Muldoon
J.:—The
matter
in
issue
between
the
parties
in
this
case
is
the
value
of
the
full
complement
of
all
the
issued
and
outstanding
100
shares
of
Pyramid
Management
Ltd.
(Pyramid)
owned
by
the
plaintiff
before,
during
and
after
the
Valuation
Day,
December
31,
1971.
First,
however,
there
is
the
matter
of
this,
or
any,
Court's
jurisdiction
to
entertain
this
appeal
by
way
of
trial
de
novo
pursuant
to
the
Income
Tax
Act,
a
matter
raised
by
the
Court
ex
mero
motu.
Counsel
on
both
sides
were
notified
of
this
preliminary
question
prior
to
the
Court's
session.
The
plaintiff's
aborted
appeal
to
the
Tax
Review
Board
was
dismissed
for
want
of
prosecution.
According
to
the
Board's
judgment
no.
80-360
signed
on
January
6,
1982,
by
the
presiding
Board
member,
John
B.
Goetz,
Esq.,
Q.C.,
neither
the
taxpayer
(the
plaintiff
herein)
nor
any
counsel
on
his
behalf
attended
before
the
Board
on
the
appointed
day,
although
the
taxpayer's
solicitors
were
duly
notified.
According
to
the
testimony
of
the
plaintiff's
former
solicitor
and
counsel
of
that
time,
Jochen
D.A.
Struck,
of
the
Calgary
firm
of
Bell
Felesky
Flynn,
the
record
of
that
court
of
record,
the
Tax
Review
Board,
as
it
used
to
be,
is
simply
wrong.
Mr.
Struck
testified
that
although
he
had
been
unable
to
contact
his
former
client,
the
present
plaintiff,
in
order
to
ascertain
his
instructions,
Mr.
Struck
really
did
attend
the
“roll
call”
of
the
Board
on
Monday,
December
14,
1981.
Exhibit
1
consists
of
the
loose-leaf
pages
of
a"
Day-Timers"
diary
spanning
Saturday,
December
12,
1981
to
Tuesday,
December
15,1981.
Under
the
heading
"to
be
done
today"
item
2
is"Attridge
appeal
to
TRB”
with
a
check-mark,
and
to
its
right,
under
"appointments
&
scheduled
events"
is
the
notation
“Attend
at
TRB”
with
a
similar
check-mark.
Those
check-marks,
according
to
Mr.
Struck,
indicate
that
he
had
attended
to
the
matters
itemized.
Exhibit
2
is
a
memo
to
his
own
file,
dictated
by
Mr.
Struck,
he
swears,
before
he
attended
at
the
Tax
Review
Board,
on
December
14,
1982.
It
refers
to
two
attempts,
by
Mr.
Struck,
“to
telephone
Mr.
Attridge
both
at
the
Hawaii
number
as
well
as
at
the
Cayman
number”.
Mr.
Struck
tried
again
that
morning
to
no
avail
and
thereupon
noted:
"I
will
therefore
proceed
to
the
hearing
of
this
matter
on
the
basis
that
I
have
no
instructions
and
have
been
unable
to
reach
Mr.
Attridge."
Exhibit
3
is
a
letter
from
the
Deputy
Registrar
of
the
Tax
Review
Board
stating
that
enclosed
is
"a
copy
of
formal
Judgment
in
the
above-noted
appeal”.
That
judgment
is
found
in
the
dossier
forwarded
to
this
Court,
and
its
operative
passages
run
as
follow:
Whereas
the
appellant
was
not
present
when
the
appeal
was
called
[Dec.
14/81,
in
Calgary],
although
duly
notified
of
the
time
and
place
of
the
hearing,
And
whereas
no
one
appeared
on
his
behalf,
And
whereas
counsel
for
the
respondent
thereupon
moved
for
dismissal
of
the
appeal,
It
is
therefore
ordered
and
adjudged
that
the
appeal
in
respect
of
the
1974
and
1976
taxation
years
be
and
the
same
is
hereby
dismissed.
Now,
given
Mr.
Struck's
testimony
to
the
effect
that
he
appeared
before
the
Board,
at
least,
although
he
does
not
now
remember
what
oral
representations
he
expressed,
it
does
seem
remarkable
that
the
Board
erred
in
such
an
obvious
observation
as
to
the
presence
or
absence
of
counsel
before
the
tribunal.
Even
more
remarkable
is
that
Mr.
Struck
simply
transmitted
copies
of
the
registrar's
letter
and
the
judgment
(Exhibit
4)
to
Mr.
Attridge
at
Grand
Cayman
on
January
15,
1982,
without
some
comment
to
the
effect
that
he,
Jochen
Struck,
had
never
abandoned
his
client,
Mr.
Attridge,
and
that
the
Tax
Review
Board's
judgment
was
radically
wrong
on
that
score.
Mr.
Struck
remarkably
just
transmitted
the
copies,
without
any
comment
of
that
nature
or
at
all.
Mr.
Attridge’s
response,
Exhibit
5,
was
prompt,
dated
February
8,
1982,
and
most
definite
in
expressing
an
uninterrupted
intention
to
prosecute
his
appeal.
Its
salient
passages
run
as
follow:
Your
letter
of
January
15,
1982
enclosing
the
default
judgment
came
as
a
complete
surprise.
I
have
no
correspondence
from
your
office
since
February
24,
1987.
Please
make
an
immediate
notice
of
motion
to
set
aside
the
default
judgment
supported
by
my
sworn
affidavit
that
I
was
not
aware
of
the
proceedings.
I
can
only
guess
what
may
have
happened.
1.
Your
office
was
not
notified
or
your
mail
room
didn't
forward
it
(not
your
personal
fault)
2.
The
people
mailing
out
letters
to
me
from
your
office
never
put
on
adequate
postage.
Special
rates
apply
to
the
Caribbean.
I
suspect
you
will
get
it
returned
soon.
.
.
.
[etc.
etc.]
.
.
.
My
performance
[sic]
of
the
file
speaks
for
itself.
I
have
been
agressive
[sic],
answered
all
correspondence
promptly,
paid
all
accounts
on
receipt
of
invoice.
My
attorneys
here
will
help
me
complete
any
supporting
documents
you
may
need.
Please
make
a
note
of
my
telephone
numbers.
They
can
all
be
dialled
direct.
|
Grand
Cayman
|
1
|
(809).
.
.
|
|
Miami
|
1
|
(306).
.
.
|
|
Costa
Rica
|
011
|
(506)
.
.
.
|
I
have
made
many
attempts
to
keep
this
file
going
to
a
conclusion.
I
will
await
your
reply.
No
telephone
number
in
Hawaii
is
mentioned.
Mr.
Struck
testified
that
none
of
his
correspondence
addressed
to
Mr.
Attridge
had
ever
been
returned.
Clearly
Mr.
Struck
believed,
despite
the
recording
of
his
absence
and
the
abandonment
of
Mr.
Attridge’s
appeal
in
the
judgment
of
that
court
of
record,
the
Tax
Review
Board,
without
any
effort
on
counsel's
part
to
have
the
record
corrected,
that
Mr.
Attridge
could
press
on
to
have
a
trial
de
novo
in
this
Court
even
although,
because
of
that
record
and
reality
of
apparent
abandonment
of
rights,
there
never
was
a
trial
de
initio,
so
to
speak.
Mr.
Struck
thereupon
wrote
to
Mr.
Attridge,
on
February
22,
1982,
expressing,
inter
alia,
these
two
pertinent
paragraphs:
There
is
no
requirement
for
you
at
present
to
prepare
a
sworn
affidavit
with
respect
to
the
Judgment
of
the
Tax
Review
Board.
The
procedure
is
to
institute
an
Appeal
to
the
Federal
Court
of
Canada-Trial
Division
by
the
filing
and
service
of
a
Statement
of
Claim
or
Declaration.
The
format
of
these
pleadings
is
essentially
the
same
as
the
format
of
the
pleadings
used
in
the
Appeal
to
the
Tax
Review
Board.
We
have
computed
the
limitation
date
on
or
before
which
this
document
must
be
filed
to
be
May
12,
1982.
Generally
speaking,
a
different
lawyer
(usually
from
Ottawa)
is
assigned
the
conduct
of
the
file
and
therefore
affords
us
an
opportunity
of
again
attempting
to
reach
a
settlement.
If
no
settlement
is
possible
then
you
have
the
option,
of
course,
to
proceed
to
a
trial
of
this
matter.
It
has
been
said
that
since
the
taxpayer
could
have
elected
to
launch
his
appeal
directly
in
this
Court,
what
does
it
matter
that
he
abandoned
and
aborted
his
right
of
appeal
before
the
Tax
Review
Board?
Mr.
Struck
computed
that
the
action
did
not
have
to
be
commenced
in
this
Court
then
until
May
22,
1982,
whereas
if
the
taxpayer
Attridge
had
elected
to
launch
his
appeal
directly
before
this
Court
he
would,
under
subsection
172(2),
have
had
no
more
time
to
do
so
than,
under
section
169,
he
could
have
taken
to
initiate
his
appeal
to
the
Tax
Review
Board.
So
the
effect
of
what
is
contended
by
counsel
here,
is
that
taxpayers
who
have
simply
aborted
their
appeals
before
coming
on
for
adjudication
by
the
Board
can
simply
wrench
more
time
for
manoeuvring
out
of
the
appeal
system
than
Parliament
provided
or,
obviously,
ever
intended
to
accord
to
them.
In
that
regard,
it
appears
that
Parliament
never
intended
to
accord
the
right
to
carry
on
with
a
resurrected
appeal
in
this
Court
after
abandoning
that
right
through
futile
procedures
in
and
before
the
Tax
Review
Board.
A
second
effect,
quite
counterproductive
to
the
administration
of
justice,
of
which
both
counsel
made
no
admissions
but
had
knowledge,
is
that
some
counsel
practice"
judge-shopping"
by
deliberately
aborting
the
taxpayer's
right
of
appeal
to
the
Board,
believing
they
can
blithely
start
afresh
by
trial,
allegedly,
de
novo.
Counsel
for
each
party
here
supported
the
Court's
jurisdiction
to
entertain
the
plaintiff's
action
here.
Of
course,
jurisdiction
cannot
be
conferred
by
consent.
The
relevant
legislative
texts
provided:
171.
(1)
Disposal
of
appeal.—The
Board
may
dispose
of
an
appeal
by
(a)
dismissing
it,
or
(b)
allowing
it
and
(i)
vacating
the
assessment
(ii)
varying
the
assessment,
or
(iii)
referring
the
assessment
back
to
the
Minister
for
reconsideration
and
reassessment.
It
would
appear
that
paragraph
171
(1)(b)
permits
the
Board
to
allow
an
appeal
clearly
on
the
merits.
It
would
also
appear
that
paragraph
171(1)(a)
is
enacted
ejusdem
generis,
and
that
it
provides
for
a
dismissal
equally
on
the
merits,
for
certainly
no
dismissal
for
want
of
prosecution
or
for
abandonment
of
the
right
is
provided
in
the
Income
Tax
Act.
Where
Parliament
did
provide
for
dismissal
otherwise
than
by
adjudication
on
the
merits,
as
in
subsection
171(2),
it
could
not
be
contended
by
counsel
that
such
a
dismissal
would
ever
serve
to
vest
this
Court
with
jurisdiction
to
entertain
the
taxpayer's
institution
of
an
action
on
appeal
by
trial
de
novo.
Subsection
171(4)
provides
that
upon
the
disposition
(curiously,
not
"disposal")
an
appeal
the
Board
must
forthwith
furnish
"a
copy
of
the
decision
and
any
written
reasons
therefor
to
the”
parties.
Subsection
172(1)
provided
this:
(1)
The
Minister
or
the
taxpayer
may,
within
120
days
from
the
day
on
which
the
Registrar
of
the
Tax
Review
Board
mails
the
decision
on
appeal
under
section
169
to
the
Minister
and
the
taxpayer,
appeal
to
the
Federal
Court
of
Canada.
What
means
it,
"the
decision
on
appeal
under
section
169”?
Section
169
provided
for
an
"appeal
to
the
Tax
Review
Board”.
There
was
no
"decision
on
appeal”,
because
there
was
no
appeal,
and
the
record
of
a
court
of
record
disclosed
that
no
one
appeared
as
or
for
the
taxpayer.
No
objection
or
attempt
to
“correct”
that
state
of
the
record
was
made.
It
was
treated
with
apparent
equanimity
until
much
later
when
this
Court
sought
to
rely
on
that
record,
as
is
entirely
normal.
In
such
circumstance
it
would
be
not
too
difficult
to
hold
that
the
taxpayer,
by
his
own
default,
or
that
of
his
solicitors
and
counsel,
had
simply
obviated
his
right
to
"appeal
to
the
Federal
Court
of
Canada”,
pursuant
to
subsection
172(1).
It
is
only
with
doubt
and
hesitation,
despite
the
apparently
untroubled
and
confident
submissions
by
counsel
on
both
sides,
that
the
Court
permits
the
impugned
appeal
to
proceed.
The
trial
was
held
on
April
25
through
28,
1989,
in
Calgary.
Written
arguments
were
submitted
by
counsel
on
each
side,
the
exchange
of
which
was
closed
on
December
8,
1989,
when
the
defendant's
counsel
notified
the
Court
that
he
would
not
submit
any
surreply.
A
statement
of
agreed
facts
was
submitted
by
the
respective
counsel
and
it
is
exhibited
in
both
proceedings
as
Exhibit
8.
That
statement,
Exhibit
8,
in
its
pertinent
parts
runs
as
follows:
2.
The
Taxpayer
owned
100
shares
of
Pyramid
Management
Ltd.
(”
Pyramid”),
being
all
of
the
issued
and
outstanding
shares
thereof,
prior
to
the
Valuation
Day,
December
31,
1971,
and
continued
to
own
these
shares
until
February
of
1974.
3.
The
assets
of
Pyramid
consisted
of
a
trucking
business,
operating
under
the
name
and
style
of
"Bow
Valley
Transport",
as
well
as
certain
rental
properties.
4.
In
February
of
1974,
the
Taxpayer
sold
50
of
the
100
shares
of
Pyramid
held
by
him
to
Burns
Foods
Ltd.
("Burns"),
for
$500,000.00.
The
sale
of
shares
of
Pyramid
specifically
excluded
the
value
attributable
to
the
rental
properties.
The
rental
properties
were:
1139
Cameron
Avenue
S.W.,
Calgary
1133
Cameron
Avenue
S.W.,
Calgary
352-8
Avenue
N.W.,
Calgary
and
had
a
fair
market
value
at
the
time
of
$133,600.
The
Share
Sale
Agreement
between
Edward
James
Attridge
and
Burns
Foods
Ltd.,
dated
February
25,
1974,
by
Clause
4(m)
required
that
these
rental
properties
be
sold
by
Pyramid
and
the
proceeds
of
the
sale
distributed
to
the
Taxpayer
in
dividends
prior
to
Closing.
5.
In
December
of
1976,
the
Taxpayer
sold
the
remaining
50
shares
of
Pyramid
to
Burns
for
a
further
$500,000.00.
6.
The
Taxpayer's
1974
Income
Tax
Return
was
prepared
by
MacGillivray
&
Co.
and
filed
approximately
April
27,
1975.
In
reporting
in
1974
disposition
of
the
shares
of
Pyramid,
the
Taxpayer
reported
an
adjusted
cost
base
for
the
50
shares
of
$450,000.00,
or
$9,000.00
per
share.
7.
The
Taxpayer's
1976
Income
Tax
Return
was
prepared
by
MacGillivray
&
Co.
In
reporting
the
1976
disposition
of
the
shares
of
Pyramid,
the
Taxpayer
reported
an
adjusted
cost
base
for
the
50
shares
of
$450,000.00,
or
$9,000.00
per
share.
8.
By
Notices
of
Reassessment
dated
October
5,
1979,
the
Minister
of
National
Revenue
revised
the
adjusted
cost
base
on
the
dispositions
of
50
shares
to
$127,250.00
less
$41,048.12
in
dividends
or
approximately
$1,724.04
per
share.
9.
The
Taxpayer
filed
Notices
of
Objection
to
these
Re
Assessments
on
or
about
January
4,
1980,
and
waived
reconsideration
of
the
Reassessment
by
the
Minister.
During
the
course
of
the
trial
(transcript:
vol.
IV,
pages
670-77)
the
defendant's
counsel
sought
to
amend
the
two
statements
of
defence
in
these
actions,
in
order
that
they
conform
with
the
evidence
he
was
about
to
adduce.
The
amendments
were
not
formulated
to
prejudice
the
plaintiff,
and
indeed
expressed
minor
concessions
in
favour
of
the
plaintiff
and
were
accordingly
allowed.
Their
effect
would
be
to
insert
two
new
paragraphs
in
each
statement
of
defence,
thus:
7.1
The
fair
market
value
of
the
100
shares
of
Pyramid
Management
Ltd.
on
December
31,
1971
did
not
exceed
$2,000
per
share
an
amount
which
exceeded
the
actual
cost
of
the
said
shares
to
the
plaintiff.
and
10.
The
plaintiff's
appeal
ought
to
be
allowed
only
to
the
extent
that
the
fair
market
value
of
the
shares
on
December
31,
1971,
was
$2,000
each.
Thus,
the
plaintiff
is
assured
of
achieving
a
very
minor
degree
of
success
at
least
and
in
any
event,
because
in
paragraph
7(c)
of
the
statements
of
defence,
the
Minister
assumed
that
the
V-Day
fair
market
value
of
those
100
shares
was
$1,724.04
each.
A
fair
number
of
expert
witnesses
were
heard,
called
to
express
their
theories
which,
in
effect,
left
the
Court
with
much
speculation
and
little,
if
any,
solid
evidence.
Thus,
when
each
counsel
urges
the
Court
to
give
judgment
for
his
client
on
a
preponderance
of
evidence,
he
really
urges,
intentionally
or
not,
judgment
on
a
preponderance
of
speculation.
The
onus
is
upon
the
taxpayer
to
demonstrate
that
the
veracity
of
the
Minister's
assumptions,
of
which
the
crucial
one
is
that
which
now
places
the
Valuation
Day
fair
market
value
of
the
plaintiff's
100
Pyramid
shares
at
not
more
than
$2,000
per
share,
is
not
tenable.
The
Minister's
position
was
not
rendered
more
credible
or
secure
by
the
performance
of
his
borderline
"expert"
witness,
Gerald
Blake
Martin,
whose
purpose
was
"to
determine
the
fair
market
value
of
the
100
issued
and
outstanding
shares
of
Pyramid
.
.
.
as
of
December
31st,
1971"
(transcript:
vol.
IV,
page
701).
Mr.
Martin's
expertise
was
accepted
hesitantly
and
dubiously
by
the
Court
(transcript:
vol.
IV,
pages
699-700)
and
the
acceptance
of
his
report
noted
at
page
769,
as
Exhibit
57,
must
be
regarded
as
no
unqualified
endorsement.
Upon
reflection,
Mr.
Martin's
testimony
and
report
seem
to
evince
more
intrinsic
value
than
aid
to
the
parties
in
the
circumstances
of
this
litigation.
The
credibility
and
relevance
of
his
work
are
not
constant.
Because
he
was
put
forward
by
the
Crown
as
its
principal
expert
witness,
it
will
be
helpful
to
consider
what
counsel
on
each
side
had
to
say
about
Mr.
Martin's
impact
on
the
issues
to
be
resolved
in
their
respective
written
arguments.
For
the
plaintiff
taxpayer:
Consequently,
Mr.
Martin's
valuation
of
the
trucking
business
owned
by
Pyramid
would
be
in
the
range
of
$120,000.00
to
$150,000.00.
(See
pages
19
and
20
of
G.
Martin's
Valuation
Report,
Exhibit
#57).
At
the
conclusion
of
the
trial,
.
.
.
counsel
for
the
defendant,
requested
an
amendment
to
the
Defence
pleading,
which
was
intended
to
allow
the
taxpayer's
appeal
to
the
extent
of
accepting
a
value
of
$2,000.00
per
share
or
a
total
value
for
the
Pyramid
shares
of
$200,000.00.
This
was
done
so
that
the
Minister's
expert
evidence
would
support
the
Defence
pleading.
However,
if
the
Minister's
assessment
of
$172,404
contained
in
Exhibits
12
and
14
excludes
the
rental
properties
(accounting
for
the
reduction
in
the
ACB
for
dividends
would
indicate
this),
then
the
opinion
of
the
defence
expert
does
not
support
the
assessments
and
is,
in
fact,
a
lower
valuation.
(pages
17
and
18)
6.
.
.
.
The
Court
has
before
it
two
positions
on
the
fair
market
value
of
Bow
Valley
on
V-Day.
The
position
of
the
Minister
in
his
reassessment
and
the
position
of
the
defendant
in
the
Pleadings,
was
that
the
value
attributable
to
this
trucking
business,
as
represented
in
the
shares
of
Pyramid
Management,
was
$172,404
or
the
expert's
figure
of
$120,000.00-$150,000.00.
On
clarification
it
may
be
that
[counsel]
intended
to
allow
the
appeal
to
the
extent
of
$200,000.00
representing
the
value
of
Bow
Valley
alone.
The
only
evidence
supporting
a
valuation
in
this
range
is
that
of
G.
Martin
whose
evidence
is
that
the
fair
market
value
of
the
Bow
Valley
trucking
business
was
$120,000.00-$150,000.00.
None
of
the
defendant's
other
witnesses,
and
certainly
none
of
the
plaintiff's
witnesses,
provided
one
shred
of
evidence
that
would
support
these
values.
The
bare
evidence
on
the
liquidation
value
of
Bow
Valley’s
assets
is
enough,
it
is
submitted,
to
satisfy
the
onus
on
the
taxpayer
to
demonstrate
on
the
balance
of
probabilities
that
the
Minister's
assessment
was
in
error.
(page
38)
For
the
Minister:
223.
[The
Minister
or
his
counsel]
agrees
with
the
comments
made
on
the
bottom
of
page
17
and
top
of
page
18
and
in
paragraph
6
on
page
38.
The
Minister's
assessment
of
a
revised
V-Day
adjusted
cost
base
of
$172,404.00
excluded
the
value
of
the
3
rental
properties
whose
value
had
been
distributed
as
dividends
out
of
the
tax
paid
undistributed
surplus
and
capital
surplus
on
hand
accounts
and
accordingly
reflected
only
the
value
for
Bow
Valley
Transport
Division
of
Pyramid
Man-
agement.
Mr.
Martin's
fair
market
value
conclusion
of
$200,000.00
for
the
shares
of
Pyramid
Management
of
V-Day
included
the
rental
properties.
Mr.
Martin's
determination
of
the
fair
market
value
of
the
Bow
Valley
Transport
Division
of
Pyramid
Management
is
set
out
in
page
17
and
is
for
a
lower
value
than
the
assessed
value.
As
the
Minister
cannot
appeal
from
his
own
assessment
no
amendment
to
the
pleadings
requesting
a
lower
value
could
be
made.
The
request
to
amend
the
pleadings
to
allow
the
Minister
to
lead
evidence
as
to
a
higher
value
more
favourable
to
the
plaintiff
and
to
allow
the
appeal
to
that
extent
was
improvidently
made.
However,
it
having
been
made,
and
allowed
counsel
does
not
seek
to
withdraw
it.
(page
43)
The
Minister's
other
expert
witness,
Judith
Ann
Crumb,
an
accredited
real
estate
appraiser
since
1984,
submitted
her
written
report,
which
was
received
as
Exhibit
50.
The
plaintiff's
counsel
made
no
objection
to
her
qualification
as
an
expert.
Ms.
Crumb
is
an
employee
of
the
Department
of
National
Revenue
and
she
was
assigned
the
duty
of
preparing
an
appraisal
of
the
pertinent
real
property
that
is,
its
market
value,
located
at
4134-16th
Street
S.E.,
corner
of
41st
Avenue
in
the
Bonnybrook-Ogden
Roads
district
of
Calgary,
as
of
December
31,
1971.
She
performed
that
difficult
task
in
January
1988.
Ms.
Crumb
appeared
to
be
candid
and
truthfully
forthright
in
her
testimony,
but
even
such
a
witness,
unless
she
recognizes
and
corrects
for
the
subconscious
bias
of
her
employment,
can
be
less
than
evenhanded
in
her
professional
conclusions.
A
very
minor
example
is
found
at
page
8
of
her
report,
Exhibit
50,
and
in
her
testimony
recorded
in
transcript:
vol.
Ill,
pages
643-44.
Having
found
that
the
comparable
bare
land
values,
in
her
estimation,
evinced
a
per-square-foot
sale-price
range
from
564
to
624,
she
did
not
apply
a
mid-range
value
of
594
per
square
foot
to
the
plaintiff's
land,
but
rather,
she
applied
the
lowest
value
of
that
range
and
came
up
with
a
value
of
$12,400,
with
odd
sums
rounded
upwards.
The
mid-range
value
of
594
would
have
yielded
$13,100
and
the
high
value
of
624
would
have
yielded
$13,750.
The
disparity
of
the
sums
is
hardly
worth
mentioning;
but
the
underlying,
perhaps
unconscious,
please-my-patron
bias
is
worth
mentioning.
Once
recognized,
such
bias
is
admittedly
hard
for
the
Court
to
quantify
in
a
report
which
aims
at
quantifications
of
values
in
place
some
16
years
before
the
defendant's
employee
undertook
her
task
of
appraisal,
on
her
employer's
behalf.
There
are
other
more
significant
aspects
of
Ms.
Crumb's
work
which
erroneously
support
her
employer's
posture
in
this
litigation,
by
tending
to
keep
down
the
V-Day
appearance
of
the
value
of
the
plaintiff's
truck
terminal
real
property,
and,
thus,
to
increase
the
appearance
of
the
capital
gain
which
Ms.
Crumb's
employer
alleges.
The
Court
is
not
convinced
that
such
aspects
of
her
work
were
deliberately
configured.
Nevertheless,
they
are
evinced
through
Ms.
Crumb's
candid
testimony.
Under
cross-examination
(transcript:
vol.
Ill,
page
660)
she
acknowledged
that
the
specific
use,
(no
doubt
its
highest
and
best)
as
trucking
terminal
would
increase
the
value
of
the
realty
to
a
specific
person
with
that
use
in
mind,
if
not
increase
it
substantially
to
the
overall
market.
As
will
now
be
demonstrated
Ms.
Crumb,
and
most
likely
through
no
fault
of
her
own,
was
not
aware
of
the
special-use
building
on
the
property
in
December
1971,
because
when
she
undertook
the
appraisal
in
1988,
for
December
31,
1971,
her
employer
seems
to
have
neglected
to
tell
her
of
the
plaintiff's
assertion,
on
discovery
in
1984,
of
a
trucked-goods
warehouse
on
the
property
in
December
1971,
and
for
a
few
years
or
more
thereafter.
Mention
of
that
structure,
so
highly
useful
for
a
trucking
terminal,
was
made
by
the
plaintiff
on
discovery,
Exhibit
58,
in
passages
at
pages
72
and
73,
read
into
evidence
by
the
defendant's
counsel.
So,
in
this
regard,
the
defendant's
appraisal
report
(Exhibit
58)
is
wrong
in
going
against
the
plaintiff's
interest
by
significantly
diminishing
the
value
of
his
land
on
Valuation
Day.
The
evidence
before
the
Court
shows
that
the
real
property
at
4134-16th
Street
S.E.
held
assets
of
great
objective
value
as
well
as
of
exceptional
value
for
the
Pyramid
company's
Bow
Valley
Transport
and
any
transportation
and
trucking
enterprise,
assets
which
were
simply
overlooked
in
the
appraisal
report
by
Crumb.
Such
oversight
means
that
the
appraised
value
is
unreliable,
because
considerably
understated.
Among
the
assets
overlooked
and
understated
were
the
enterprise's
underground
fuel
tanks
which
were
accessed
by
and
through
the
fuel
pumps
which
Ms.
Crumb
did
notice.
She
made
an
assumption
of
"a
thousand-gallon
tank",
when
in
fact
she
had
in
her
possession
long
before
and
at
the
very
instant
she
came
to
testify
a
copy
of
the
city
building
permit
for
the
installation
in
1958
of
three
2,000
gallon
tanks
(Exhibit
51),
and
a
copy
of
the
city
building
permit
for
the
installation
in
1970
of
a
fourth
underground
storage
tank
of
unspecified
capacity
(Exhibit
52).
That
those
building
permits
came
to
be
exhibited
in
reexamination
of
Ms.
Crumb
by
the
defendant's
counsel
(transcript:
vol.
Ill,
pages
661-62),
only
after
cross-examination
on
the
very
subject
(pages
657,
659-60),
does
nothing
whatever
to
establish
any
professional
objectivity
on
her
part:
it
does
serve
to
intensify
the
perception
of
a
please-my-patron
bias
on
her
part.
The
strong
inference
drawn
by
the
Court
on
the
basis
of
Ms.
Crumb's
conduct,
demeanour
and
lack
of
candour
is
that
she
probably
would
not
have
revealed
the
existence
of
these
additional
and
highly
valuable,
because
highly
useful,
fuel
storage
tanks
if
she
had
not
been
specifically
asked
about
them.
Indeed
the
questions
posed
to
her
on
cross-examination
presumed
a
plurality
of
tanks,
but
Ms.
Crumb's
answers
coyly
referred
only
to
the
singular,
thus:
Q.
Did
you
value
those
storage
tanks
as
to
their
cost?
A.
Yes,
I
did.
Q.
What
did
you
place
their
cost
at?
A.
I
believe
the
cost
in
the
cost
approach,
was,
if
I
remember
correctly,
$2,400.
Q.
And
how
did
you
arrive
at
that
number?
A.
Using
the
Marshall-Swift
and
the
Boeckh
cost
manuals.
Q.
And
your
belief
was
that
in
1971
those
tanks
could
have
been
installed,
then,
for
$2,400?
A.
In—yes,
that's
correct,
that
would
have
included
the
cost
of
the
tank
and
the
installation
of
it.
(transcript:
vol.
Ill,
page
657)
[Emphasis
added.]
At
that
moment
she
knew
she
had
in
her
possession
the
copies
of
the
building
permits,
Exhibits
51
and
52,
and
a
few
moments
later
in
cross-examination,
she
casually
mentioned
that
"since
the
completion
of
the
appraisal,
a
building
permit
[singular]
was
brought
to
my
attention
.
.
.
for
storage
tanks,
and
it
indicated
there
were
three
2,000
gallon
tanks
put
underground,
but
that
is
not
the
assumption
that
I
made
when
I
did
the
report
I
did
not
have
that
information
then.”
(transcript:
vol.
III,
page
659.)
It
tolls
against
the
Court's
finding
much
credibility
in
this
land
appraiser
that
she
did
not
volunteer
this
information,
the
exhibits,
and
the
necessarily
upward
revision
of
the
evaluation
as
of
December
31,
1971,
at
the
outset
of
her
testimony,
without
waiting
to
see
if
they
would
be
extracted
from
her
partly
on
cross-examination
and
as
a
result
of
that,
partly
on
re-examination.
What
if
the
plaintiff's
counsel
had
never
raised
the
subject
in
cross-examination?
One
is
left
with
the
hideous
inference
that
Ms.
Crumb
would
have
been
content
to
deceive
the
Court,
with
the
copies
of
the
subsequently
obtained
building
permits
to
her
knowledge
quietly
nestled
in
the
file
which
she
took
with
her
into
the
witness
stand,
but
without
volunteering
such
important
information
as
would
undoubtedly
change
the
conclusions
of
her
evaluation.
The
plaintiff's
counsel,
even
without
those
exhibits
available
to
him,
after
Ms.
Crumb
made
passing
mention
to
a
plurality
of
tanks
but
had
reverted
to
her
original
erroneous
assumption
of
a
single
tank
and
did
not
offer
to
correct
counsel's
misinformation,
put
his
hypothesis
to
her
in
this
passage
of
cross-examination:
Q.
I
guess
building
permits
are
building
permits.
I
believe
the
evidence
we've
had
here
is
that,
in
fact,
what
you
have
are
two,
10,000
gallon
tanks?
A.
Which
is
different
than
what
I
made
the
assumption
to
be.
Q.
In
doing
your
examination
as
to
the
value
of
the
property
in
1971,
did
you
consider
its
use
as
it
was
then
used
as
a
truck
depot
or
truck
terminal?
A.
I
considered
it
to
the
point
that
I
was
aware
of
it,
but
in
determining
the
market
value
of
the
property
I
was
viewing
the
property
as
to
what
it
would
be
worth
to
the
majority
of
purchasers
on
the
market.
The
specific
use
of
it
being
for
a
trucking
terminal
would
increase
the
value
of
it
to
a
specific
use
person,
but
it
would
not
increase
the
value
substantially
to
the
overall
market.
Q.
So,
to
someone
in
the
trucking
business,
the
value
would
be
greater?
A.
To
that
individual,
they
would
feel
it
was
more
valuable,
yes.
Q.
Or
to
someone
in
a
similar
business
acquiring
that
property?
A.
It
may.
(transcript:
vol.
Ill,
pages
659-60)
The
appraiser
was
coolly
testifying
in
speculative
terms
while
she
had
the
copies
of
the
building
permits,
Exhibits
51
and
52,
present
in
Court
in
her
file.
The
land
appraiser,
Ms.
Crumb,
is
not
a
credible
witness.
She
greatly
devalued
her
oath
to
tell
"the
whole
truth”
by
dissembling
in
the
above
demonstrated
manner.
Ms.
Crumb's
evaluation
effort
is
grossly
deficient
in
another
aspect
of
which
she
may
well
have
been
truly
ignorant
without
any
deception.
In
January
1988,
when
she
went
to
evaluate
the
former
property
of
Pyramid
as
of
December
31,
1971,
she
did
not
see
the
freight
warehouse
with
its
loading
docks
for
articulated
trucks
and
city
delivery
trucks
which
stood
there
in
1971
but
which
was
subsequently
removed.
Ms.
Crumb
did,
no
surprise,
make
the
obvious
admission
and
explained
why
she
did
not
register
the
presence,
value
and
high
utility
of
that
warehouse
as
of
the
end
of
1971.
Q.
Mr.
Young:
So,
would
you
agree
with
me
that
if
I'm
correct
and
if
the
evidence
shows
that
the
subject
property
on
1971
had
on
it
a
warehouse
for
trucking
purposes,
that
that
would
significantly
affect
your
evaluation?
A.
If
the
property
did
have
that
structure—
Q.
I
ask
you
to
assume
that,
that
this
structure
was
on
this
property?
A.
Yes,
in
making
that
assumption,
then
yes,
it
would
increase
the
value.
Q.
And
I'm
not
trying
to
be
unfair,
I’m
really
not.
A.
I
apologize,
I
have
difficulty
with
it,
because
I
double
checked
with
the
city
so
many
times—
Q.
I'm
sure
you
did
everything
possible,
Mrs.
Crumb.
A.
I
went
through
the
records
and
I
went
through
them
and
we
didn't
turn
up
anything
of
that
nature.
The
Court:
Those
are
killed
assessment
cards,
is
that
correct?
A.
A
killed
assessment
card
is
[sic:
represents]
a
structure
that
was
in
existence
and
then
was
demolished
and
they
basically
stroke
it
out
and
refer
to
it
as
a
killed
card
and
goes
into
storage;
but
they
do
have
records
of
all
building
permits
and
demolition
permits
that
nave
been
issued
right
back
to
the
late
sixties,
and
I
did
review
those
and
I
did
not
come
across
anything
of
this
nature.
(transcript:
vol.
Ill,
pages
652-53)
It
is
indeed
passing
strange
that
the
City
of
Calgary
could
produce
no
“killed”
assessment
cards.
It
could
take
deeper
delving
to
get
to
the
bottom
of
that
mystery,
but
whatever
the
answer,
it
is
not
conclusive,
for
there
is
a
preponderance
of
credible
evidence
before
the
Court
which
permits
the
conclusion
that
there
was
such
a
structure.
It
was
not
so
grandiose
as
the
plaintiff
reconstructs
in
his
optimistic
but
fading
memory,
but
such
a
structure
did
exist.
That
credible
evidence
comes
from
the
plaintiff,
it
must
be
said.
It
is
and
has
long
been
a
matter
of
dignified,
wry,
judicial
humour
that
"the
weight
of
evidence"
does
not
refer
to
the
number
of
individual
witnesses
nor
their
collective
or
personal
avoirdupois,
but
rather
to
the
cogency
of
that
which
is
posited
before
the
Court.
Many
witnesses,
apart
from
the
plaintiff,
such
as
Arthur
Charles
Linnington,
Ronald
Allen
Jackson,
Barry
Ranald
Schneider,
Judith
Ann
Crumb,
Gerald
Blake
Martin
and
Philip
Bernard
Libin
at
least,
were
asked
about
the
presence
or
absence
of
a
warehouse
with
loading
docks
in
1971,
with
largely
negative
results.
This
is
not
surprising
or
conclusive
because
V-Day
predated
the
trial
by
more
than
17
years.
No
witness
produced
a
1971
photograph
of
the
premises.
Edward
James
Attridge,
the
plaintiff,
is
the
one
witness
who
is
most
likely
to
remember
the
configuration
of
the
premises
on
16th
Street
S.E.
in
Calgary
as
of
the
material
time.
He
was
there
almost
daily
operating
Bow
Valley
Transport,
which
is
inherently
significant
over
and
beyond
the
witness'
persistent
attendance.
Upon
his
examination
for
discovery
in
June
1984,
the
plaintiff
referred
to
the"warehouse
and
garage"
at
4134-16th
Street
S.E.,
at
page
73
of
Exhibit
58,
in
a
passage
tendered
by
the
defendant's
counsel.
In
his
testimony-in-chief,
the
plaintiff
swore:
Okay,
I
fenced
the
property;
then,
over
on
the
vacant
land,
that—because
I
owned
right
to
the
corner,
is
where
my
warehouse
I
built,
a
beautiful
warehouse,
and
I
put
up
a
warehouse
so
that
we
could
transfer
the
freight,
you
see,
from
our
trucks
that
come
in
every
night,
the
freight
just—all
this
freight
that
has
to
be
transferred
from
the
highway
trucks
to
the
city
trucks,
and
as
memory
serves
me,
I
had
eight
places
for
unloading
that
I
built
on
my
property
across
that
remaining
acre
of
land,
across
the
back
end
of
the
property,
and
this
was
made
out
of
concrete,
this
was
made
out
of
steel,
and
this
was
made
out
of—of
lumber,
big
heavy
timbers.
So,
it
was
a
very
beautiful
structure.
Q.
And
when
was
this
structure,
as
you've
outlined,
completed?
A.
Everything
was
in
place—everything
was
in
place
and
operating
and
functional
in
1971,
it
was
all
there.
(transcript:
vol.
I,
page
122)
It
was
after
the
plaintiff's
testimony
recorded
in
volume
I
that
the
other
witnesses
above
mentioned
testified
about
such
warehouse
with
largely
negative
results.
The
plaintiff
was
then
recalled
in
rebuttal
after
the
issue
was
seen
to
be
joined
in
Ms.
Crumb's
testimony.
The
plaintiff
produced
a
graphic
representation
of
his
oral
testimony,
which
was
received
as
Exhibit
59.
It
is
a
simple
not-to-scale
plan
of
the
property
at
the
corner
of
16th
Street
S.E.
and
41st
Avenue
S.E.
which
is
also
represented—and
in
proper
scale—in
Ms.
Crumb's
report,
Exhibit
50.
The
plan
shows
the
office
and
repair
shop
building,
at
the
north
end
of
the
land,
exactly
where
Crumb
found
it
still
standing
in
January
1988,
and
then
bearing
the
legend
Rainbow
Concrete".
It
fronts
on
16th
Street
and
is
positioned
on
an
east-west
axis
along
the
land's
northern
boundary.
The
warehouse
is
drawn
on
Exhibit
59
positioned
on
a
north-south
axis
long
the
land's
eastern
boundary
occupying
the
south-east
corner
of
the
land
extend-
ingnortherly.
This
position
permitted
the
long,
articulated
tractor-trailer
transports
to
back
in
off
16th
Street
and
to
back
up
to
loading
docks,
along
with
the
city
delivery
trucks,
which
distributed
the
transports'
cargos
or
parts
and
combinations
thereof
to
various
customers
throughout
the
city.
Equally,
such
delivery
trucks
having
collected
goods
for
shipment
out
of
the
city
backed
up
to
the
loading
docks
in
the
warehouse
and
their
cargos
were
loaded
into
the
highway
transports
backed
up
to
neighbouring
docks.
The
plaintiff
further
described
the
loading
and
unloading
process
above
recited
in
his
rebuttal
testimony
in
transcript:
vol.
IV,
pages
781-91.
This
is
the
inherent
significance
of
these
processes
described
to
show
how
the
warehouse
with
loading
docks
functioned
in
the
business
of
Bow
Valley
Transport.
It
stands
to
reason
that
the
well-run,
then
profitable,
freight
and
other
goods
transportation
enterprise
operating
its
long,
articulated
transports
and
city
delivery
trucks
did
not
inefficiently
waste
the
time
and
energy
which
would
be
required
to
collect,
to
transfer
and
to
distribute
cargo
at
the
Calgary
terminal
by
manual
lifting
between
vehicles,
instead
of
wheeling
cargo
between
vehicles
backed
up
to
neighbouring
loading
bays
on
a
one-level
cargo
floor
in
the
warehouse.
The
Court
prefers
the
inherently
reasonable
evidence
over
inherently
unreasonable
evidence—even
in
the
absence
of
the
city's
killed
building
permits
which
persuaded
Ms.
Crumb
that
the
enterprise
could
operate
without
the
warehouse,
if
she
even
put
her
mind
to
that
unreasonable
and
improbable
prospect.
According
to
the
plaintiff's
testimony
the
warehouse
with
six
or
eight
(he
could
no
longer
remember
how
many)
loading
bays
which
was
in
use
all
through
1971
was
ultimately
demolished
or
moved
off
the
land
in
1977
by
Burns
after
it
had
acquired
the
second
half
of
his
Pyramid
shares
and
it
had
become
the
sole
owner
of
Bow
Valley
Transport,
(transcript:
vol.
IV,
page
784.)
In
giving
the
above
history
of
the
rise
and
demise
of
the
warehouse,
the
plaintiff
was
somewhat
supported
by
the
fading
recollection
of
Ronald
Allen
Jackson,
the
president
of
Burns
Foods
(1985)
Ltd.,
who
testified
thus:
Q.
Well,
where
was
Bow
Valley
operating
when
you
bought
your
first
50
percent?
A.
Well,
.
.
.
they
had
a
small
terminal
in
Calgary
and
a
small
terminal
in
Edmonton,
as
I
recall;
and
it
seems
to
me
that
after
we
acquired
the
first
50
percent,
arrangements
were
made
to
acquire
the
land
and
construct
the
Calgary
terminal.
Q.
I
see,
okay.
At
that
time,
when
you
moved
to
larger
facilities
in
Calgary,
what
did
the
company
do
with
the
land
that
had
been
there
at
the
time
you
had
acquired
the
first
50
percent?
A.
I
don't
recall.
(transcript:
vol.
Ill,
pages
598-99)
Mr.
Jackson
did
not
recall,
but
Mr.
Libin
did,
and
testified
that
he
bought
the
subject
land
without
the
warehouse
in
March
(perhaps
April)
1978,
from
Pyramid,
then
wholly
owned
by
Burns.
(transcript:
vol.
IV,
pages
770-71.)
This
is
not
perfect
confirmation
of
the
plaintiff's
testimony,
of
course,
but
it
imparts
a
reasonable
degree
of
corroborative
probability
to
it.
Further,
Barry
Ranald
Schneider,
on
Turbo
Resources'
behalf,
who
discussed
prices
and
values
with
the
plaintiff
on
the
Bonnybrook
premises,
had
a
vague
recollection
(transcript:
vol.
Ill,
page
633)
of
a
concrete-block
building
in
confirmation
of
the
plaintiff's
testimony.
Such
recollection
may
be
somewhat
worthwhile
because
of
its
spontaneity
of
expression
on
re-examination,
but
it
was
profoundly
qualified
and
diluted
by
Schneider
in
the
same
answer.
Moreover,
as
above
noted,
the
plaintiff's
testimony
is
inherently
reasonable.
Bow
Valley's
enterprise
could
hardly
have
operated
as
it
did
without
the
utility
of
the
structure
described
by
him.
Ms.
Crumb
saw
no
loading
docks
inside
the
back
doors
of
the
surviving
building
(transcript:
vol.
Ill,
page
639)
but
after
16
years
that
is
not
conclusive.
What
is
conclusive
is
that
the
interior
of
that
building
was
used
for
repairs,
maintenance
and
reconstruction
of
Bow
Valley's
rolling
stock,
so
it
could
not
have
served
the
function
of
loading,
unloading,
breaking
down
and
recombining
cargo
at
the
same
time.
Furthermore
it
truly
appears,
as
the
plaintiff
testified,
that
articulated
tractor-trailer
transports
could
hardly
have
backed
into
place
given
the
narrowness
of
the
back
lane
and
the
difference
in
elevation
between
the
subject
land
and
the
back
lane.
Bow
Valley
Transport
was
not
operated
with
such
hopelessly
crippling
methods
in
Calgary
at
the
material
times.
So
the
value
of
the
property
must
be
found
to
be
significantly
higher
than
Ms.
Crumb
opined
it
to
be.
It
is
unfortunate
that
the
plaintiff
probably
induced
his
solicitor,
in
October
1972,
when
title
was
being
transferred
into
Pyramid's
name,
to
swear
(as
shown
in
Exhibit
16)
that
the
total
value
of
the
property
was
then
only
$26,500.
Even
Ms.
Crumb,
who
believed
that
the
Bow
Valley
highway
transportation
enterprise
could
operate
without
loading
docks
and
warehouse,
by
the
esoteric
processes
of
her
profession
came
up
with
an
estimated
market
value
of
$36,700
as
of
December
31,
1971,
ten
months
earlier
than
the
ill-
informed
solicitor’s
oath-taking
in
October
1972.
He
was
simply
wrong,
and
how
he
became
to
be
so
wrong
is
for
some
enquiry
not
being
conducted
here.
So,
the
land
must
be
increased
in
value.
The
report,
Exhibit
35,
filed
by
Brian
William
Clark
is
of
no
use,
since
he
shows
in
Schedule
#1
thereof
only
a
book
value
of
$25,620
for
the
building
and
tanks
and
the
land
as
at
August
31,
1971.
The
Court
rejects
both
evaluations
produced
by
the
plaintiff
and
the
defendant
as
being
vastly
too
low.
With
the
warehouse
and
loading
bays
or
docks
which
the
Court
finds
existed
in
December
1971
and
during
a
few
subsequent
years,
until
moved
or
demolished
by
Burns,
it
is
obvious
that
the
highest
and
best
use
of
the
Bonnybrook
property
(not
forgetting
the
fuel
tanks)
was
that
of
a
trucking
terminal
with
office
facility
and
vehicle
repair
and
construction
facility.
The
Court's
appreciation
of
the
V-Day
fair
market
value
of
the
Bonnybrook
trucking
terminal,
land,
buildings
and
special
facilities
is
that
it
must
have
been
not
less
than
$82,700
consisting
of
Ms.
Crumb's
evaluation
in
the
amount
of
$36,700,
a
six-bay
loading
dock
and
warehouse
$37,000
and
the
purchase,
installation
and
connection
of
the
extra
fuel
storage
tanks
of
which
Ms.
Crumb
knew
but
declined
to
evaluate
before
she
testified,
at
least
$9,000,
for
the
indicated
total
of
$82,700;
or
$92,000
if
the
structure
were
an
eight-bay
loading
dock
as
the
plaintiff
suggested,
but
could
not
remember
whether
it
had
eight
or
six
bays.
The
factors
which
the
Court
takes
into
account
in
putting
a
value
to
a
six-bay
loading
dock
and
warehouse
are
the
cost
of
materials,
recently
acquired
after
1966,
including
timber
buffers,
concrete
building
blocks,
internal
structure,
transfer
floor,
foundations,
windows,
storage
areas,
heating
and
ventilation,
lighting,
roofing
including
shelter
over
loading
bays
and
secure
overhead
doors,
six
probably,
but
perhaps
three
double
doors.
If
the
structure
did
not
have
a
concrete
apron
on
the
dock
side,
it
would
have
required
compacted
earth
topped
with
gravel.
An
eight-bay
loading
dock
and
warehouse
would
bear
a
commensurately
higher
value.
If
either
of
the
parties
be
unhappy
about
the
Court’s
assessment,
he
or
she
may
appeal
and
seek
to
adduce
evidence
to
show
otherwise
as
one
or
other
ought
to
have
done
in
the
first
place.
The
result
is
that
the
Bonnybrook
terminal,
owned
for
purposes
of
this
appeal
by
Pyramid,
should
be
taken
to
be
worth,
on
December
31,
1971,
the
sum
of
$46,000
more
than
the
value
Ms.
Crumb
attributed
to
it.
This
new
increased
valuation
of
the
real
property
adds
$460
to
the
value
of
each
of
the
100
shares
of
Pyramids
stock.
Given
the
defendant's
amendment
of
pleadings
in
the
new
paragraphs
7.1
and
10,
amounting
to
an
admission
of
the
value
per
share
being
$2,000,
at
this
stage
of
proceedings
the
Court
now
finds
that
the
Valuation
Day
assessment
of
each
of
the
100
shares
now
rises
to
$2,460
per
share,
but
the
issues
between
the
parties
are
not
yet
concluded.
The
as-yet-unconcluded
issues
involve
the
evaluation
of
nothing
so
tangible
as
real
property.
The
rolling
stock
and
the
maintenance,
construction
and
reconstruction
tools
and
machines
are
tangible
enough
but
rather
more
casually
mobile,
renewable
and
destroyable
than
real
property.
The
matter
in
issue
in
these
actions
now
revolves
around
the
difference
of
$6,550
of
disputed
value
per
share
between
the
$2,450
found
to
this
stage
by
the
Court
and
the
$9,000
per
share
claimed
by
the
taxpayer.
The
evidence
tendered
to
the
Court
is
a
mess
of
faded
recollections,
pseudo-scientific
reconstructions,
pseudo-learned
jargon,
back-filling,
egosalving
and
sheer
speculation.
Witnesses
with
naturally
evaporated,
because
unexercised,
memories
were
courted
by
both
sides
to
delve
back
for
a
decade-
and-a-half.
The
two
business
evaluators
are
partisans:
one,
the
co-author
of
a
textbook
testifying
in
justification
of
his
published
theories;
the
other
an
underqualified
employee
of
the
defendant
doing
his
employer's
bidding.
The
plaintiff's
testimony
is
more
self-serving
than
objective
because,
although
he
alone
knew
the
circumstances
and
assets,
and
lived
through
the
events,
his
memory
while
barely
preferable
is
fallible,
too.
The
evidence
is
largely
worthless,
and
the
opinions
and
conclusions
of
the
experts
are
quite
worthless.
The
foregoing
constitutes
what
may
be
regarded
as
a
harsh
finding.
The
plaintiff's
expert
Clark
did
not
have
to
proffer
his
opinions
in
a
matter
which
he
must
have
known
to
be
one
of
speculation.
Perhaps
the
defendant's
witnesses,
because
of
their
employee-status
had
no
choice
but
to
get
involved
in
such
a
matter,
but
if
that
be
so,
their
credibility
is
also
diminished.
Ms.
Crumb's
credibility
and
results
have
already
been
the
subject
of
comment.
Here
are
some
principal
reasons
for
rejecting
Mr.
Clark's
conclusions
and
opinions:
—Clark's
methodology
is
questionable
at
best
as
noted
and
demonstrated
by
the
defendant's
counsel;
—Clark's
virtually
sole
source
of
information,
called
facts,
was
the
plaintiff
himself;
—Clark
hardly,
if
at
all,
took
into
account
the
prevalent
economic
environment;
—Clark
did
not
take
any
normal
or
situationally
probable
risks
into
account,
no
doubt
because
the
plaintiff's
counsel
argues
that
risk
is
not
so
significant
for
a
special
purchaser—how
significant
being
always
a
matter
of
rather
subtle,
subjective
opinion
(plaintiff's
argument:
pages
8
and
9,
36
and
37,
and
at
tab
6,
Campbell
&
Kain
Business
Valuation:
Some
Current
Thoughts,
vol.
23
Canadian
Tax
Journal,
page
373.).
Now,
it
must
be
acknowledged
that
a
component
in
the
credibility
of
Mr.
Clark's
efforts
is,
perforce,
the
plaintiff's
personal
credibility.
It
has
been
held
in
low
repute
according
to
Mr.
Justice
J.C.
Cavanagh
of
the
then-designated
Supreme
Court
of
Alberta,
Trial
Division,
in
his
reasons
for
judgment
(Exhibit
25,
page
9)
in
Western
Mack
Truck
&
Equipment
Ltd.
v.
Bow
Valley
Transport,
November
17,1975
(unreported).
The
defendant's
counsel
averred
that
he
did
not
tender
those
reasons
for
judgment
in
order
"to
deal
with
his
[Mr.
Justice
Cavanagh's]
finding
of
credibility”
(transcript:
vol.
Il,
page
257)
and
the
Court,
after
discussion
with
the
respective
counsel,
indicated
that
the
plaintiff's
state
of
credibility
would
not
be
affected
by
those
reasons
rendered
some
14
years
before
the
trial
of
the
case
at
bar.
So
be
it.
It
is
enough
to
note
that
Mr.
Clark's
source
of
information
was
not
an
independent
one,
but
rather
was
the
plaintiff
himself.
The
defendant's
counsel,
however,
is
not
so
good
as
his
words,
for
on
page
20,
paragraph
108,
he
just
could
not
resist
the
temptation
to
comment
on
Mr.
Justice
Cavanagh's
finding
about
the
plaintiffs
credibility
expressed
in
Exhibit
25.
Here
are
some
principal
reasons
for
rejecting
Mr.
Martin's
conclusions
and
opinions:
—Martin
relied
on
those
who
were
ultimately
called
as
witnesses
for
the
defendant
but
he
did
not,
or
in
fairness,
he
could
not
discern
the
internecine
conflicts
within
the
management
ranks
of
Turbo
and
Burns,
producing
selfvindicating
testimony
from
those
witnesses
who
were
kept-on
or
otherwise
survived
in
their
positions
within
those
two
corporations
wherein
the
initial
optimists
at
the
material
times
became
the
scapegoats;
—Martin's
qualifications
upon
which
counsel
for
the
defendant
promoted
his
expertise
were
inferior,
in
that:
(a)
Martin
was
not
a
member
of
the
Canadian
Institute
of
Chartered
Business
evaluators
(sometimes
a
most
fallible
qualification
but
not
always)
nor
a
university
graduate;
(b)
his
sole
experience
as
an
evaluator
has
been
as
an
employee
of
the
Department
of
National
Revenue,
Taxation
(but,
on
the
other
hand,
his
evaluation
created
confusion
within
the
defendant's
ranks
here
and
forced
an
embarrassed
and
embarrassing
amendment
of
the
defendant's
pleadings);
—Martin,
having
been
directed
by
his
supervisor,
a
Mr.
Willis,
to
prepare
a
narrative
evaluation
of
the
business
as
of
Valuation
Day,
was
already
aware
of
the
Minister's
reassessment
and
the
taxpayer's
stated
value
of
the
property;
—Martin
was
not
clear
about
whether
the
issue
in
this
litigation
was
the
value
of
Pyramid's
shares
with
its
residential
properties
excluded,
or
not.
His
valuation
of
the
Bow
Valley
Transport
aspect
alone
of
the
shares
is
untenably
low.
Mr.
Martin's
ultimate
conclusion
about
the
V-Day
valuation
of
the
Pyramid
shares
in
regard
to
Bow
Valley
alone
is
rejected.
The
passages
from
the
respective
written
arguments,
especially
the
defendant's
paragraph
223
at
his
page
43,
all
recited
earlier
herein,
are
more
revealing
of
the
true
worthlessness
of
Mr.
Martin's
conclusions
than
his
testimony.
When
Martin's
evaluation
of
the
Bow
Valley
value
of
the
shares
is
revealed,
it
amounts
only
to
a
range
of
$120,000
to
$150,000
as
the
defendant's
counsel
agrees.
The
value
of
the
Bonnybrook
realty
on
16th
Street
S.E.
in
Calgary
has
been
found
to
be
$82,700
as
of
Valuation
Day
and
when
that
is
subtracted
what
is
left,
by
Martin's
lights,
is
a
range
of
$38,300
to
$68,300
to
cover
tangible
assets
such
as
26
tractor-trailer
articulated
transports,
the
repair
and
reconstruction
equipment,
and
all
office
furnishings,
machines
and
inventory,
and
all
the
intangible
assets.
(Even
if
one
were
wedded
to
Crumb's
value
of
$36,700
for
the
realty,
the
remaining
range
of
$83,300
to
$113,300
seems
quite
improbable.)
If
one
makes
the
not
unreasonable
assumption
that
the
office
equipment
together
with
the
vehicle
repair
and
reconstruction
equipment,
together
with
the
inventory
of
spare
tires,
etc.,
were
of
a
fair
market
value
of
only
eight
per
cent
of
the
assets
other
than
the
realty,
these
latter
assets'
value
deducted
from
the
remaining
value
range
based
on
Martin's
conclusions,
leaves
a
range
of
($38,300
x
.08
=
3,064,
in
turn
deducted
=)
$35,236
to
($68,300
x
.08
=
5,464,
in
turn
deducted
=)
$62,836.
The
remaining
range
is
therefore
$35,236
to
$62,836
to
cover
26
articulated
highway
transports,
(Clark,
transcript:
vol.
Il,
pages
353
and
357)
together
with
a
real
but
uncounted
and
overlooked
number
of
intra-city
delivery
trucks
in
Calgary
and
in
Edmonton
and
all
intangible
assets.
The
resulting
conclusion
is
absurd.
Leaving
aside
the
city
delivery
trucks
of
unde-
1991-04-11
signated
numbers
and
value,
and
leaving
aside
all
the
intangibles
of
a
well-
operated,
profitable,
growing
transport
business,
and
falsely
loading
all
the
remaining
value
range
on
the
26
tractors
and
trailers
just
to
illustrate
how
unreasonable
Martin's
evaluation
turns
out
to
be,
one
would
come
up
with
a
uniform
range
of
fair
market
value
for
each
of
the
26
articulated
highway
transports
of
from
$1,355
to
$2,417,
which
is
inherently
unreasonable.
So
it
would
be
even
the
moreso
if
one
rightly
charged
that
remaining
range
of
$35,236
to
$62,836
with
the
additional
fair
market
value
(whatever
it
might
be)
of
the
city
delivery
trucks
and
the
intangible
assets.
That
the
fair
market
value
of
the
shares
of
a
successful
business,
Bow
Valley
Transport,
be
evaluated
to
be
less
than
the
fair
market
value
of
its
tangible
assets
plainly
makes
no
sense
and
the
Court
rejects
it.
As
to
the
condition
of
the
rolling
stock,
the
Court
has
the
plaintiff's
testimony
and,
among
others,
Arthur
Charles
Linnington’s
imperfect
recollection.
It
cannot
be
taken
to
be
exact
as
of
V-Day,
because
this
defendant's
witness
spoke
of
viewing
the
physical
things
“in
‘72
or'73,
I
really
don't
know".
That
could
mean
any
time
between
January
1972,
to
December
1973.
It
must
be
remembered
that
Burns,
as
of
1971
and
1972,
was
already
a
customer
of
Bow
Valley
Transport,
so
Linnington’s
observation
of
Bow
Valley's"
new
trucks
at
that
time,
Mack
trucks,
trailers,
refrigeration
units
.
.
.
city
delivery
trucks
.
.
.
Fords"
(transcript:
vol.
Ill,
pages
558-59)
simply
demolishes
the
conclusions
drawn
from
Martin's
evaluation
of
a
fair
market
value
of
less
than
$1,355
to
$2,417
for
each
of
the
then-owned
Mack
tractors
with
refrigeration
unit
trailers,
even
if
no
evaluation
of
the
Ford
city
delivery
truck
is
before
the
Court.
And,
those
are
the
tangible
assets,
only!
The
Minister's
assumptions
and
the
evidence
adduced
to
support
them
are
shown
clearly
to
be
unreasonable,
worthless
and,
in
a
word,
wrong.
At
this
point
most
taxpayers
and
their
lawyers
would
be
pleased,
but
that
would
be
premature
here,
for
the
plaintiff's
evidence,
while
preferable
is
obviously
not
satisfactory.
The
plaintiff's
counsel
argues
that
the
Court
can
logically
choose
only
either
the
plaintiff's
evaluation
or
the
defendant's.
Inasmuch
as
the
defendant's
evaluation
is
in
tatters,
counsel's
urging
would
exact
total
victory
for
the
plaintiff,
because,
he
argues,
since
the
contending
experts
followed
completely
different
approaches,
"there
is
no
evidentiary
middle
ground”.
Brian
William
Clark,
the
plaintiff's
expert
witness,
evinced
a
strangely
curious
approach
to
the
evaluation
of
the
Pyramid
shares.
In
effect,
he
opined
that
because
those
astute
folk
at
the
summit
of
Burns
paid
$500,000
for
half
of
the
shares
in
1974
and
the
same
sum
again
for
the
other
half
in
1976,
then
despite
their
present
differences
of
opinion,
they
must
have
been
right
and
the
taxpayer's
reported
adjusted
cost
base
of
$900,000,
or
$9,000
per
share
in
1974
and
1976,
for
the
Bow
Valley
business
must
also
be
right.
The
formation
of
that
opinion
involves
many
other
factors.
First,
one
must
be
clear
about
the
"freight"
carried
by
the
Pyramid
shares
sold
to
Burns.
Bow
Valley
is
the
subject
of
Burns
interest
according
to
the
agreement
for
sale
(Exhibit
9)
dated
February
25,1974
and,
indeed,
it
is
provided
in
article
4(m)
of
that
agreement
that
Pyramid
"will
have
sold”,
prior
to
the
time
of
closing,
March
1,
1974,
at
10:00
a.m.,
its
three
therein
specified
rental
properties,
and
“will
have
paid"
dividends
and
proceeds
from
those
sales
to
the
taxpayer.
So,
the
value
in
issue
for
those
100
shares
of
Pyramid
is
quite
exclusive
of
the
rental
properties
mentioned
in
paragraph
4
of
the
statement
of
agreed
facts,
Exhibit
8.
This
is
all
in
accordance
with
the
pleadings
of
the
plaintiff
in
paragraph
19
of
both
statements
of
claim
denied
by
traversal
in
paragraph
2
of
both
statements
of
defence.
Remarkably
the
words
“Bow
Valley”
do
not
appear
in
either
statement
of
defence;
but
the
defendant
does
therein
admit
the
allegations
asserted
in
paragraphs
3
and
8
which
refer
to
Bow
Valley
being
operated
by
Pyramid
and
“each
share
of
Pyramid
sold
by
the
taxpayer
to
Burns”,
so
that
in
relation
to
the
actual
terms
of
sale,
Exhibit
9,
article
4(m)
the
share
values
are
to
be
regarded
in
relation
only
to
the
Bow
Valley
business
and
not
in
relation
to
the
rented
properties.
The
foregoing
appears
to
be
acknowledged
in
paragraph
3
of
the
defendant's
written
argument,
as
well
as
in
paragraph
199
thereof.
Accordingly,
the
fair
market
value
of
the
100
shares
of
Pyramid
at
any
time
before
all
were
finally
sold
to
Burns,
in
this
case,
is
the
fair
market
value
of
the
business,
assets
and
goodwill
of
Bow
Valley.
The
plaintiff
claimed,
and
claims,
that
on
Valuation
Day
it
was
$900,000.
In
that
regard,
it
must
be
a
matter
of
some
embarrassment
to
the
plaintiff
that
his
expert
Mr.
Clark
fixes
the
value
excluding
the
rental
properties
at
$835,900,
when
it
appears
all
along
that
the
plaintiff
has
been
asserting
that
the
relevant
value
for
Bow
Valley's
business,
being
the
100
shares
of
Pyramid
was
$900,000
on
Valuation
Day.
The
subject
shares
represent
a
special
business
whose
tangible
and
intangible
assets
are
specially
designed
and
made
to
be
the
assets
of
a
freight
and
food
trucking
enterprise.
The
business
of
Bow
Valley
would
not
be
of
any
interest
to
a
general
real
estate
investor,
nor
to
a
buyer
whose
business
is
that
of
a
furrier,
an
amusement
arcade
operator,
a
fast-food
restaurateur,
a
chartered
accountancy
firm,
a
realtor
nor
indeed
anyone
but
a
trucking
enterprise
or
an
enterprise
like
McCain
or
Turbo
or
Burns
which
needed
and
wanted
a
truck
line
business
to
complement
and
facilitate
their
own
businesses.
The
enterprise's
real
property
and
rolling
stock
and
office
and
machine
shop
and
welding
assets
were
all
specialized
for
trucking
so
any
prospective
or
actual
buyer
is
most
likely
to
be
a
special
buyer.
So
in
fact
it
was
with
McCain,
Turbo
and
Burns.
Harrison
McCain,
according
to
the
witness
Joseph
Edward
Palmer
who
managed
trucking
and
transportation
for
McCain
in
1971,
liked
Bow
Valley's
name
and
asked
Palmer
to
find
out
more
about
it
(transcript:
vol.
Ill,
pages
483-84)
and
ultimately
Palmer
or
his
very
good
friend
Art
Linnington
of
Burns
made
arrangements
for
McCain
and
Palmer
to
visit
the
plaintiff
with
a
view
to
discussing
McCain's
possible
purchase
of
Bow
Valley.
The
plaintiff's
fallible
memory
suggested
to
him
that
he
designated
the
price
at
$900,000
or
$1
million.
According
to
Palmer’s
fallible
memory
it
was
$2
million.
Q.
And
bearing
in
mind
this
is
many
many
years
ago,
is
it
possible,
sir,
that
that
number
was
a
million
and
not
2
million?
A.
It—anything
could
be
possible.
Both
Mr.
McCain
and
I
recall—I
recall
2
million
and
he
recalled
2
million;
and
why
I
think
that
might
have
been
the
figure
is
we
might
not
have
walked
away
so
quick.
If
the
price
had
been
a
million,
that
would
have
been
the
most
you
could
have
lost
if
you'd
have
bought
it,
it
wouldn't
have
scared
us
as
quick.
Perhaps
his
2
million
did,
but
that
is
only
speculation
on—
Q.
I
thought
your
testimony,
sir,
was
the
reason,
to
use
your
phraseology,
walked
away,
were
for
reasons
other
than
price?
I
never
before
heard
you
say
it
was
price.
A.
In
the
end,
you
always
walk
away
on
price.
.
.
.
(transcript:
vol.
Ill,
page
489)
In
the
end,
since
Bow
Valley
appeared
not
to
fit
Palmer’s
enterprise's
corporate
structure,
the
price,
even
at
$1
million
was
wrong,
and
most
assuredly
at
$2
million.
This
shows,
however,
that
the
price
of
one
million
in
or
around
the
material
time
would
not
have
been
insurmountable
if
there
had
been
a
key
person
whom
McCain
and
Palmer
could
have
co-opted.
The
plaintiff
and
McCain
could
hardly
warm
to
each
other
since
the
former
was
a
dog-keeper
and
the
latter
had
a
great
terror
of
them,
especially
the
big
dog
which
the
plaintiff
would
not
put
out
of
his
office
in
order
to
accommodate
McCain,
(transcript:
vol.
Ill,
page
481.)
The
dog
stayed
and
it
was
McCain
who
went
out
into
the
yard
in
the
Bonnybrook
property,
while
Palmer
spoke
with
the
plaintiff.
Nothing
more
came
of
the
matter.
McCain
and
Palmer
thought
the
plaintiff's
sole
management
caused
the
enterprise
to
be
too
loosely
run
for
them,
but
quite
adequate
for
the
plaintiff
as
owner.
(transcript:
vol.
III,
page
481.)
So,
it
was
McCain
who
came
looking
to
acquire
a
truck
line
in
Alberta
and
whose
associate
Palmer,
called
by
the
defendant
to
testify,
confirmed
that
a
price
of
$1
million
for
Bow
Valley
would
have
created
no
great
qualms
back
in
late
1971
or
early
1972
(for
it
was
still
wintertime
as
indicated
in
vol.
Ill,
page
478).
McCain
was
a
notional
(i.e.,
a
real
but
potential)
special
purchaser
but
for
economic,
not
sentimental
reasons.
The
economic
reasons
resided
in
the
special
qualities
of
the
assets
and
goodwill
of
Bow
Valley,
located
in
Alberta
just
where
McCain
would
have
been
pleased
to
acquire
a
trucking
enterprise.
The
evidence
is
sufficient
to
show
that
McCain's
search
for
such
an
acquisition
predated
V-Day.
If
the
plaintiff
had
not
been
such
a
fool
as
to
overstate
by
twice
his
reasonable
price
or
to
terrify
McCain
with
his
big
dog,
a
sale
of
Bow
Valley
for
$1
million
or
slightly
less
might
well
have
been
consummated
according
to
Palmer.
Also,
it
seems,
the
plaintiff
would
have
had
to
depart
and
permit
"tighter"
more
professional
management
in
order
to
satisfy
McCain
and
Raimer.
It
is
certainly
a
fact
that
the
plaintiff
was
not
pursuing
McCain
to
buy
Bow
Valley.
Both
parties
here
are
content
to
cite
the
judgment
of
Mr.
Justice
Joyal
of
this
Court
in
Dominion
Metal
&
Refining
Works
Ltd.
v.
The
Queen,
[1986]
2
C.T.C.
47;
86
D.T.C.
6311,
as
the
principal
jurisprudential
basis
of
their
arguments
about
special
purchasers.
What
engages
the
focus
of
mind
here
is
that
unless
Bow
Valley's
assets
were
to
be
offered
and
sold
piece
by
piece,
truck
by
truck
to
a
variety
of
buyers,
it
would
attract
virtually
only
special
purchasers,
for
as
a
going
concern,
it
was
a
special
acquisition,
a
specialized
trucking
enterprise.
The
interest
of
McCain
at
the
time
and
Palmer's
acquiescence
at
a
price
around
(but,
no
doubt,
not
over)
$1
million
dollars
is
one
indication
of
the
fair
market
value
for
the
Bow
Valley
business
and
therefore
such
value
for
the
Pyramid
shares
deemed
here
to
relate
wholly
and
solely
to
that
enterprise.
Such
indication
can
be
accepted
by
the
Court
without
a
purchase
in
fact,
and
without
a
gilt-edged
certificate
of
intent,
especially
after
such
a
prodigious
lapse
of
time.
In
McCain's
case
the
risk
of
the
plaintiff's
personalized,
"loose"
operation,
(whatever
that
meant
to
McCain
and
Palmer)
was
too
great,
presumably
even
at
$1
million,
because
as
Palmer
testified,"
In
the
end,
you
always
walk
away
on
price",
and
of
course
the
plaintiff's
capriciously
inflated
price
insured
that
there
would
be
no
purchase
by
McCain.
Turbo
was
also
interested
as
it
surely
seemed
at
the
time,
because
it
was
also
in
the
market
for
a
trucking
enterprise.
Like
McCain,
Turbo
was
not
seeking
merely
a
return
on
an
investment,
for
buying
a
guaranteed
investment
certificate
would
accomplish
that
simple
purpose.
Like
Palmer
and
McCain,
Turbo
wanted
a
trucking
enterprise
to
carry
its
own
products
among
others.
Bow
Valley
was
already
hauling
lubricating
oils
from
Edmonton
to
Calgary
for
Turbo.
(transcript:
vol.
Ill,
page
628.)
Robert
Gerald
Mamini
Brawn,
a
professional
engineer,
testified
that
he
was
the
president
and
chief
executive
officer
of
Turbo
Resources
in
1971,
although
Vance
Kenneth
Travis,
then
chairman
of
Turbo's
board,
thought
(transcript:
vol.
Ill,
page
617)
that
Brawn
did
not
acquire
the
latter
title
and
duties
until
1972.
There
was,
and
apparently
still
is,
among
the
witnesses
who
were
then
officers
of
Turbo,
internecine
strife
over
the
acquisition
of
Bow
Valley
which
was
proposed
by
Brawn.
As
president
of
Turbo,
Brawn
had
the
responsibility
to
bring
proposals
for
acquisitions
before
Turbo's
board
of
directors.
Bruce
Peter
Rosaine
Millar,
in
1971
sales
manager
of
an
oil
products
enterprise
acquired
by
Turbo
and
subsequently
Turbo's
southern
Alberta
division
manager,
took
some
ill-disguised
satisfaction
in
relating
to
the
Court:
This
topic
had
come
up
on
a
couple
of
occasions,
at
least,
during
1972
at
what
I
would
call
management
meetings
of
numbering
anywhere
from
10
to
15
people,
management
and
officers
of
Turbo,
and
the—the
topic
of
trucking,
in
general,
would
come
up,
because
of
course,
Mr.
Donald
and
I
would
be
doing—bringing
up
items
relating
to
Freeway
Transport,
which
was
the
trucking
company
that
Mr.
Donald
ran
and
I
helped
run,
to
some
extent;
and
invariably,
Mr.
Brawn
would
bring
up
the
topic
of
well,
we
should
take
another
look
at
Bow
Valley
Transport;
and
in
general
terms,
the
idea
would
be
shot
down
in
flames
at
those
meetings.
(transcript:
vol.
III,
page
623)
Brawn
thought
that
Bow
Valley
would
be
an
appropriate
acquisition
for
Turbo
and
in
addition
to
some
discussions
he
had
with
the
plaintiff
on
this
subject,
he
directed
Barry
Ranald
Schneider
to
meet
with
the
plaintiff
to
this
end,
in
the
early
days
of
1972.
Indeed,
as
Schneider,
the
defendant's
witness,
put
it
in
examination-in-chief:
A.
Bow
Valley
Transport
was
hauling
lubricating
oils
from
Edmonton
to
Calgary
for
[Turbo]
and
at
that
time
we
were
looking
at
all
kinds
of
acquisitions
for
Turbo,
and
Bow
Valley's
name
came
up
once.
(transcript:
vol.
Ill,
page
628)
Schneider
conversed
with
the
plaintiff
about
the
prospect
of
Turbo
buying
Bow
Valley
and
a
price
was
mentioned
by
the
plaintiff:
$900,000.
Schneider
was
told
by
the
plaintiff
how
much
Bow
Valley
had
to
earn
every
day
to
break
even,
who
its
major
customers
were,
apart
from
Turbo
and
Burns,
what
the
business
expenses
were,
and
Schneider
suggested
to
the
plaintiff
that
he
would
want
more
detailed
financial
information.
Schneider
reported
what
he
had
learned
and
his
conclusions
to
Brawn,
and
the
matter
according
to
Schneider's
naturally
faded
memory,
could
have
been
discussed
a
few
times
at
differing
intervals
within
Turbo's
management
group.
(transcript:
vol.
Ill,
pages
632-33.)
Now
here
is
an
example
of
how
memory
is
so
much
better
when
invoked
nearer
to
the
event
then
when
called
upon
much
later.
Neither
counsel
asked
Schneider
about
the
veracity
of
what
is
said
about
himself
in
Exhibit
17.
Exhibit
17
is
a
letter
written
by
Brawn
in
October
1975.
Moreover,
Brawn
testified
(transcript:
vol.
Il,
page
390)
that,
in
order
to
prepare
the
letter,
Exhibit
17
presumably
and
without
doubt,
he
"chatted
briefly”
with
Schneider,
and
that
conversation
took
place
only
three
to
four
years
after
the
plaintiff's
meeting
with
Schneider:
but
both
counsel
scrupulously
avoided
asking
Schneider
about
the
truth
of
that
matter,
preferring
not
to
refresh
his
memory
but
to
let
it
flounder.
The
early
documents
are
in
all
respects
better
evidence
than
the
late
recollections,
faded
and
unaided
as
they
were.
Here
is
what
Brawn
wrote
in
1975,
in
Exhibit
17:
October
24,
1975.
Mr.
Ted
Attridge
Bow
Valley
Transport
This
letter
will
confirm
to
you
that
during
the
early
part
of
1972
negotiations
were
carried
on
between
our
firm
and
Pyramid
Management
for
the
purchase
of
the
operations
known
as
Bow
Valley
Transport.
The
negotiations
were
conducted
by
our
Mr.
Barry
Schneider
and
consummated
in
our
evaluating
your
business
at
approximately
$900,000,
on
the
basis
of
you
accepting
this
in
stock,
notes
and
cash.
At
that
time
we
were
negotiating
the
purchase
of
another
marketing
company
and
prior
to
the
completion
of
our
offer
to
you
and
the
reducing
of
it
to
writing,
our
offer
to
the
marketing
company
was
accepted
and
we
were
unable
to
support
another
purchase
at
that
time.
I
searched
our
office
for
the
files
Mr.
Schneider
had
prepared
and,
unfortunately,
they
were
left
in
our
old
office
when
he
moved
to
Vancouver
and
were
later
destroyed
when
the
building
was
demolished.
I
know
at
that
time
that
Mr.
Schneider
spent
considerable
time
with
you
and
did
a
thorough
evaluation
of
the
business
and
assets,
and
while
I
cannot
now
locate
his
file,
we
were
convinced
that
the
numbers
arrived
at
were
viable.
I
trust
that
this
letter
explains
the
circumstances
and
I
am
sorry
I
cannot
be
more
helpful.
Yours
truly,
Turbo
Resources
Ltd.
[signed]
Robert
G.
Brawn,
P.Eng.
President
Brawn
confirmed
the
intent
of
the
above
recited
letter,
Exhibit
17,
in
a
further
letter
of
May
11,
1978,
written
to
the
plaintiff's
auditors,
and
received
at
trial
as
Exhibit
36,
thus:
May
11,
1978.
MacGillivray
&
Co.
Re:
Our
letter
of
October
24,
1975
Mr.
Attridge
[the
plaintiff]
has
requested
that
we
confirm
the
intent
of
our
company
in
connection
with
our
negotiations
carried
on
between
our
firm
and
Pyramid
Management
Ltd.
in
1972.
The
evaluation
of
$900,000.00
for
the
business
as
determined
by
our
Mr.
Barry
Schneider
included
only
the
operations
known
as
Bow
Valley
Transport
and
no
consideration
was
made
for
the
rental
properties
included
in
Pyramid
Management
Ltd.
Please
let
us
know
if
we
can
be
of
further
assistance.
Turbo
Resources
Ltd.
[signed]
Robert
G.
Brawn,
P.Eng.
President
These
letters
written
so
much
closer
to
the
material
time
are
far
better
evidence
than
the
faded
memories
of
Brawn
and
Schneider.
They
are
more
reliable
evidence,
too,
than
the
faded
memories
and
the
old
internecine
axe
which
Travis,
Donald
and
Millar
seemed
still
to
be
grinding
in
regard
to
Brawn.
Then
too,
the
latter
three
made
no
adverse
comment
on
the
putative
price,
but
rather
said
that
they
thought
Bow
Valley
would
not
fit
into
Turbo's
organization
and
that
Turbo
did
not
need
a
meat
hauler,
although
Bow
Valley
was
in
fact
hauling
Turbo's
own
products
at
that
very
time.
When
Turbo
had
recently
before
the
material
time
bought
Parkland
Oil
Products
from
Jack
Cameron
Donald,
Turbo
perforce
acquired
Freeway
Transport
with
it.
Here
is
what
Brawn
told
the
Court:
A
.
.
.
saw
a
match
because
in
1971,
we
basically
had
bought,
.
.
.
Freeway
Transport
Ltd.
We
had
bought
that
company
along
with
the
assets
of
Parkland
Oil
Products,
and
it
was
Parkland
Oil
Products
that
we
wanted.
Freeway
Transport
was
a
collection
of
drivers
and
did
not
have
an
active
management
operation,
so
that
we
felt
that
the
mechanical
operations
and
the
management
expertise
in
Mr.
Attridge
would
be
a
help
to
Turbo
at
that
time,
to
try
and
not
only
make
our
gasoline
distribution
more
effective
but
to
be
a
profit
centre
in
itself.
(transcript:
vol.
Il,
page
389)
While
Duncan
was
testifying,
the
Court
perceived
an
old
but
still
unhealed
hostility
toward
Brawn's
notion
that
Bow
Valley
was
a
needed
improvement
on
and
for
the
remnants
of
Freeway
Transport,
his
former
company.
The
inconsis-
tency
in
Duncan's
testimony
is
demonstrated
on
one
page,
transcript:
vol.
III,
page
495,
where
at
the
top
of
that
page
he
acknowledges
that:
”.
.
.
Bow
Valley
were
doing
some
hauling
for
Turbo's
manufacturing
arm,
they
had
a
re-refinery
in
the
Edmonton
area
and
they
used
[to]
ship
oil
throughout
Alberta.”
By
the
bottom
of
the
same
page
of
transcript,
Duncan
is
reported
as
saying,
somewhat
contemptuously
and
forgetfully
as
the
Court
notes:
”.
.
.
I
didn't
think
that
it
was
right
that
we
[Turbo]
be
getting
involved
in
a
different
line
of
business
totally
in
hauling
meat.
It
just
didn't
seem
to
fit
the
Turbo
image
or
long-term
aims
or
anything
else."
[Emphasis
added.]
So,
on
the
basis
of
his
testimony
the
Court
pays
scant
regard
to
Duncan
or
to
Millar,
his
echo,
or
to
Travis,
when
it
comes
to
trying
to
determine
the
fair
market
value
of
Pyramid's
shares
representing
Bow
Valley
Transport.
Those
three
witnesses
had
a
different
axe
to
grind
and
apart
from
it,
their
memories
evinced
no
more
reliability
than
those
of
the
other
witnesses
of
fact.
Brawn
could
not
persuade
his
fellow
Turbo
board
members
to
acquire
Bow
Valley
but,
as
the
Court
is
convinced
the
missing
file
would
show,
the
estimated
value
of
$900,000
was
not
the
cause
of
rejection.
The
other
board
members
had
their
own
oblique
motives
in
isolating
Brawn.
So,
the
Court
accepts
Exhibits
17
and
36
as
the
best
evidence
available
and
concludes
that
although
Schneider's
missing
file
is
not
to
be
taken
as
infallible,
it
is
evidence
of
a
discussion-opening
price
of
$900,000
from
which
one
can
infer
an
approximate
fair
market
value
as
of
December
31,
1971.
It
is
noted
here,
as
distinct
from
the
case
of
McCain,
that
the
exact
sum
was
suggested
by
the
plaintiff.
The
special
purchaser
Turbo
did
not
react
adversely
on
price,
indicating
that
the
$900,000
was,
or
was
close
to,
a
reasonable
price
for
a
special
purchaser,
and
that,
the
Court
holds
is,
or
is
close
to
the
fair
market
value.
In
the
instance
of
McCain's
interest,
Palmer
said
a
price
of
$1
million
(half
of
the
plaintiff's
capricious,
suggested
price)
would
not
have
caused
McCain
to
walk
away
from
negotiations.
Palmer’s
expressed
view
does
not
support
the
inference
that
he
or
McCain,
both
having
practical
experience
although
not
so-called
"expertise",
would
have
paid
$1
million
for
Bow
Valley
or
the
Pyramid
shares
it
represented,
had
the
plaintiff's
conduct
been
more
rational.
Their
expertise
was
other
than
the
purported
expertise
of
the
expert
witnesses
called
here;
it
was
that
of
intelligent
people
daily
engaged
in
business.
What
McCain
and
Palmer
may
have
lacked
in
’
book-learning”
they—or
at
least
Palmer
whom
the
Court
heard
and
observed—made
up
in
terms
of
a
practiced
eye
and
sound
business
sense.
All
of
which
is
to
say
that,
while
so-called
professional
expertise,
which
so
often
means
mere
speculation
clothed
in
learned-sounding
jargon,
can
be
useful,
it
ought
not
to
be
worshipped
and
adored
to
the
exclusion
of
practical
experience
and
sound
business
sense.
In
this
case,
the
expert
witnesses
were
set
the
task
of
performing
retrospective
speculation.
On
the
other
hand
McCain
and
Palmer,
Brawn
and
Schneider
were
engaged
in
their
respective
views
and
assessments
of
the
Bow
Valley
enterprise
at,
during,
or
near
the
material
times.
Brawn
and
Schneider
conferred
only
a
few
years
after
the
material
times,
and
Brawn
recorded
what
he
and
Schneider
remembered
in
Exhibits
17
and
36,
non-self-serving
letters;
and
that
evidence
is
hereby
preferred
despite
(a)
the
loss
or
destruction
of
Turbo's
file
on
the
subject,
(b)
the
internecine
conflict
whereby
Brawn's
views
were
attempted
to
be
denigrated
by
former
colleagues
and
(c)
the
not
surprisingly
faded
memories
of
these
witnesses
some
17
or
18
years
after
the
material
times.
So
also
with
Palmer,
whose
memory
had
also
and
quite
naturally
faded,
but
was
jogged
by
recollection
of
the
plaintiff's
bizarre
conduct
in
stating
a
ridiculously
nigh
price
and
in
preferring
the
company
of
his
large
dog
over
that
of
Harrison
McCain
whom
dogs
terrified.
These
witnesses'
indications
of
the
value
of
that
specialized
enterprise,
Bow
Valley
Transport,
at
or
near
V-Day,
and
accordingly,
a
close
approximation
of
the
fair
market
value
of
the
Pyramid
shares
in
issue,
is
more
acceptable
to
the
Court
than
the
opinions
of
all
the
expert
witnesses
with
their
vacuous
thoughtlessness,
wilful
suppression
of
facts,
inexperience,
deficient
methods
and,
in
Clark's
case,
undue
reverence
for
the
alleged
astuteness
of
the
Burns’
management
who
at
trial
expressed
regret
at
their
improvident
purchase
of
Bow
Valley
for
$1
million
in
1974
and
76.
It
is
true
that
the
value
of
the
Bow
Valley
enterprise
grew
after
December
31,
1971,
but
it
is
not
true
that
Burns
was
acting
under
any
compulsion
to
buy
Bow
Valley
than
any
other
special
purchaser
in
the
market
to
buy
a
trucking
enterprise
because
its
management
perceived
some
obvious
benefit
in
doing
so.
The
need
for
Burns
to
buy
Bow
Valley
as
of
V-Day
surely
existed
then
but
it
cannot
be
parlayed
into
a
compulsion.
It
is
not
certain
that
Burns
would
have
paid
$1
million
on
or
around
December
31,
1971,
even
although
the
property
and
enterprise
were
nearly
the
same
on
V-Day
as
when
all
the
shares
were
ultimately
bought
by
Burns
in
1974
and
1976.
The
general
economic
trends
were
similar
on
V-Day
as
those
still
prevailing
at
the
time
of
purchase—that
is,
inflationary,
with
constantly
increasing
sums
of
money
needed
to
buy
the
virtually
unchanged
property
and
enterprise
of
Bow
Valley.
Indeed,
it
may
be
observed
that
in
inflationary
times
the
capital
gains
tax
is
just
a
tax
on
inflated
prices
and
values.
Thus
there
is
much
significance
in
the
testimony
expressed
by
Ronald
Allen
Jackson
latterly
president
of
Burns
and
formerly,
during
the
1970s,
comptroller,
assistant
secretary
and
vice-president
in
various
designations
and
functions.
He
swore
on
cross-examination
(transcript:
vol.
III,
pages
597-98),
that
after
Burns
acquired
100
per
cent
of
the
Bow
Valley
enterprise,
Burns
operated
it
for
a
year-and-a-half
and
then
sold
off
some
of
the
assets,
such
as
the
rolling
stock
(including
the
trucks),
which
alone
fetched
$952,000.
That
sale
of
vehicles,
alone,
which
were
bought
by
Porter
Transport,
must
have
occurred
in
or
about
May
or
June
1978,
when
Jackson
was
a
vice-president
of
Burns.
Despite
presumably
good
vehicle
maintenance,
despite
the
inflationary
spiral
pushing
up
prices,
it
must
be
noted
that
in
May
or
June
1978,
some
six-and-a-half
years
after
Valuation
Day
those
were
mostly
very
thoroughly
used
vehicles
and
they
still
commanded
a
price
of
$952,000
albeit
from
another
presumably
special
purchaser,
Porter
Transport.
It
makes
one
wonder
why
Burns’
purchase
of
all
the
assets
of
Bow
Valley
for
$500,000
in
1974
and
$500,000
in
1976
would
be
seen
to
have
been
so
improvident.
Their
considerations
are
revealed
in
the
folio
containing
Exhibits
43
to
47.
No
matter
how
astute
was
the
Burns
high
management,
they
could
not
pretend
to
be
clairvoyant
in
1973,1974
and
even
in
1976,
but
they
did
quite
well
in
unloading
the
aging
rolling
stock
for
nearly
$1
million
in
mid-1978!
It
requires
no
diploma
to
realize
that
those
vehicles
when
earlier
more
nearly
new
would
have
fetched
a
much
higher
price
or,
in
inflationary
times,
would
sharply
exceed
their
numerical
dollar-value
as
they
aged
contemporaneously
with
rising
inflation.
That,
in
any
event,
is
what
happened
in
order
for
that
rolling
stock
of
Bow
Valley
which
Burns
acquired
in
1974
and
1976
to
have
commanded
a
fair
market
value
of
$952,000
in
mid-1978.
Evaluations
of
the
shares
in
operating
service
or
production
companies
are
difficult
enough,
because
so
speculative,
even
when
such
evaluations
are
attempted
closer
to
the
material
times.
The
Court
will
have
to
form
its
own
conclusions
necessarily
without
adopting
those
of
the
expert
witnesses.
That
was
done
in
the
adjudications
performed
by
Chief
Justice
McEachern,
then
of
the
Supreme
Court
of
British
Columbia
in
a
series
of
judgments
during
the
1980s,
pursuant
to
section
199
of
the
Canada
Business
Corporations
Act,
S.C.
1974-75-76,
c.
33.
The
travails
of
McEachern,
C.J.
began
with
the
case
of
Hudson
Bay
Mining
and
Smelting
Co.
v.
Lueck
(1980),
10
B.L.R.
113,
a
formidable
exercise
from
which
this
Court
would
have
been
pleased
to
adopt
the
approach
demon-
strated
therein
and
in
the
passages
recorded
at
pages
172
and
173
in
particular.
However,
McEachern,
C.J.
retreated
somewhat
from
the
above-cited
judgment,
although
not
in
necessary
repudiation
of
the
approach
here
admired,
in
his
later
judgment
in
Cyprus
Anvil
Mining
Corp.
v.
Dickson
(1982),
40
B.C.L.R.
180,
in
which,
at
196,
he
is
reported
as
having
written:
Re
Whitehorse
Copper
Mines
Ltd.
.
.
.
was
a
case
similar
to
this
one
under
the
[Canada
Business
Corporations
Act].
The
take-over
offer
was
to
acquire
all
the
shares
of
the
subject
company
at
a
price
of
$4
per
share.
I
found
that
the
fair
value
of
the
shares
was
$6.50
and
I
fixed
that
price
accordingly.
In
the
course
of
my
judgment
however,
relying
upon
Re
Can.
Allied
Property
Invt.
Ltd.,
supra,
I
expressed
the
view
that
the
power
to
fix
fair
value
"
does
not
change
the
principles
fairly
to
be
extracted
from
the
line
of
cases
starting
with
Re
Hoare
&
Co.
Ltd.,
supra".
I
find
myself
in
the
same
position
as
Bramwell
B.
in
Andrews
v.
Styrap
(1872),
26
L.T.
704
at
706,
when,
in
considering
one
of
his
earlier
decisions,
he
said:
"The
matter
does
not
appear
to
me
now
as
it
appears
to
have
appeared
to
me
then."
The
above-cited
judgment
did
not
end
the
matter
insofar
as
McEachern,
C.J.
was
concerned
for
in
May
1984,
he
rendered
supplementary
reasons
reported
as
Cyprus
Anvil
Mining
Corp.
v.
Dickson
(1984),
54
B.C.L.R.
225,
in
which
he
noted
in
opening
observations
at
pages
228-29:
In
a
case
of
this
kind
one
becomes
a
captive
of
a
method
of
valuation.
When
one
starts
down
the
discounted
cash
flow
path
he
cannot
easily
get
off.
In
this
case
I
had
to
consider
and
select
at
least
20
different
components
of
a
cash
flow
formula
ranging
from
multi-sided
items
such
as
ore
reserves
(tonnage
and
grade
for
four
different
minerals),
metallurgy
for
four
metals,
mining
plan,
mining
costs,
discount
rate
and,
most
important,
future
metal
prices,
and
many
other
items.
In
this
respect
I
selected
figures
suggested
by
Cyprus
Anvil
on
many
components
including
the
middle
range
of
its
suggested
metal
prices
and
one
of
its
suggested
discount
rates.
Having
made
these
difficult
choices,
I
feel
constrained,
as
was
said
of
General
Grant,
to
let
the
chips
fall
where
they
may,
even
though
the
result
seems
very
generous
to
the
respondents.
I
say
this
because
I
do
not
think
this
is
a
kind
of
case
where
a
judge
can
employ
a
discounted
cash
flow
method
and
then
adjust
the
result
if
it
seems
too
high
or
too
low
as
is
permissible
in
personal
injury
or
fatal
accident
cases
like
.
.
.
Further,
I
see
no
reason
to
change
any
of
the
factors
in
the
equation
(except
the
question
of
the
mill)
which
were
all
so
fully
ventilated
in
a
long
trial.
Cyprus
Anvil
says
my
postulated
ore
reserves
are
too
high,
but
I
think
the
figures
suggested
by
Cyprus
Anvil
were
too
low,
and
in
such
circumstances
one
must
make
choices.
Also,
Cyprus
Anvil
says
my
future
metal
prices
are
too
high
but,
as
mentioned,
I
chose
the
middle
range
of
the
prices
Cyprus
Anvil
suggested.
Similarly,
Cyprus
Anvil
now
says
the
mining
plan
is
not
realistic,
but
it
is
basically
the
plan
Cyprus
Anvil
itself
described
as
its
preferred
plan
when
its
management
was
persuading
its
directors
to
develop
these
properties.
In
short,
I
do
not
think
it
is
possible
to
adopt
a
method
and
then
disregard
the
result.
If
I
were
to
adjust
the
result
I
would,
in
fairness,
have
to
re-litigate
all
the
factors
in
the
equation
and
I
think
one
trial
of
issues
properly
joined
is
quite
enough.
Then
at
the
end
of
his
reasons,
McEachern,
C.J.
having
set
out
the
factors
found
by
himself
to
be
correct,
he
expressed
his
hope
and
expectation
that
the
parties
would
then
be
able
themselves
to
calculate
fair
value
for
the
shares
in
accordance
with
the
provisions
of
section
199
of
the
Canada
Business
Corporations
Act.
Such
a
disposition
is
not
appropriate
here
where
the
issue
is
to
find
the
fair
market
value
of
Pyramid's
shares
pursuant
to
the
Income
Tax
Act.
The
purpose
of
the
citation
here
of
the
above
recited
jurisprudence
is
not
to
highlight
the
substantive
and
particular
issues
of
those
decisions,
but
rather
to
note
that,
Chief
Justice
McEachern
having
been
faced
with
a
similar
task
as
confronts
the
Court
here,
and
on
some
matters
"
having
been
deserted
by
the
experts"
as
noted
on
page
232
of
the
supplementary
reasons,
he
formed
his
own
evaluation
in
effect.
That
is
not
so
remarkable
as
the
plaintiff's
counsel
seems
to
believe.
The
matter
did
not
rest
where
Chief
Justice
McEachern
left
it,
however.
On
appeal
to
the
British
Columbia
Court
of
Appeal
the
case
is
further
reported
as
Cyprus
Anvil
Mining
Corp.
v.
Dickson
(1986),
8
B.C.L.R.
(2d)
145;
33
D.L.R.
(4th)
641,
a
split
decision
with
Esson,
J.A.
(as
he
then
was)
dissenting
and
with
the
majority
decision
being
rendered
by
Lambert,
J.A.
with
Hinkson,
J.A.
concurring
therein.
The
Appeal
Court's
majority
found
that
the
“result
is
“wholly
erroneous':
.
.
.
that
the
approach
that
was
adopted
was'clearly
and
palpably
wrong’,
with
respect
to
matters
of
fact,
in
that
relevant
evidence
of
the
negotiated
deal
between
Cyprus
Anvil
and
Kerr
Addison
was
entirely
set
aside
and
given
no
weight",
as
reported
at
page
159
(D.L.R.
654).
An
important
passage
in
the
reasons
of
Mr.
Justice
Lambert
is
reported
at
pages
158-59
(D.L.R.
652-53),
thus:
It
is
not
necessary
for
me
to
analyze
those
cases
or
to
quote
from
them.
[Jurisprudence
written
by
Macfarlane,
J.
in
which
he
considered
certain
U.S.
cases.]
The
point
that
they
emphasize
is
that
the
problem
of
finding
fair
value
of
stock
is
a
special
problem
in
every
particular
instance.
It
defies
being
reduced
to
a
set
of
rules
for
selecting
a
method
of
valuation,
or
to
a
formula
or
equation
which
will
produce
an
answer
with
the
illusion
of
mathematical
certainty.
Each
case
must
be
examined
on
its
own
facts,
and
each
presents
its
own
difficulties.
Factors
which
may
be
critically
important
in
one
case
may
be
meaningless
in
another.
Calculations
which
may
be
accurate
guides
for
one
stock
may
be
entirely
flawed
when
applied
to
another
stock.
The
one
true
rule
is
to
consider
all
the
evidence
that
might
be
helpful,
and
to
consider
the
particular
factors
in
the
particular
case,
and
to
exercise
the
best
judgment
that
can
be
brought
to
bear
on
all
the
evidence
and
all
the
factors.
I
emphasize:
it
is
a
question
of
judgment.
No
apology
need
be
offered
for
that.
Parliament
has
decreed
that
fair
value
be
determined
by
the
courts
and
not
by
a
formula
that
can
be
stated
in
the
legislation.
Where
Parliament
has
called
for
judgment,
and
where
judgment
is
being
exercised,
the
scope
of
the
judgment
should
not
be
obscured.
If
the
judgment
is
about
which
formula
to
adopt,
then
that
should
be
made
clear;
if
the
judgment
is
about
the
assumptions
to
which
the
formula
is
to
be
applied,
then
that
also
should
be
made
clear;
and
if
the
judgment
is
about
the
final
result,
with
the
formula
being
treated
only
as
an
aid,
then
that
should
be
apparent.
I
should
add
that
a
number
of
issues
that
could
be
said
to
arise
from
the
provisions
of
s.
199
were
not
argued
at
trial,
and
some
of
the
issues
argued
at
trial
were
not
argued
in
this
appeal.
None
of
those
issues
is
discussed
in
these
reasons.
Lambert,
J.A.
then
continued,
as
reported
at
page
160
(D.L.R.
654):
In
particular,
when
the
Chief
Justice
said
that
"one
becomes
a
captive
of
a
method
of
valuation.
When
one
starts
down
the
discounted
cash
flow
path
[one]
cannot
easily
get
off”
(54
B.C.L.R.
at
page
228);
and
when
he
said,
"Having
made
these
difficult
choices,
I
feel
constrained,
as
was
said
of
General
Grant,
to
let
the
chips
fall
where
they
may,
even
though
the
result
seems
very
generous
to
the
respondents"
(54
B.C.L.R.
at
page
228),
I
think
that
he
fell
into
the
error
of
letting
adherence
to
a
mathematical
formula
usurp
the
exercise
of
judgment
called
for
by
the
statutory
powers
granted
to
the
court
by
s.
199.
It
is
true
that
the
discounted
net
cash
flow
method
of
indicating
value
cannot
be
tinkered
with,
in
the
sense
that
it
loses
utility
unless
it
is
applied
in
accordance
with
ascertained
facts
and
neutral
judgment,
uncoloured
by
the
result
that
intuition
might
appear
to
favour.
But
having
got
the
result
by
that
method,
the
next
step
must
be
to
consider
whether
the
method
itself
may
be
something
less
than
entirely
reliable.
If
so,
the
result
should
be
given
weight
in
proportion
to
its
reliability,
and
regarded
as
only
one
among
the
considerations
from
which
the
court,
acting
on
all
the
evidence,
should
derive
fair
value.
It
was
that
next
step
that
was
omitted
in
this
case.
So,
it
appears
after
all
that
the
majority
considered
that
Chief
Justice
McEachern
did
not
carry
his
intellectual
exercise
far
enough.
His
conclusions
arrived
at,
or
produced,
a
value
of
each
share
of
$19.04.
The
majority
of
the
Court
of
Appeal
reviewed
the
evidence
as
they
reviewed
the
Chief
Justice's
reasons
and
came
to
their
own
factual
pragmatic
conclusion,
thus
(page
164
(D.L.R.
658)):
Having
regard
to
all
of
the
factors
I
have
mentioned,
and
to
all
the
evidence
discussed
by
the
Chief
Justice
and
in
these
reasons,
it
is
my
best
judgment
that
the
fair
value
of
the
shares,
for
the
purposes
of
s.
199
of
the
Canada
Business
Corporations
Act,
is
$8
per
share.
In
the
result,
although
Chief
Justice
McEachern
hinted
at
the
possibility
of
coming
to
his
own
conclusion
upon
the
shares'
fair
value,
the
Court
of
Appeal
in
its
majority
judgment
concluded
that
he
really
did
not
do
that
and,
that,
in
the
circumstances
he
ought
to
have
done
that
at
which
he
hinted.
They
did
it.
The
approach
adopted
by
this
Court
in
the
case
at
bar
is
that
which
was
ultimately
followed
under
section
199
of
the
Canada
Business
Corporations
Act
by
the
British
Columbia
Court
of
Appeal.
Having
earlier
herein
stated
reasons
enough
for
not
accepting
the
expert
witnesses'
approaches
and
conclusions,
the
Court
must
nevertheless
exercise
the
judgment
which
Parliament
exacts
despite
its
not
having
stated
in
the
Income
Tax
Act
any
definition
of
"fair
market
value”.
When
Mr.
Palmer
swore
that
had
the
plaintiff
expressed
a
more
sober
value
or
price
for
Bow
Valley
Transport
of
$1
million,
McCain
would
not
have
been
so
quick
to
walk
away,
he
was
not
purporting
to
evaluate
the
enterprise
at
that
sum.
Rather
it
was
a
sum
at
which
McCain
might
well
have
started
negotiating
toward
a
lower
price
indicative
of
fair
market
value
of
a
specialized
enterprise
to
a
special
purchaser.
Similarly,
the
sum
of
$900,000
expressed
in
Exhibits
17
and
36
on
Turbo
letterhead
is
not
accepted
by
the
Court
as
evidence
of
fair
market
value.
That
sum
is
more
credible,
as
already
found,
because
it
was
retrieved
by
Mr.
Brawn
more
recently
after
the
material
time
than
any
of
the
other
attempts
at
fixing
value
ex
post
facto
and
it
was
established
in
consultation,
however
brief,
with
Mr.
Schneider.
But
on
cross-examination
of
Mr.
Brawn
and
in
the
testimony
of
Mr.
Schneider
it
became
clear
that,
whatever
the
since-
destroyed
file
might
have
held,
no
real,
or
any
negotiations"
were
conducted
with
the
plaintiff,
who
stated
his
price
to
be
$900,000.
While
that
sum
seemed
not
to
agitate
Brawn,
Schneider
or
the
other
members
of
the
Turbo
board
(it
was,
rather,
their
real
or
feigned
misconception
that
Bow
Valley
was
only
a
meat
carrier),
it
too
cannot
be
taken
as
a
fair
market
value,
but
only
a
high
approximation.
In
conclusion,
having
regard
to
all
of
the
evidence,
factors
and
conclusions
mentioned
above
herein,
and
keeping
sight
of
the
above
already-determined
fair
market
value
of
the
real
property
in
the
included
amount
of
$82,700,
and
the
Bow
Valley
Transport
enterprise
is
to
be
evaluated
as
a
going
concern,
with
the
well-maintained
rolling
stock
and
real
property
above
mentioned,
and
considerable
commercial
goodwill
all
derived
from
the
management
skill
then
exhibited,
the
Court
finds
that
the
fair
market
value
of
the
Pyramid
shares
in
regard
to
the
Bow
Valley
Transport
enterprise
alone,
as
of
December
31,
1971,
was
$6,997
each.
The
parties
seek
the
Court's
judgment
in
the
premises
and
there
it
is,
translating
into
a
fair
market
value
of
the
whole
trucking
enterprise
in
the
global
amount
of
$699,700
on
Valuation
Day.
The
price
of
$10,000
per
share
paid
by
Burns
in
two
instalments,
as
it
were,
in
1974
and
1976
must
be
regarded
as
a
premium
price
and,
if
not
improvident
of
Burns,
then
it
was
a
slight
windfall
for
the
plaintiff
although
it
is
obvious
that
the
value
of
the
Bow
Valley
Transport
enterprise
did
really
increase
between
Valuation
Day
and
1974
and
1976.
So
the
plaintiff
did
well
on
the
sale
of
his
Pyramid
shares
to
Burns
and
realized
a
capital
gain
in
excess
of
inflation's
onward
march.
Given
the
enthusiasm
and
persuasiveness
of
the
plaintiff,
recounted
in
the
testimony
of
several
witness
or
lurking
inferentially
therein,
it
may
be
that
he
could
have
sold
his
shares
at
a
better
price
than
the
classically
defined
fair
market
value
even
in
December
1971,
but
he
did
not
and,
it
may
be
observed,
he
could
not.
Even
the
considered
price
of
$9,000
per
share
was
seen
to
be
too
rich
for
a
sale
price
to
a
special
purchaser
at
or
near
Valuation
Day.
The
sum
of
$6,997
is
the
just-right
fair
market
value
of
each
of
the
100
shares
as
of
that
day,
in
the
Court's
judgment.
The
plaintiff
will
have
judgment
from
the
defendant,
as
well,
for
80
per
cent
of
his
costs
after
taxation
in
view
of
the
lopsided
division
of
success
by
the
parties.
The
Minister's
reassessments
of
the
plaintiff's
tax
position
in
1974
and
1976
will
be
referred
back
to
the
Minister
who
is
directed
to
perform
a
reassessment
in
accordance
with
these
reasons.
These
reasons
shall
serve
for
both
concurrent
actions
and
a
copy
of
them
shall
be
lodged
in
each
of
files
T-2321-82
and
T-2322-82.
Appeal
allowed
for
the
most
part.
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