Glaxo Wellcome Inc. v. Canada, docket A-114-96

Date: 19981009

Docket: A-114-96

CORAM:      DESJARDINS, J.A.

         LINDEN, J.A.

         LETOURNEAU, J.A.

BETWEEN:

GLAXO WELLCOME INC.

Appellant

- and -

HER MAJESTY THE QUEEN

Respondent

     REASONS FOR JUDGMENT

     [Delivered from the Bench at Toronto, Ontario

     on Thursday, October 8, 1998]

DESJARDINS J.:

[1]      Despite the valiant effort of counsel for the appellant, we agree with the interpretation given by Bowen J.T.C.C. to the word "used" in the definition of "former business property¹" within the meaning of section 44 of the Income Tax Act, particularly where he said that the word ""use" connotes actual utilization for some purpose, not holding for future use²".

[2]      The Tax Court Judge encapsulated his reasoning, with which we agree, as follows:

[The property] was intended to be used, it was waiting to be used but in any meaningful sense of the term, it was not being used.3

[3]      There is nothing we could say better than what was stated by him in his analysis⁴.

[4]      This appeal will be dismissed with costs.

                         "A. Desjardins"

                             J.A.

TORONTO, ONTARIO

October 9, 1998

              FEDERAL COURT OF CANADA

     Names of Counsel and Solicitors of Record

DOCKET:                              A-114-96

STYLE OF CAUSE:                          GLAXO WELLCOME INC.

                                 - and -

HER MAJESTY THE QUEEN

        

DATE OF HEARING:                      THURSDAY, OCTOBER 8, 1998

PLACE OF HEARING:                      TORONTO, ONTARIO

REASONS FOR JUDGMENT BY:                  DESJARDINS, J.A.

Delivered at Toronto, Ontario

on Thursday, October 8, 1998

APPEARANCES:                 

                                 Mr. Geoffrey D. E. Adair

                    

                                     For the Applicant

                                 Ms. Judith Sheppard

                                     For the Respondent

SOLICITORS OF RECORD:                 

                                 Enfield, Adair, Wood & McEwen

Barristers & Solicitors

                                 810-1 Queen Street East

                                 Toronto, Ontario

                                 M5C 2W5

                                     For the Appellant

    

                                 Morris Rosenberg

                                 Deputy Attorney General

                                 of Canada

            

                                     For the Respondent

---

FEDERAL COURT OF APPEAL

Date: 19981009

Docket: A-114-96

BETWEEN:

GLAXO WELLCOME INC.

Applicant

-and-

HER MAJESTY THE QUEEN

Respondent

REASONS FOR JUDGMENT

__________________

     ¹      "Former Business Property" is thus defined in section 248 of the Income Tax Act S.C. 1970-71-72 c. 63 as it stood in the taxation year 1988:

"former business property" of a taxpayer means a capital property that was used by him primarily for the purpose of gaining or producing income from a business, and that was real property or an interest therein of the taxpayer, but does not include, ... [Emphasis added]

"ancien bien d'entreprise" d'un contribuable s'entend d'un bien en immobilisation qu'il a utilisé principalement en vue de tirer un revenu d'une entreprise et qui était un bien immeuble ou un droit du contribuable sur un tel bien, mais ne comprend pas ... [Je souligne]

     ²      AB 120

     ³      AB 126

     ⁴      The decision is reported as Glaxo Wellcome Inc. v. Her Majesty the Queen at 96 D.T.C. 1159 and [1996] 1 C.T.C. 2904.