Roland
St-Onge
[TRANSLATION]:—The
appeal
of
Station
Canada
&
Gulf
Terminal
Inc
came
before
me
on
May
22,
1980
in
Quebec
City,
Quebec.
The
question
relates
to
determining
the
value
of
a
piece
of
land
on
December
31,
1971
so
as
to
establish
the
amount
of
the
capital
gain
for
the
1975
taxation
year.
The
facts
of
this
appeal
are
clearly
set
forth
in
paragraph
14
of
the
amended
reply
to
the
amended
notice
of
appeal,
which
reads
as
follows:
In
assessing
the
appellant,
the
respondent
relied,
inter
alia,
on
the
following
presumptions
of
fact:
(a)
On
February
17,
1975,
the
appellant
concluded
an
agreement
with
Chemin
de
Fer
de
Matane
et
du
Golfe
Inc
(hereinafter
referred
to
as
“Chemin
de
Fer”);
(b)
The
purpose
of
the
agreement
was
the
exchange
of
land
between
the
appellant
and
Chemin
de
Fer;
(c)
The
appellant
transferred
pieces
of
land
worth
a
total
of
$368,197
to
Chemin
de
Fer;
(d)
The
fair
market
value
of
pieces
of
land
transferred
by
the
appellant
was
not
more
than
$152,000
on
December
31,
1971;
(e)
Among
the
pieces
of
land
transferred
by
the
appellant
was
lot
191-7,
whose
fair
market
value
on
December
31,
1971
was
$42,600
at
the
very
most;
(f)
In
its
tax
return
(T-2)
for
the
1975
taxation
year
and
in
the
financial
statements
attached
to
the
return,
the
appellant
declared
a
taxable
capital
gain
of
$3,766.60;
(g)
According
to
the
T-2S
(6)
form
which
the
appellant
attached
to
the
said
tax
return,
the
appellant
established
its
taxable
capital
gain
as
follows:
|
Proceeds
of
disposition
|
$368,197.00
|
|
Adjusted
cost
base
|
350,663.81
|
|
Disbursements
and
expenses
|
|
10,000.00
|
|
Capital
gain
|
$
|
7,533.19
|
|
Taxable
capital
gain
|
$
3,766.60
|
A
number
of
witnesses
were
heard.
Representing
the
firm
of
Ménard,
Marsan
&
Associés
of
Rimouski,
Mr
Ménard
determined
a
valuation
day
or
“V-Day”
value
of
$0.32
per
square
foot.
The
witness
Jacques
Sauriol,
of
the
firm
of
Leroux,
Beaudry,
Picard
&
Associés
Inc,
set
the
value
at
$0.265
per
square
foot,
without
taking
improvements
into
account.
When
I
asked
him
what
the
value
per
square
foot
would
be
if
the
value
of
improvements
was
taken
into
account,
he
set
the
price
per
square
foot
at
$0.33.
Mr
Alain
Renault
of
the
Sonarex
firm
of
Quebec
City
set
the
value
of
a
square
foot
at
$0.31.
On
the
other
hand,
the
expert
witness
for
the
Minister
produced
his
valuation
report
and
stated
that
the
value
of
the
land
in
question
was
$0.05
per
square
foot.
His
main
point
of
reference
as
to
the
value
of
the
land
was
that
land
in
the
industrial
park
had
been
sold
for
$0.05
per
square
foot.
A
great
deal
of
discussion
took
place
at
the
hearing.
All
sorts
of
theories
were
advanced
and
all
sorts
of
principles
were
referred
to,
such
as
the
definition
of
market
value
and
the
law
of
supply
and
demand;
the
more
the
facts
were
analysed,
the
more
confused
the
issue
became.
As
a
Member
of
the
Board,
it
is
my
responsibility
to
set
an
amount.
I
am
taking
into
consideration
the
fact
that
there
were
lots
in
the
industrial
park
which
were
sold
for
$0.05
per
square
foot,
as
well
as
the
unexplained
fact
that
there
is
too
great
a
difference
between
the
price
of
disposition
of
$0.31
per
square
foot
and
the
price
of
$0.05
set
by
the
Minister.
The
lots
in
the
industrial
park
which
were
sold
for
$0.05
per
square
foot
were
sold
at
that
price
in
order
to
attract
industries
and
are
not
a
“comparable”
case
on
which
to
base
the
true
value
of
the
land
at
issue
here.
Therefore,
the
magic
figure,
if
there
is
one,
is
$0.20
per
square
foot,
in
my
opinion.
Consequently,
the
appeal
is
allowed
in
part
and
is
referred
back
to
the
Minister
for
reassessment
so
that
the
capital
gain
may
be
established
on
the
basis
of
the
value
of
the
land
on
December
31,
1971,
which
was
$0.20
per
square
foot.
Appeal
allowed
in
part.
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