Roland
St-Onge:—The
appeal
of
Howden
Brothers
Construction
Ltd
came
before
me
on
October
10,
1979,
at
the
City
of
Saskatoon,
Saskatchewan.
The
issue
is
whether
concrete
forms
fall
in
Class
12,
Schedule
B
of
the
Regulations
to
the
Act,
allowing
the
appellant
to
claim
capital
cost
allownces
at
the
rate
of
100%,
or
in
Class
10
of
the
same
Schedule
which
would
allow
the
appellant
to
claim
a
capital
cost
allowance
at
the
rate
of
only
30%
in
his
1977
taxation
year.
It
is
admitted
that:
(1)
the
appellant
is
in
the
business
of
constructing
concrete
basements
for
houses
and
other
buildings,
and
that
it
requires
forms
to
hold
the
wet
concrete
in
place
until
it
sets;
(2)
that
during
his
1977
taxation
year,
the
appellant
purchased
metal
forms
at
a
cost
of
$45,700.
The
respondent
did
not
want
to
allow
capital
cost
allowance
at
the
rate
of
100%
but
only
30%.
In
the
following
allegations
of
fact
of
the
reply
to
the
notice
of
appeal,
it
was
Stated:
6.
In
so
assessing
the
appellant,
the
respondent
assumed,
inter
alia,
that:
(a)
the
metal
forms
consist
of
a
contractor’s
movable
equipment;
(b)
are
not
in
the
form
of
a
dye,
jig,
pattern,
mould
or
last;
(c)
the
metal
forms
were
neither
hollow
nor
a
fixed
pattern
or
shape,
but
usually
consisted
of
metal
sheets
which
were
assembled
on
each
building
site
to
match
the
dimensions
of
a
particular
house
under
construction.
At
the
hearing,
Mr
Thomas
Howden,
secretary
of
the
appellant
company,
explained
that
the
forms,
which
were
of
aluminum,
were
used
solely
to
hold
the
wet
concrete
in
place.
These
metal
concrete
forms
were
preferable
to
wooden
forms
because
of
their
lightness
and
measured
two
to
three
feet
wide
by
eight
feet
high.
When
assembled,
they
were
joined
by
pins
and
at
times
some
sheets
had
to
be
cut
in
order
to
allow
the
beams
to
run
into
the
forms.
On
cross-examination,
the
witness
explained
that
the
aluminum
sheets
had
to
be
carried
by
truck
and
had
to
be
assembled
on
an
average,
at
three
to
four
houses
a
week,
and
that
a
set
of
aluminum
forms
could
last
from
three
to
four
years,
whereas
the
wooden
forms
would
last
only
three
months.
Mr
Stanley
Thorpe,
a
chartered
accountant
with
the
appellant
company
Since
1974,
testified
that
the
latter
had
been
in
the
business
of
constructing
concrete
basements
since
1974;
that
he
does
not
see
any
difference
between
wooden
and
aluminum
forms
for
the
purpose
of
claiming
capital
cost
allowance.
Moreover,
as
an
accountant,
he
generally
claims
at
the
rate
of
100%
for
this
type
of
material
used
in
the
construction
of
houses.
Counsel
for
appellant
argued
that
the
aluminum
forms
are
not
included
in
any
other
class
and
come
under
Class
12(d)
and
should
be
considered
as
a
mold.
Then
he
gave
the
following
definition
of
a
mold:
The
matrix
in
which
anything
is
cast
and
receives
its
forms
to
form
into
a
practical
shape;
a
matrix—that
which
encloses
anything
or
gives
origin
to
anything;
the
form
or
mold
in
which
something
is
shaped
.
..
According
to
counsel
for
appellant,
the
aluminum
sheets
do
not
come
within
Class
10(a)
as
contractor’s
movable
equipment
because
they
are
transportable
and
not
movable.
Moreover,
they
fall
under
Class
12(d)
as
a
mold
because
when
they
are
put
together,
they
are
a
mold.
Counsel
for
respondent
argued
that
if
the
forms
were
made
out
of
wood,
it
would
be
proper
to
write
them
off
at
a
rate
of
100%
because
they
lasted
only
three
months
and
could
be
considered
as
expenses
to
earn
income
in
the
year
but
because
the
sheet
metal
lasts
much
longer,
they
must
fall
under
Class
10(h)
and
be
depreciated
at
the
rate
of
30%.
He
went
on
to
say
that
they
are
movable
and
not
in
the
nature
of
a
mold:
movable
because
they
can
be
moved
from
one
site
to
another
and
are
not
in
the
nature
of
a
fixture.
They
are
not
a
mold
because
the
sheets
themselves
are
not
a
mold,
and
they
can
be
assembled
to
become
a
mold
but
they
are
not
a
permanent
mold.
Counsel
for
respondent
terminated
his
argument
by
saying
that
Class
10
takes
into
consideration
the
duration
of
an
asset
and,
because
they
are
aluminum
forms,
they
have
a
much
longer
life
expectancy
than
the
wooden
forms,
and
they
fall
under
Class
10(h)
instead
of
Class
12(d).
According
to
the
evidence
adduced,
and
after
a
careful
scrutiny
of
the
different
classes
of
depreciation,
the
Board
believes
that,
in
trying
to
decide
into
which
class
an
asset
belongs
for
capital
cost
allowance
purposes,
the
priority
should
be
given
to
the
life
expectancy
of
an
asset.
In
the
case
at
bar,
it
is
obvious
that
the
life
expectancy
of
the
asset
is
from
three
to
four
years,
and
consequently
the
proper
rate
of
depreciation
would
be
that
of
Class
10(h)
at
30%.
Furthermore,
according
to
the
definition
of
the
words
“die”,
“jig”,
“pattern”,
“mold”
or
“last”,
utilized
by
counsel,
there
is
a
common
denominator
which
is
the
permanence
of
the
form
of
the
asset.
Herein,
the
asset
is
subject
to
depreciation
as
“metal
sheets
that
are
to
be
assembled
each
time
a
basement
has
to
be
built”.
In
other
words,
they
are
contractors’
movable
equipment
utilized
to
build
concrete
basements,
and
not
a
die,
jig,
pattern,
mold
or
last
because
they
have
to
be
assembled
each
time
they
are
utilized,
and
very
often
they
take
different
forms.
Above
all,
they
last
up
to
four
years.
For
these
reasons,
the
appeal
is
dismissed.
Appeal
dismissed.
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