Bonner,
T.C.J.:—This
is
an
appeal
from
an
assessment
of
income
tax
for
the
appellant's
1982
taxation
year.
On
assessment
the
respondent
disal-
lowed
the
deduction
of
$5,811.60
claimed
by
the
appellant
under
section
62
of
the
Income
Tax
Act
as
a
moving
expense.
It
was
the
appellant’s
position
that
the
payment
in
question
was
within
the
meaning
of
paragraph
62(3)(e)
of
the
Act,
a
selling
cost
in
respect
of
the
sale
of
his
old
residence.
A
person
who
proposed
to
purchase
the
appellant’s
house
required
new
mortgage
financing.
He
would
not
have
been
able
to
obtain
a
mortgage
in
the
desired
principal
amount
at
mortgage
rates
current
at
the
time
of
sale
because
the
resultant
monthly
mortgage
repayments
would
have
exceeded
limits
fixed
by
mortgagees
in
relation
to
the
ability
of
the
borrower
to
pay.
Accordingly,
a
deal
was
struck
whereby
the
appellant
agreed
to
pay
to
the
mortgagee,
or
proposed
mortgagee,
an
amount
in
consideration
of
which
the
payee
would
reduce
the
interest
rate
on
the
contemplated
mortgage
to
17
per
cent
for
a
period
of
two
years.
That
arrangement
was
set
forth
in
the
agreement
of
purchase
and
sale
between
the
appellant
and
the
purchaser,
Exhibit
A-1.
The
consideration
paid
by
the
appellant
to
the
mortgagee
is
the
amount
in
question
in
this
appeal.
It
was
the
position
of
the
respondent
that
the
$5,811.60
represented
an
adjustment
in
the
money
realized
on
the
sale
of
the
old
residence.
That
assumption
is
set
forth
in
paragraph
3(b)
of
the
reply
to
notice
of
appeal.
Counsel
for
the
respondent
argued
further
that
the
payment
does
not
fit
within
the
ordinary
and
grammatical
meaning
of
the
statutory
words
"selling
costs".
As
to
the
assumption
pleaded
in
paragraph
3(b)
of
the
reply,
it
does
not
follow
from
the
fact
that
the
appellant
might
have
chosen
to
agree
to
a
reduction
in
the
purchase
price
sufficient
to
enable
the
purchaser
to
qualify
for
the
mortgage
that
a
payment
made
to
achieve
the
same
end
by
different
means
must
be
treated
as
if
it
were
such
a
reduction.
Generally
speaking,
taxation
rests
on
the
application
of
the
statute
to
the
facts
as
they
were,
not
to
the
facts
as
they
might
have
been.
The
evidence
here
supports
only
one
finding,
namely,
that
the
appellant
chose
to
make
the
payment
to
the
mortgage
lender
in
order
to
bring
about
the
sale
and
that
he
rejected
other
courses
of
action
which
he
might
have
adopted,
such
as
reducing
the
purchase
price.
I
therefore
turn
to
the
next
question,
whether
the
amount
in
issue
was
a
"selling
cost”
within
the
ordinary
meaning
of
the
words
of
paragraph
62(3)(e).
In
my
view
it
was
because
the
sale
was
the
only
thing
which
the
appellant
desired
to
achieve
and
did
achieve
as
a
result
of
the
payment.
This
is
not
analogous
to
the
cost
of
improving
the
price
of
the
thing
to
be
sold
by
improving
the
thing
itself,
as
might
be
the
case
where
money
is
spent
to
paint
a
house
preparatory
to
sale
or
as
might
be
the
case
where
payment
is
made
to
change
the
terms
of
an
existing
mortgage.
The
appellant's
direct
and
immediate
object
in
making
the
payment
was
but
one
thing,
to
effect
the
sale,
and
that,
in
my
view,
was
a
selling
cost
within
the
ordinary
meaning
of
paragraph
62(3)(e).
The
appeal
will
therefore
be
allowed
with
costs
and
the
assessment
referred
back
to
the
respondent
for
reconsideration
and
reassessment
on
the
basis
that
the
appellant
is
entitled
to
deduct
the
$5,811.60
in
question.
Appeal
allowed.
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