THURLOW,
J.:—This
is
an
appeal
by
the
administratrix
of
the
estate
of
Ambrose
D.
O’Brien,
deceased,
from
an
assessment
of
succession
duties
made
on
or
about
January
18,
1955,
in
respect
of
successions
to
property
of
the
said
deceased.
The
deceased
died
on
July
13,
1953,
leaving
among
other
assets
a
lot
of
land
in
Etobicoke
Township,
near
the
city
of
Toronto,
on
which
was
a
service
station
and
lunchroom,
and
the
only
issue
raised
in
this
appeal
is
the
value
of
that
property
for
the
purposes
of
the
Dominion
Succession
Duty
Act,
R.S.C.
1952,
c.
89.
The
combined
effect
of
Sections
2(a),
2(e)
and
5
of
the
Act
is
that
the
value
to
be
ascertained
is
the
fair
market
value
of
the
property
as
at
the
date
of
the
death
of
the
deceased.
The
property
is
situated
west
of
Toronto
on
the
south
side
of
the
Queen
Elizabeth
Way
about
a
quarter
of
a
mile
to
the
west-
ward
of
its
intersection
with
Highway
No.
27.
Both
are
heavily
travelled
highways,
and
the
surrounding
area
has
been
developing
rapidly
in
recent
years.
The
property
is
exceptionally
well
located
for
a
service
station.
It
is
the
nearest
station
to
Toronto
on
the
south
side
of
the
Queen
Elizabeth
Way,
the
nearest
service
station
to
the
eastward
being
some
four
and
a
half
miles
away.
The
nearest
service
station
to
the
westward
on
the
south
side
of
the
Queen
Elizabeth
Way
is
two
miles
distant.
Moreover,
for
some
years
there
have
been
regulations
in
force
restricting
the
opening
of
additional
service
stations
on
the
Queen
Elizabeth
Way.
The
lot
of
land
used
in
connection
with
the
service
station
has
an
irregular
shape.
Its
frontage
on
the
Queen
Elizabeth
Way
is
423
feet.
The
eastern
portion
of
this
frontage
has
a
depth
of
49
feet
and
is
used
as
a
parking
area.
The
remaining
portion
of
the
property
is
triangular
in
shape.
It
is
190
feet
deep
at
the
eastern
side,
and
on
the
southern
side
it
runs
along
a
service
road
for
a
distance
of
315
feet
to
join
the
Queen
Elizabeth
Way.
The
service
station
and
lunchroom
building
is
located
on
the
triangular
portion
of
the
lot.
The
building
consists
of
the
lunchroom
and
office
built
in
or
about
1938
and
a
two-bay
garage
erected
in
or
about
1951.
The
building
is
said
to
have
been
in
a
run-down
condition
in
July,
1953.
Various
parts
of
the
building
were
in
need
of
repair
and,
in
particular
the
washrooms
required
to
be
renovated
with
new
fixtures
and
new
walls.
The
driveways
and
aprons
around
the
pumps
were
rough
and
pitted
with
deep
holes.
Nevertheless,
in
1951,
409,988
gallons
of
gasoline
were
sold
at
this
station
;
in
1952,
427,370
gallons
were
sold;
and
from
January
1,
1955,
to
July
13
of
the
same
year
245,950
gallons
were
sold.
It
is
this
property,
as
it
was
on
July
18,
1953,
of
which
the
Court
must
find
the
fair
market
value.
In
a
succession
duty
return
filed
by
the
appellant
on
or
about
September
28,
1953,
the
property
was
valued
at
$15,000.
The
respondent
increased
this
valuation
to
$150,000
and
this
appeal
ensued.
Pursuant
to
an
order
of
this
Court,
pleadings
were
filed,
and
in
the
statement
of
claim
filed
by
the
appellant
it
is
alleged
that
on
July
13,
1953,
the
fair
market
value
of
the
property
was
not
in
excess
of
$43,000.
In
the
defence
filed
by
the
respondent,
it
is
alleged
that
the
value
was
$150,000.
In
my
opinion,
the
onus
of
proving
that
the
value
of
the
property
was
less
than
the
amount
at
which
the
respondent
assessed
it
rests
on
the
appellant.
However,
it
was
not
contended
at
the
hearing
of
the
appeal
that
the
value
was
$150,000.
The
evidence
as
a
whole
does
not
support
a
valuation
of
that
amount,
and
the
respondent’s
submission
was
that
the
value
was
$112,600.
In
these
circumstances,
the
matter
of
onus
can
have
little,
if
any,
bearing
on
the
result.
Following
the
death
of
her
husband,
the
appellant
operated
the
service
station
for
about
a
year,
during
which
she
made
some
repairs
and
alterations,
and
she
also
made
arrangements
with
a
different
oil
company
to
supply
gasoline
for
the
station.
As
part
of
such
arrangements,
the
oil
company
renovated
the
washrooms,
paved
and
otherwise
improved
the
grounds
and
approaches,
installed
new
service
station
equipment,
and
made
some
superficial
changes
to
the
building.
Shortly
after
the
changes
were
made,
the
oil
company
which
previously
had
been
supplying
the
station
made,
through
an
agent,
an
unsolicited
offer
of
$150,000
for
the
property.
The
appellant
refused
this
offer.
She
says
she
did
so
because
she
wanted
to
keep
the
station
for
her
sons.
The
terms
of
the
offer
are
not
in
evidence,
and
while
I
think
it
was
a
firm
offer
I
am
puzzled
by
some
of
the
circumstances
in
which
it
was
made,
including
the
company’s
desire
for
secrecy
when
it
knew
that
the
appellant
could
not
sell
the
property
without
first
giving
the
company
the
opportunity
to
buy
it
at
the
price
offered.
The
offer
was
made
at
a
time
when
the
offering
company
must
have
known
that
new
supply
arrangements
had
recently
been
made
with
the
other
company,
and
counsel
for
the
appellant
submitted
that
it
was
not
a
bona
fide
offer
at
all,
but
this
was
not
established.
Figures
were
given
in
evidence,
indicating
a
considerable
increase
in
gallonage
of
gasoline
sold
in
the
two
and
a
half
years
following
the
death
of
Ambrose
O’Brien,
but
it
is
quite
impossible
to
ascertain
to
what
extent
such
increases
resulted
from
factors
such
as
development
of
the
neighbourhood,
increase
in
traffic,
and
changes
in
the
station
and
in
its
operation
following
his
death.
Consequently,
no
conclusions
as
to
the
value
of
the
property
can
be
based
on
these
figures.
The
only
transfer
of
this
property
after
the
station
was
opened
was
that
made
to
Ambrose
D.
O’Brien
by
his
father
in
October,
1949.
The
consideration
expressed
in
the
deed
was
"‘the
giving
back
of
a
mortgage
for
$15,000,
other
good
and
valuable
consideration
and
the
sum
of
one
dollar’’.
Whether
$15,000
was
anywhere
near
the
value
of
the
property
in
1949
or
not,
I
am
satisfied
that
it
has
no
near
relation
to
the
value
of
the
property
in
July,
1953.
In
the
meantime,
the
two-bay
garage
had
been
erected,
the
neighbourhood
had
been
developing
rapidly,
traffic
had
been
on
the
increase,
and
the
gallonage
of
gasoline
sold
at
the
station
had
been
soaring.
This
transaction
accordingly
affords
no
assistance
in
determining
the
value
in
July,
1953.
Nor
does
the
assessment
for
real
property
taxes,
which
in
1954
was
$20,975,
advance
the
solution.
In
December,
1954,
Mr.
James
Laffey
and
in
November,
1956,
Mr.
R.
A.
Davis,
both
of
whom
are
well
qualified
and
experienced
appraisers,
investigated
and
estimated
the
value
of
the
property
as
of
July
13,
1953.
The
former
valued
it
at
$43,000,
the
latter
at
$122,500.
Mr.
Davis
included
in
his
valuation
$11,500
for
equipment,
the
greater
part
of
which
did
not
form
part
of
the
realty.
Both
of
these
men
gave
evidence
at
the
trial
of
the
appeal.
It
is
common
ground
that,
as
a
service
station,
the
property
is
being
put
to
its
best
possible
use,
that
an
oil
company
is
the
type
of
purchaser
most
likely
to
pay
the
highest
price
for
the
property,
and
that
in
estimating
how
much
an
oil
company
would
be
likely
to
pay
to
acquire
the
property
the
potential
sale
of
gasoline
is
a
consideration
of
the
utmost
importance.
Mr.
Laffey
stated
that
he
had
approached
the
problem
from
three
points
of
view,
viz.
first,
that
of
an
estimate
based
on
the
replacement
cost
of
the
property
less
depreciation,
second,
a
method
called
the
comparative
approach,
an
estimate
based
on
a
comparison
of
the
prices
at
which
other
similar
properties
had
recently
been
sold,
and
third,
a
method
called
the
income
approach,
an
estimate
of
value
based
on
anticipated
net
rental
to
be
derived
from
the
property.
In
the
first
of
these
approaches
he
calculated
the
replacement
cost
of
the
building
and
deducted
accumulated
depreciation,
which
gave
him
a
net
figure
of
$18,000
as
the
value
of
the
building.
He
then
accumulated
data
as
to
the
prices
paid
for
unimproved
land
purchased
as
sites
for
service
stations
shortly
before
and
after
July,
1953,
some
of
which
sites
were
on
the
Queen
Elizabeth
Way,
and
found
that
the
cost
per
acre
of
such
service
station
sites
ranged
from
$1,500
to
$15,650.
For
the
site
in
question,
which
is
1.3
acres,
he
then
estimated
a
value
of
$25,000,
and
by
adding
to
it
$18,000
as
the
value
of
the
building
he
arrived
at
his
estimate
of
$43,000
for
the
property.
In
the
second
method,
Mr.
Laffey
made
inquiries
as
to
the
sales
of
what
he
considered
roughly
comparable
service
stations
and
the
prices
paid
for
them
and,
by
making
comparisons,
reached
a
figure
of
$45,000
for
the
property.
In
his
third
approach,
the
witness
averaged
the
gallonage
of
gasoline
sold
at
the
station
in
the
preceding
two
and
a
half
years
to
reach
a
figure
of
431,000
gallons
per
year.
He
then
estimated
that
an
oil
company
owning
the
station
would
let
it
to
a
lessee
at
a
rental
equal
to
114
cents
per
gallon
and
thus
obtain
from
it
a
gross
revenue
of
$5,400.
From
this
he
deducted
$1,500
for
taxes
and
maintenance
to
leave
a
balance
of
$3,900,
of
which
he
capitalized
$1,500
at
six
per
cent
to
give
$25,000
as
the
value
of
the
land
and
the
remaining
$2,400
at
12
per
cent,
made
up
of
seven
per
cent
for
annual
return
and
five
per
cent
for
depreciation,
to
give
a
figure
of
$20,000
as
the
value
of
the
building.
Of
the
three
approaches,
he
preferred
the
first
and
adopted
$43,000
as
his
estimate
of
the
value
of
the
property.
He
disregarded
entirely
the
offer
of
$150,000
previously
mentioned
as
being
capricious,
and
as
he
thought
it
inconceivable
that
anyone
would
seriously
offer
that
amount
for
the
property
when
it
was
possible
to
acquire
a
better
site
and
build
a
better
building
for
$50,000
to
$60,000.
A
number
of
criticisms
of
Mr.
Laffey’s
estimate
were
advanced
in
argument,
chief
among
which
were
that
prices
paid
for
unimproved
land
intended
as
sites
for
service
stations
give
no
indication
of
the
value
of
a
site
of
proven
value
as
a
gasoline
outlet,
that
the
sales
used
for
comparison
in
his
second
approach
did
not
afford
a
true
comparison,
and
that
in
the
third
approach
he
calculated
the
rental
on
an
average
of
past
sales
rather
than
on
an
estimate
of
potential
sales
and
at
too
low
a
rate
and
did
not
take
into
account
prospective
rental
from
the
lunchroom.
Mr.
Davis
also
approached
the
problem
by
the
same
three
methods
but
considered
that
there
was
no
satisfactory
market
data
available
on
which
to
base
an
opinion
by
comparisons
either
as
to
the
value
of
the
land
in
the
case
of
the
cost
approach
or
as
to
the
value
of
the
property
as
a
whole
in
the
comparative
approach.
He
proceeded
to
estimate
the
value
of
the
building
and
aprons
alone
by
a
cost
approach
and
to
estimate
the
value
of
the
property
as
a
whole
by
two
income
approaches
and
then
to
estimate
it
as
well
by
reference
to
the
offer
of
$150,000
made
as
above
mentioned
about
a
year
after
the
material
date.
Of
these
methods,
he
preferred
the
first
income
approach
as
offering
the
best
indication
of
value
and
as
being
open
to
less
chance
of
error
than
the
other
approaches.
By
it,
he
reached
the
figure
of
$122,500
previously
mentioned.
Of
the
other
two
methods,
one
resulted
in
a
lower
and
the
other
in
a
higher
valuation.
Mr.
Davis’s
estimate
of
the
depreciated
value
of
the
building
and
aprons
was
$17,300,
and
to
reach
this
figure
he
deducted
depreciation
at
the
rate
of
214
per
cent
per
annum
from
the
times
of
construction
of
the
several
portions
of
the
building
and
aprons.
In
making
his
calculation
by
the
first
income
approach,
Mr.
Davis
assumed
that
an
oil
company
considering
the
purchase
of
the
property
would
estimate
on
the
basis
of
sales
of
not
less
than
500,000
gallons
per
annum
at
a
rental
equivalent
to
112
cents
per
gallon,
and
that
it
would
expect
to
let
the
lunchroom
at
$1,800
per
annum.
It
could
thus
expect
a
gross
annual
revenue
of
$9,300.
From
this,
he
deducted
$1,300
for
estimated
taxes
and
maintenance,
$1,186
in
respect
of
return
of
capital
and
interest
on
the
investment
in
service
station
equipment,
and
$1,384
in
respect
of
annual
depreciation
and
interest
calculated
on
the
depreciated
value
of
the
building
and
aprons
as
previously
estimated
by
him
on
the
cost
approach
basis.
This
left
annual
net
income
of
$2,570
attributable
to
the
land
alone,
which,
capitalized
at
5.5
per
cent,
gave
the
value
of
$98,700
for
the
land.
To
this,
he
added
$17,300
for
the
value
of
the
building
and
aprons
for
a
total
of
$116,000
but
deducted
$5,000
on
the
ground
that
a
prudent
purchaser
would
want
to
pave
the
grounds
immediately.
As
part
of
his
estimate
he
also
adopted
a
value
of
$11,501
placed
by
another
appraiser
on
certain
equipment
of
the
service
station
and
lunchroom,
and
this,
with
the
$111,000
in
respect
of
the
land
and
building,
makes
up
the
$122,500
which
he
estimated
as
the
value
of
the
property.
Most
of
the
items
of
equipment
making
up
the
$11,501
were
not
part
of
the
realty,
and
it
was
not
contended
that
the
whole
of
this
sum
should
be
included
in
the
value
of
the
property.
Counsel
for
the
respondent
submitted
that
$1,600
of
this
amount
should
be
included,
which
with
the
$111,000
estimated
as
above
mentioned
makes
up
the
$112,600
which
he
contended
was
the
value
of
the
property.
Counsel
for
the
appellant
criticizes
Mr.
Davis’s
opinion
as
being
based
on
many
variables.
In
particular,
he
attacks
the
use
of
11
instead
of
114
cents
per
gallon
to
determine
the
anticipated
rental.
It
may
be
noted
that
on
Mr.
Davis’s
method
of
calculation
the
difference
of
one-quarter
cent
would
account
for
$1,250
in
annual
rental
and
$22,700
(in
rounded
figures)
in
the
total
value
of
the
property.
He
also
challenges
the
inclusion
of
$1,800
per
year
as
lunchroom
rental
and
the
capitalization
of
the
net
income
attributable
to
the
land
at
the
rate
of
5.5
per
cent.
In
my
opinion,
the
true
value
of
the
property
on
July
13,
1953,
lies
somewhere
between
the
estimates
of
these
two
appraisers.
While
I
think
the
alternative
course
of
buying
an
unproved
site
and
setting
up
a
new
station
at
lower
cost
might
well
be
a
consideration
operating
as
a
control
on
the
amount
that
might
be
offered
for
a
proven
outlet,
I
do
not
think
that
the
cost
of
new
sites
affords
a
satisfactory
basis
for
comparison.
Nor
do
I
think
that
the
sales
cited
by
Mr.
Laffey
are
comparable
with
the
hypothetical
transaction
which
must
be
envisaged
in
putting
a
value
on
the
property
in
question.
In
some
of
the
cases
cited,
there
was
no
evidence
as
to
what
gasoline
sales
could
be
anticipated
at
the
respective
properties,
and
in
others,
while
the
price
may
have
been
bolstered
by
a
return
lease
to
the
vendor,
the
sale
was
no
more
than
a
part
of
the
vendor
‘s
method
of
financing
its
acquisition
of
new
outlets
for
its
products.
These
properties
were
not
for
sale
without
restriction,
and
accordingly
the
transactions
cited
afford
no
real
basis
for
comparison.
Moreover,
in
my
view
Mr.
Laffey’s
income
approach,
based
as
it
is
on
average
gallonage
of
gasoline
sold
rather
than
on
such
sales
plus
an
estimate
of
what
the
figure
could
reasonably
be
expected
to
reach
in
the
very
near
future,
is
unrealistic
in
view
of
the
fact
that
the
gallonage
had
been
increasing
steadily
before
Ambrose
O’Brien
died.
These
considerations
lead
me
to
conclude
that
Mr.
Laffey’s
estimate
is
too
low.
Mr.
Davis’s
estimate
is
predicated
on
the
supposition
that
an
oil
company
would
be
eager
to
acquire
the
station
in
view
of
its
high
gallonage
of
gasoline
sales.
This
assumption
is,
I
think,
fully
warranted,
and
I
think
he
is
also
warranted
in
his
assumption
that
an
oil
company
would
base
its
estimate
of
what
it
would
pay
for
the
station
on
expected
potential
sales
of
not
less
than
500,000
gallons
of
gasoline
per
year.
Whether
or
not
it
would
also
calculate
the
price
it
would
pay
on
an
expected
rental
equivalent
to
112
cents
a
gallon
is
a
question
of
greater
difficulty,
but
on
the
whole
I
think
this
assumption
as
well
was
warranted.
There
is
evidence
that
the
relation
of
rental
to
gasoline
sales
varies
according
to
the
proportion
sales
of
gasoline
bear
to
sales
of
other
products,
and
that
for
a
station
of
this
kind,
where
eighty-five
to
ninety
per
cent
of
sales
are
sales
of
gasoline,
114
cents
would
have
been
a
maximum
rental
in
July,
1953.
However,
in
its
eagerness
to
acquire
the
outlet
I
think
an
oil
company
might
well
consider
that
a
revenue
equivalent
to
112
cents
per
gallon
could
be
obtained
from
the
station.
On
the
other
hand,
I
am
far
from
satisfied
that
any
oil
company,
in
contemplating
the
purchase
of
this
property
and
calculating
what
it
would
pay
to
get
the
property
on
the
basis
of
its
proven
and
potential
gallonage,
would
increase
the
amount
so
arrived
at
by
any
substantial
sum
in
respect
of
anticipated
revenue
from
an
unproved
lunchroom.
While
the
lunchroom
was
apparently
making
sales
to
the
extent
of
about
$1,000
per
week
up
to
July
13,
1953,
the
profit
shown
is
so
small
that
it
would
have
been
practically
eliminated
if
the
lunchroom
had
been
obliged
to
provide
a
rental
of
$1,800
a
year.
Mr.
Potten,
one
of
the
witnesses,
who
is
in
the
employ
of
an
oil
company,
made
it
clear
that
his
company
was
not
interested
in
the
lunchroom
portion
of
the
property,
and
I
see
no
reason
on
the
evidence
to
assume
that
an
oil
company
would
pay
in
respect
of
the
lunchroom,
by
way
of
an
increase
upon
what
it
would
pay
for
the
property
if
the
lunchroom
were
not
there
at
all,
anything
more
than
such
additional
value
as
might
be
attributed
to
the
lunchroom
portion
of
the
building
alone,
with
nothing
additional
for
the
site.
I
doubt
that
an
oil
company
would
predict
revenue
from
the
lunchroom
in
excess
of
what
would
carry
the
expenses
and
depreciation
of
that
portion
of
the
building,
and
I
do
not
think
that
an
oil
company
would
invest
its
capital
in
the
lunchroom
on
the
basis
of
an
anticipated
return
of
5.5
per
cent
per
annum
on
its
investment
plus
212
per
cent
depreciation
calculated
on
the
depreciated
value
of
that
portion
of
the
building.
What
an
oil
company
might
endeavour
to
get
as
a
rental
for
the
lunchroom
after
acquiring
the
property
is,
of
course,
another
matter
entirely.
Consequently,
in
my
opinion
the
estimate
made
by
Mr.
Davis
is
too
high.
At
the
argument,
counsel
for
the
respondent
very
fairly
submitted
that
the
real
significance
as
evidence
in
this
case
of
the
offer
of
$150,000
is
to
demonstrate
the
unreasonableness
of
a
valuation
of
$43,000
for
what
was
approximately
the
same
property
only
one
year
earlier.
With
respect,
I
think
this
is
the
correct
significance
to
attach
to
the
evidence
of
the
offer
and
that
it
does
show
that
the
value
of
the
property
was
not
merely
more,
but
substantially
more,
than
$43,000.
On
the
other
hand,
save
in
respect
of
the
inclusion
of
what
I
think
is
too
high
a
revenue
in
respect
of
the
lunchroom
and
the
projection
of
such
revenue
into
an
additional
value
to
the
land,
I
think
the
estimates
and
calculations
on
which
Mr.
Davis’s
opinion
is
based
are
well
founded.
The
depreciated
value
of
the
portion
of
the
building
used
as
a
lunchroom,
office,
and
storeroom
was
estimated
by
Mr.
Davis
at
$8,200.
How
much
of
this
is
attributable
to
office
and
storeroom
and
how
much
to
lunchroom
does
not
appear,
but
in
my
opinion
a
reasonable
rental
for
the
whole
of
it
would
not
exceed
$1,000
a
year,
of
which
some
portion
would
be
attributable
to
the
office
and
storeroom
and
would
be
included
in
the
112
cents
per
gallon
rental.
If
$750
of
this
were
ascribed
to
the
lunchroom,
the
difference
between
that
amount
and
the
figure
of
$1,800
used
by
Mr.
Davis
would
be
$1,050
and
would
account
for
$19,090
of
his
estimate
of
the
value
of
the
land.
Taking
Mr.
Davis’
valuation
of
$111,000
as
a
starting
point
and
applying
the
considerations
mentioned,
I
think
a
reduction
of
$19,100
is
justified
in
the
circumstances
and
that
the
value
of
the
property
without
the
fixtures
on
July
13,
1953,
was
$91,900.
and,
with
the
fixtures
included,
should
be
set
at
$93,500.
The
appeal
will
be
allowed
and
the
assessment
reduced
accordingly.
While
the
appellant
has
not
succeeded
in
establishing
the
value
alleged
in
the
statement
of
claim,
the
appeal
was
necessary
and
has
been
successful
to
a
substantial
extent
in
bringing
about
a
reduction
of
the
assessment
made
by
the
respondent.
The
appellant
is,
therefore,
entitled
to
her
costs
of
appeal.
Judgment
accordingly.
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