John Flood, Norman E Greenaway v. Minister of National Revenue, [1980] CTC 2102, 80 DTC 1100

Roland St-Onge:—The appeals of Mr John Flood and Mr Norman E Greenaway came before me on October 12, 1979, at the City of Saskatoon, Saskatchewan and were heard on common evidence.

The issue is the valuation of an asset on V-Day for the purpose of fixing the amount of the taxable capital gain for the appellants’ 1974 taxation year.

The facts of these appeals are well set forth in the reply to notice of appeal at paragraphs 2 to 7 inclusive which read as follows:

2. The appellant and Messrs John Flood and Roy Good, operating as a partnership, acquired a parcel of land comprised of 7.9 acres more or less, (“the land’’) in April 1968 for $7,570.

3. On January 1, 1971, the partnership of Flood, Good and Greenaway was dissolved, and Mr Good transferred his one-third undivided interest in the land to the appellant and Mr John Flood for one-third of $7,570, or $2,523.33, by agreement dated October 7, 1971.

4. In October 1974 the appellant and Mr Flood transferred the land into a corporation controlled by them, Boundary Construction Ltd and an election pursuant to section 85 of the Income Tax Act was made whereby the land was rolled over to the corporation at $47,948.42

5. The appellant contends that the amount of $47,948.42 represents the V-Day value for the land.

6. Upon reassessment, the respondent, reassessed the appellant so as to include a taxable capital gain of $4,062.10 on the disposition of the land which was calculated as follows:

Proceeds of Disposition		$47,948.42
Less ACB—value at V-Day		31,700.00
Capital gain		$16,248.42
Taxable capital gain (1/2)		8,124.21
Share to:
N Greenaway	$4,062.10
J Flood	4,062.10

7. In so assessing the appellant, the respondent, assumed inter alia, that:

(a) The appellant realized a taxable capital gain in the amount of $4,062.10;

(b) The fair market value of the land as at Valuation Day, was $31,700.

The Board was very much impressed by the evidence given by Mr Murray James Cooney, real estate appraiser for the respondent. As a matter of fact, the onus was on the appellants to destroy the value of the appraisal report and they failed completely to do so.

I am not going into all the details and the different approaches but I have followed the evidence very carefully and the method used by Mr Cooney was the proper one in the circumstances.

Consequently, I rest my decision on this report and the appeals have to be dismissed.

Appeals dismissed.