Addy, J:—This appeal is against a decision of the Tax Review Board which upheld an income tax assessment made by the Minister of National Revenue against the plaintiff for the year 1975. There are two matters in issue: the first one concerns the disallowance of a claim for $1,024.30 claimed by the plaintiff as moving expenses and the second one, the sum of $1,490.48 disallowed as a trading loss for certain shares sold during the year.
As to the first point, the plaintiff, as an employee of the Department of National Revenue, moved from Montreal to Ottawa during the year. He claimed and received from the Department certain expenses for moving which are not in issue. The expenses in issue in this case are those which the plaintiff incurred for room and board and other incidental out-of-pocket expenses of his son who completed his high school studies in Montreal before going to college rather than to come to Ottawa to complete the final year. A total amount of $2,500 at $250 per month was actually paid to a former neighbour of the plaintiff in Montreal where the son resided while completing his studies. $1,000 of this was expended during 1975 and this sum is the subject of the present appeal together with an amount of $24.50 paid to Bell Canada for a telephone for the son during that period.
There is no question but that it was greatly to the advantage of the son, who was a brilliant student, to complete his studies in Montreal at that stage rather than to transfer to the Ontario school system in his final year of high school.
The family moved at the end of July to Ottawa and the son came with them. His possessions were moved to Ottawa at the time and he resided with them there in his own room until Labour Day when he returned to Montreal in order to attend his final year of high school as above mentioned.
It is worthy of note that the plaintiff claimed and was reimbursed for the moving expenses of the son to Ottawa in July including meals and accommodation during the moving period. The issue is simply whether the above-mentioned sum of $1.024.50 was “paid by him on account of moving expenses incurred in the course of the moving from his old residence to his new residence’’ as provided for in paragraph 62(1 )(b) of the Income Tax Act, RSC 1952, chapter 148, as amended by section 1 of SC 1970-71-72, chapter 63. and. therefore, whether he can claim this amount as an expense for income tax purposes. Subsection (3) of that section reads as follows:
62. (3) In subsection (1), “moving expenses’’ includes any expense incurred as or on account of
(a) travelling costs (including a reasonable amount expended for meals and lodging), in the course of moving the taxpayer and members of his household from his old residence to his new residence,
(b) the cost to him of transporting or storing household effects in the course of moving from his old residence to his new residence,
(c) the cost to him of meals and lodging near the old residence or the new residence for the taxpayer and members of his household for a period not exceeding 15 days,
(d) the cost to him of cancelling the lease, if any, by virtue of which he was the lessee of his old residence, and
(e) his selling costs in respect of the sale of his old residence.
From this subsection it seems abundantly clear that the words “moving expenses’’ mean the expenses incurred in physically moving and in actually changing residence and certain other very specific expenses relating directly to the actual move and reinstallation and do not mean an amount to compensate for incidental disturbances or damages not related to the actual move and reinstallation in the new residence.
Furthermore, it would be stretching inordinately the ordinary meaning which one would normally attribute to the expression “moving expenses’’ if one were to include the living and tuition fees for the son for the year following the move.
Were I not disallowing this part of the appeal on the above grounds. I would disallow it on the grounds that the plaintiff had failed to discharge the onus cast upon him of establishing how much of the said sum of $1.024.50 was actually incurred by reason of the move, for it is obvious, and it was fully admitted, that the plaintiff would have had to pay something for his son’s food and incidental expenses even if they had not moved. No attempt was made to establish this. Also no allowance was made for the amounts actually received for the move of the son and for his meals and accommodation, at the end of July. The plaintiff is claiming the full amount paid the neighbour for the accommodation, food and incidental expenses of the son without taking any of the above matters into consideration. It is obvious that if the plaintiff were entitled to the expenses it would only be those additional expenses actually caused by the move. The onus is on the taxpayer to establish them.
On the second issue, namely the question of whether the sum of $1,490.48 can be claimed as a trading loss. the evidence established that the plaintiff did on March 24, 1975 purchase some common shares of a public company which shares were listed on the stock market and were subsequently sold on March 6. 1975 at a loss of $1,490.48.
In his income tax return he claimed that loss as a capital loss and therefore did not object to being assessed accordingly. He also failed to claim the amount as a loss of income before the Tax Review Board and raised the matter in this present appeal for the first time.
The plaintiff, a chartered accountant by profession, was promoted in 1975 to the position of Senior Appeals Officer in the Taxation Appeals Division at the Department of National Revenue. It was as a result of this appointment that he moved to Ottawa in that year. He had been employed by the Department since 1954 and for several years previously in Montreal as an assessor and more recently as a group head of assessors by the same Department.
His evidence was that when he purchased the shares in March 1975 he wished to realize a quick profit. He testified that he was not certain that he was going to move to Ottawa at that time as the move depended on the measure of his success in the departmental competition for the position, but felt that he would likely succeed. He stated that his decision to purchase the common shares in issue resulted from certain special information as to the probability of certain benefits being granted the company by the Government of British Columbia. As a result, he invested in the shares hoping to realize a quick profit. These benefits did not materialize and the loss occurred.
He testified that the reason why he did not originally claim the loss as a revenue loss was that the general policy of the Department up until quite recently was not to allow a person who was not a stockbroker or a professional trader to do so and he stated that he had only heard of the change of policy after his appeal to the Tax Review Board had been launched.
It is difficult for me to conceive how anyone, with the professional qualifications of the plaintiff and his experience since 1954 in the specific field of income tax assessment, could be so naïve as to believe that a taxpayer’s liability for assessment depended on departmental policy.
Be that as it may, although a subsequent decision to claim a loss under one heading or another cannot change the taxpayer’s intention as it existed at the moment of the purchase of the asset, it is certainly one of the surrounding circumstances which may be taken into account in determining that intention.
It is clear that the expressed intention of the taxpayer is not the sole determining factor in deciding under which category the transaction must fall. Refer Irrigation Industries Limited v MN Ft, [1962] S.C.R. 346 at 355; [1962] CTC 215 at 230; 62 DTC 1131 at 1138, where the singleness of isolation of a transaction, although it may at times be an important factor, is not by itself a determining one. An isolated transaction can constitute an adventure in the nature of trade and the profit or loss resulting therefore can be treated as revenue. Refer MNR v James A Taylor, [1956] CTC 189 at 211 ; 56 DTC 1125 at 1137.
In the case at bar, although the plaintiff had invested in the stock market on several occasions in the years previous to 1973, he made no investment in 1973 or 1974. During 1975 he only made the one investment which is the subject matter of this appeal. He made no investment in 1976 but did make some investments in 1977.
At page 351 [219, 1133] of the above-mentioned report of the Irrigation Industries case, Martland, J, in delivering the decision of the majority of the Supreme Court of Canada, stated:
I cannot agree that the question as to whether or not an isolated transaction in securities is to constitute an adventure in the nature of trade can be determined solely upon that basis. In my opinion, a person who puts money into a business enterprise by the purchase of the shares of a company on an isolated occasion, and not as a part of his regular business, cannot be said to have engaged in an adventure in the nature of trade merely because the purchase was speculative in that, at that time, he did not intend to hold the shares indefinitely, but intended, if possible, to sell them at a profit aS soon as he reasonably could. I think that there must be clearer indication of “trade" than this before it can be said that there has been an adventure in the nature of trade. As Scott, LJ, said, when delivering the judgment of the Court of Appeal in Barry v Cordy, [1946] 2 All ER 396 at 400:
“That a single transaction may fall within Case 1 is clear; but, to bring it within, the transaction must bear clear indicia of ‘trade’; eg, Martin v Lowry (1925), 11 TC 297—the single purchase of a vast quantity of linen for re-sale; or Rutledge v Commissioners of Inland Revenue (1929), 14 TC 495, where there was a single purchase of paper. Unless ex facie the single transaction is obviously commercial, the profit from it is more likely to be an accretion of capital and not a yield of income."
There is, in my view, much less likelihood of an isolated investment in the common stock of a company listed on the stock market being considered an adventure in the nature of trade than a truly commercial adventure or enterprise such as that considered in the case of MNR v Taylor (supra). In the latter case, the taxpayer was conducting and organizing the adventure or enterprise and was making personal decisions in relation thereto while in the present case he is merely making an investment and has in fact little or no control over its success or failure and is by no means the master of the adventure or enterprise.
The cases of Charles-Léon Moquin v MNR, [1963] CTC 55; 63 DTC 1037, and Donald Preston McLaws v MNR (No 1), 37 Tax ABC 132; 65 DTC 1, are typical examples of a stock investment being considered of a capital nature even though the taxpayer had made repeated investments in common stocks on the market. On the other hand, in the case of Harold Donald Smith v MNR, [1973] CTC 714; 73 DTC 5526, continued repeated investments in common stock resulted in the taxpayer being considered as engaged in the business of trading shares because in the year in question, namely the taxation year 1969, he did, contrary to his conduct in the former years, begin carrying out a systematic scheme for profit-making purposes.
Although each case obviously must be decided on its own facts, I agree with the remarks of counsel for the defendant that the conduct of the plaintiff in the present case is akin to that of the earlier years of the taxpayer in the Smith case (supra) where his investments in the stock market were considered to be of a capital nature.
The one case which I could find where an isolated purchase of common shares on the stock market was held to constitute an adventure in the nature of a trade is the decision rendered by my brother Collier, J in the case of Sydney Bossin v Her Majesty the Queen, [1976] CTC 358; 76 DTC 6196. That case, however, is easily distinguishable on the facts as one of the main reasons for the decision was the extent and nature of the borrowing which the taxpayer was engaged in in order to be able to purchase the shares. At page 364 [6200] the learned judge states:
In my view, the subjective statements of intention here are not without support from the other evidence. The funds were borrowed. That is not unusual. But here they were obtained in a most unusual way, on unusual and speculative terms, and with a firm deadline for ultimate settlement of accounts: pay Kosoy his money, interest, and 50% of the gains, if any.
There was no evidence of any speculative borrowing in the present case. Furthermore, in the Bossin case (supra), as it is to be noted from the above extract, the circumstantial evidence confirmed the Subjective evidence of the taxpayer.
In considering all of the circumstances of the present case, I cannot conclude that the evidence established the assessment of the loss as a capital loss to be incorrect.
The appeal is dismissed with costs and the original assessment is confirmed.