Rodman Construction Inc. v. The Queen, 75 DTC 5038, [1975] CTC 73 (FCTD)

The non-resident taxpayer received payments on a non-interest bearing mortgage between 1964 and 1969 after showing the deed to a Revenue Canada assessor, who indicated that s. 16(1) would not apply. In 1971 Revenue Canada assessed on the basis that ss.16(1) and 214(2) applied. Decary, J. stated in obiter dicta: "It cannot be said in the present instance that due despatch has been used by the Minister: 7 years after the deed, 2 years after the last instalment. Despatch means promptitude, speed."

An owner of Canadian land mortgaged his land on a non-interest bearing basis and then sold the land to the taxpayer, a non-resident, which assumed the mortgage. Decary, J. stated that in determining whether interest should be imputed on the payments to the taxpayer "the prime factor to be considered is whether or not the fair market value has been paid" and accepted the taxpayer's evidence that the purchase price for the property was equal to its fair market value. "There is a difference between a loan without interest granted someone and a loan without interest assumed by a third party."