Patrick A. Good v. Her Majesty the Queen, [1994] 1 CTC 25, 94 DTC 6078

Strayer, J.:— This is an appeal from a decision of the Tax Court of Canada dated February 5, 1990, in which that Court dismissed the appeal of the plaintiff with respect to the Minister's reassessment of the plaintiff's 1984 taxation year. In that reassessment dated June 27, 1988, the Minister allowed only part of a non-capital loss claimed by the plaintiff with respect to 1984. The sole issue is as to when the plaintiff disposed of certain property, being four "units" of a joint venture which joint venture was engaged in managing and developing certain real property in Vancouver. The plaintiff has taken the position that he did not dispose of this property until 1985, and therefore he should be entitled to deduct the operating losses flowing through to his units for the whole of 1984 (sometimes he takes the position that he had disposed of .6 units in April 1984). The Minister takes the position that as of February 11, 1984, the plaintiff had disposed of his four units, he becoming entitled as of that date to payment of $50,000 from Young and Eng (partners in the joint venture) as purchasers of his units. It is common ground that in April 1984 the plaintiff received $7,500 from Mr. Eng. The Minister treats that as a partial payment of the $50,000 which became payable on February 11, 1984. The plaintiff now asserts that the $7,500 was a token of good faith and not a part payment of a purchase price. The net result is that the Minister has allowed the plaintiff his non-capital losses for 1984 flowing from the joint venture up until February 11 of that year but has disallowed them for the remainder of the year. The plaintiff contends that there was no disposition until 1985 when he succeeded in obtaining a default judgment against Messrs. Young and Eng for $42,500 plus interest commencing thereon as of February 11, 1984. He therefore claims entitlement to deduct noncapital losses for the whole of 1984.

Although, of course, the matter proceeded before me as a trial de novo I am unable to identify any new evidence before me that was not before the Tax Court. I agree entirely with the findings of fact and the conclusions of fact and law of the learned Tax Court Judge. I have reviewed the authorities and arguments presented to me by counsel for the plaintiff but I am unable to find in them any basis for disagreeing with the Tax Court decision. While the agreement for repurchase by Young and Eng of the plaintiff's units is very imprecise, I am satisfied that it contains an adequate indication of intention on the part of the parties that in the circumstances of this case the plaintiff was entitled to be paid $50,000 by Young and Eng on Februar 11, 1984 for the sale to them of his units. The plaintiff had given the requisite 30 days' notice of his wish to be bought out. Young and Eng were then obliged within that 30 days, that is by February 11, to buy him out. Conceivably they could have elected to pay him in the latter part of January, in which case it is arguable that the vague provisions of paragraph 3.3 would have applied for determination of the price. But when they failed to do that and February arrived they were then in my view obliged to pay by the formula prescribed in paragraph 3.1 of the agreement, namely to pay the plaintiff $12,500 per unit for four units. Further, I think the only reasonable interpretation of what happened between the plaintiff and Eng in April, 1984, when Eng paid him $7,500, was that this was seen by both parties as a partial payment of the $50,000. Certainly the plaintiff so treated it in the subsequent action which he successfully brought in the Supreme Court of British Columbia. In his statement of claim and his affidavit in that proceeding he asserted that position. He has failed to provide any credible evidence, in my view, that some other arrangement prevailed.

While I am doubtful that the position he took in the action against Young and Eng in the Supreme Court of British Columbia can amount to estoppel against him in these proceedings, the statements made in that action by him or on his behalf may be viewed as statements inconsistent with the evidence he has given in the present action and thus bring the latter into serious doubt.

Counsel for the plaintiff has referred to a number of authorities concerning the precision required in contracts for the sale of interests in land, in order to attack the validity or adequacy of the agreement in dispute. In my view there is no agreement for the sale of land involved in this case but only an agreement for the repurchase of some units of a joint venture. This did not require any elaborate spelling out of terms and the contract entered into by the parties, though hopelessly inadequate in many respects, is sufficiently clear as to the nature of the transaction in February, 1984. Counsel made some reference to the Law and Equity Act, R.S.B.C. 1979 c. 224, section 54, which provides that a contract respecting land is not enforceable unless, inter alia, the person to be charged under the contract has signed it. It was suggested that because the copy of the repurchase agreement provided to the Court did not bear the signature of the plaintiff, it cannot be enforced against him. I do not accept this line of argument. In the first place the plaintiff himself said on the witness stand that he “probably” signed the original of the document which would have been kept by Young and Eng. The copy he kept, which was filed in Court, only had their signatures on it. Further, this in my view is not a contract respecting land or the disposition of land nor did the present proceedings involve the enforcement of that contract against the plaintiff.

The appeal must therefore be dismissed and the reassessment of the Minister confirmed.

Appeal dismissed.