquired
on
April
1,
1957
to
Kelwood
Corporation
Limited
for
the
purpose
of
subdivision
and
building.
Kelwood
was
particularly
interested
in
this
area
and
had
been
busily
engaged
in
purchasing
land
and
options
in
the
area.
This
company
was
also
anxious
that
the
area
should
become
annexed
to
the
City
of
Calgary
to
facilitate
the
provision
of
necessary
services
for
the
construction
of
housing
subdivisions.
The
land
was
sold
for
$47,500:thereby:
giving
rise
to
a
profit
of
$22,300
divided
equally
among
the
three
appellants
amounting
to
$7,433.33
each.
These
amounts
were
added
by
the
Minister
to
the
reported
income
of
the
respective
appellants
for
the
1959
taxation
year.
Since
the
identical
issue
arises
in
all
three
appeals
it
was
agreed
that
the
evidence
adduced
in
one
appeal
should
be
applicable
to
the
other
two.
There
is
no
dispute
as
to
the
amounts
of
the
assessments
but
the
question
for
determination
is
the
familiar
one
as
to
whether
the
profit
on
the
sale
of
a
parcel
of
real
estate
was
income
for
the
purposes
of
the
Income
Tax
Act,
R.S.C.
1952,
c.
148.
By
the
Notice
of
Appeal
from
the
Tax
Appeal
Board
the
appellants
set
out
their
case
as
follows
:
“(a)
The
intention
of
the
appellant
and
his
brothers
was
the
acquisition
of
property
for
the
purpose
of
development
as
a
feed
lot
and
as
a
result
the
creation
of
income
from
carrying
on
the
business
of
operating
a
feed
lot.
(b)
The
fact
that
the
appellant
and
his
brothers
were
unable
to
use
the
land
for
the
purpose
for
which
it
had
been
acquired
arose
from
circumstances
over
which
they
had
no
control.
(c)
Neither
the
appellant
nor
his
brothers
made
any
effort
to
sell
the
parcel
of
land
and
they
did
not
list
the
property
for
sale
with
any
licensed
Real
Estate
Agent.
(d)
The
increment
in
value
of
the
parcel
of
ten
acres
of
land
was
not
the
result
of
any
act
by
the
appellant
or
his
brothers
but
was
caused
solely
by
the
Sudden
development
of
the
City
of
Calgary
southward,
resulting
in
an
increase
in
value
over
which
the
appellant
and
his
brothers
had
no
control.”
The
Minister’s
reply,
so
far
as
it
is
relevant,
reads
as
follows:
“8.
In
making
the
re-assessment,
notice
of
which
was
given
on
the
21st
day
of
March,
1961,
the
Respondent
acted
upon
the
following
assumptions
:
(a)
that
the
Appellant,
in
concert
with
Benjamin
Sheftel
and
Leopold
Sheftel,
acquired
the
land
referred
to
in
paragraph
5
of
the
Notice
of
Appeal
(hereinafter
referred
to
as
the
‘said
lands’)
with
a
view
to
trading
in,
dealing
with,
or
otherwise
turning
it
to
account
at
a
profit;
(b)
that
the
Kelwood
Corporation
Limited
purchased
the
said
lands
from
the
persons
referred
to
in
sub-para-
graph
(a)
hereof
on
the
14th
day
of
April,
1959,
for
the
sum
of
$47,500.00;
(c)
that
the
profit
realized
by
the
aforementioned
persons
from
the
purchase
and
subsequent
resale
of
the
said
lands
was
$22,300.00;
(d)
that
the
Appellant’s
share
of
the
profit
from
the
purchase
and
subsequent
resale
of
the
said
lands
was
$7,433.34;
(e)
that
the
Appellant’s
share
of
the
profit
arising
from
the
sale
of
the
said
lands
during
the
Appellant’s
1959
taxation
year
constituted
part
of
his
income
for
that
year
since
it
was
profit
from
a
business
or
adventure
in
the
nature
of
trade.”
The
narrow
issue
is,
therefore,
whether
the
appellants
purchased
this
property
on
April
1,
1957
“with
the
view
to
trading
in,
dealing
with,
or
otherwise
turning
it
to
account
at
a
profit’’.
If
they
did,
the
resultant
profit
is
taxable.
If,
however,
as
the
appellants
allege,
the
purchase
of
the
property
was
made
‘‘for
the
purpose
of
development
as
a
feed
lot’’
and
they
“were
unable
to
use
the
land
from
circumstances
over
which
they
had
no
control’’
then
the
profit
from
the
land
would
not
be
taxable.
The
onus
of
showing
that
the
assumptions
so
made
by
the
Minister
were
unfounded
falls
on
the
appellants.
If
it
were
the
appellants’
exclusive
purpose
at
the
time
of
the
acquisition
of
the
land
to
construct
and
operate
a
feed
lot
thereon,
the
profit
from
the
sale
after
that
project
had
been
necessarily
abandoned,
would
not
be
a
profit
from
a
business
or
an
adventure
in
the
nature
of
trade.
If
that
was
not
their
exclusive
purpose
at
that
time
there
can,
in
the
circumstances,
be
no
doubt
that
the
acquisition
of
this
land
had
for
its
purpose
or
one
of
its
possible
purposes,
subsequent
disposition
at
a
profit
and
the
resulting
profit
is,
therefore,
taxable.
The
onus
of
disproving
the
Minister’s
assumption,
when
assessing,
that
the
latter
was
the
case,
was
on
the
appellants
and
in
my
view
they
have
failed
to
discharge
that
onus:
The
question
of
fact
as
to
what
was
the
appellant’s
purpose
in
acquiring
this
property
is
one
that
must
be
decided
after
considering
all
the
evidence.
The
appellants’
statement
at
the
trial
that
their
intention
was
to
construct
and
operate
a
feed
lot
on
this
particular
property
is
only
a
part
of
the
evidence.
While
such
evidence
may
have
been
given
in
all
sincerity
it
still
may
not
reflect
the
true
purpose
at
the
time
of
acquisition.
Present
statements
as
to
intention
at
the
time
of
acquisition
must
be
considered
along
with
the
objective
facts.
To
me
it
is
inconceivable
that
the
appellants,
being
businessmen
of
astuteness
and
acumen,
should
have
undertaken
the
purchase
of
the
property
in
question
with
no
other
object
in
mind
except
its
use
as
a
feed
lot
without
making
any
preliminary
enquiries
whatsoever
as
to
whether
they
would
be
permitted
to
use
the
land
for
that
purpose.
They
made
no
enquiries
prior
to
purchase
from
any
municipal
authority
as
to
zoning
regulations,
taxes
to
be
paid
when
they
eventually
acquired
title
or
the
availability
or
likelihood
of
the
availability
of
services.
The
appellants,
over
a
span
of
years,
had
participated
in
the
purchase
and
sale
of
land,
both
within
and
without
the
City
of
Calgary,
and
had
conducted
on
such
lands
various
enterprises.
From
this
it
follows
logically
that
they
must
have
been
aware
of
the
necessity
of
obtaining
permission
to
devote
land
to
certain
uses
and
of
complying
with
existing
use
and
building
restrictions
which
may
have
been
imposed
thereon.
Both
Harry
and
Leopold
Sheftel
testified
that
from
their
examination
of
the
location
of
the
land
they
anticipated
no
difficulty
in
obtaining
permission
to
operate
a
feed
lot
on
it
at
the
time
of
purchase.
To
me
such
a
statement
is
so
naïve
as
to
confound
its
credibility.
There
were
a
number
of
residential
houses
of
variable
quality
in
the
area.
The
very
nature
of
a
feed
lot,
of
which
the
appellants
were
familiar,
would
of
necessity
inspire
opposition
to
one’s
presence
by
these
residents.
Furthermore,
the
appellants
had
been
resident
in
the
City
of
Calgary
for
‘their
entire
adult
and
business
life.
They
had
observed
and
participated
in
the
city’s
phenomenal
growth
and
expansion.
Therefore,
they
could
not
have
been
oblivious
to
the
likelihood
of
the
southerly
development
of
the
city
which
occurred
shortly
after
the
purchase
of
the
land.
In
point
of
fact
the
land
was
brought
into
the
limits
of
the
City
of
Calgary
by
order
dated
June
4,
1957,
just
two
month
after
its
purchase
by
the
appellants
on
April
1,
1957,
the
order
having
retroactive
effect
to
December
30,
1956.
The
appellants
professed
total
ignorance
of
the
annexation
proceedings
which
had
been
going
on
since
August,
1956
and
of
any
residential
development
in
the
area.
Because
of
their
limited
educational
advantages
the
appellants
also
professed
an
unfamiliarity
with
proceedings
for
annexation
and
their
attendant
preliminary
steps
and
matters
of
like
nature.
However,
they
almost
invariably
engaged
the
services
of
the
Montreal
Trust
Company
for
assistance
in
their
many
business
transactions,
but,
in
the
present
instance
they
did
not
seek
the
advice
of
the
trust
company
officers
but
accepted
the
services
of
the
vendor’s
solicitor
without
obtaining
independent
advice,
nor
did
they
instigate
the
most
elementary
precautionary
enquiries
to
ascertain
if
the
land
could
have
been
used
as
a
feed
lot.
As
evidence
of
their
intention
to
use
this
particular
land
as
a
feed
lot,
the
appellants
point.
to
the
steps
they
took
towards
the
ultimate
construction
of
a
meat.
packing
plant
on
the
3^-
acre
plot
of
land
on
which
the
original
feed
lot
was
conducted
and
it
was
submitted
that
the
plans
were
so
interwoven
that
one
could
not
be
completed
without
the
other.
However,
in
my
Opinion,
such
does
not
necessarily
follow.
The
appellants
had
also
purchased
a
20-acre
plot
in
the
Blackfoot
Trail,
which
was
used
to
grow
feed
and
was
purchased
at
a
much
lesser
cost
per
acre
than
the
land
here
in
question.
Both
such
parcels
of
land
were
equidistant
from
the
original
feed
lot
site
and
enjoyed
many
similar
advantages
in
common
for
use
as
a
feed
lot.
Therefore
there
would
have
been
no
insurmountable
obstacle
to
transferring
the
proposed
feed
lot
operation
to
the
20-acre
parcel
in
the
Blackfoot
Trail
if
the
packing
plant
project
were
to
be
completed.
Incidentally,
the
construction
of
the
packing
plant
had
not
as
yet
been
undertaken
at
the
time
of
trial.
The
first
step
taken
by
the
appellants
to
begin
the
feed
lot
project,
which
could
possibly
be
construed
as
preparatory
thereto,
was
the
writing
of
a
letter
dated
April
3,
1958
by
the
Montreal
Trust
Company,
on
instructions
of
the
appellants,
to
request
permission
to
construct
and
operate
the
feed
lot
in
the
lands
in
question,
that
is
one
year
after
the
purchase
of
the
land.
The
reply
was
a
definite
refusal
but
resort
was
not
had
to
the
appeal
procedure
outlined
in
the
reply.
It
is
quite
true
the
appellants
did
not
advertise
the
land
for
sale,
nor
did
they
list
it
with
a
real
estate
agency.
They
did
not
have
to.
The
Kelwood
Corporation
Limited
had
been
busily
engaged
in
acquiring
options
on
land
in
the
area,
advocating
annexation
of
the
area
by
the
city
and
generally
promoting
the
residential
development
of
the
area,
all
of
which
facts,
could
have
been
ascertained
by
any
interested
person
by
the
instigation
of
casual
enquiries
and
resort
to
the
records
of
the
Land
Titles
Office.
There
was
no
evidence,
therefore,
that
the
appellants
had
any
assurance
when
they
purchased
this
land,
that
they
would
be
permitted
to
operate
a
feed
lot
on
it.
They
were
hopeful
of
putting
the
land
to
this
use.
That
hope
was
not
realized
and
they
had
then
sold
it
at
a
profit.
After
having
given
careful
consideration
to
all
the
evidence,
I
am
not
satisfied
that
there
is
a
balance
of
probability
that
the
appellants
acquired
this
land
for
the
purpose
of
operating
a
feed
lot
to
the
exclusion
of
any
disposition
of
it
at
a
profit.
Accordingly,
it
cannot
be
said
that
the
assumptions
of
the
Minister,
in
assessing
the
appellants
as
he
did,
were
not
warranted.
The
appeals
are,
therefore,
dismissed
with
costs.