The
issue
is
whether
in
computing
his
income
for
those
years
the
appellant
is
entitled
to
deduct
alleged
business
losses
of
$6,546.00,
$8,323.00,
$7,544.00,
$3,906.00
respectively
from
his
employment
income.
In
reassessing
the
appellant’s
liability
to
income
tax
for
the
years
just
mentioned
the
Minister
of
National
Revenue
(the
“Minister”)
disallowed
the
claimed
deductions.
Paragraph
6
of
the
Reply
to
the
Notice
of
Appeal
reads:
6.
In
so
reassessing
the
Appellant,
the
Minister
made
the
following
assumptions
of
fact:
(a)
the
Appellant
was,
at
all
material
times,
employed
full
time
by
the
Board
of
Education
for
the
City
of
Hamilton;
(b)
the
Appellant’s
employment
income
for
the
1991,
1992,
1993
and
1994
taxation
years
was
$56,025.00,
$66,135.00,
$66,373.00
and
$64,969.00,
respectively;
(c)
the
Appellant
has
an
interest
in
classic
wooden
boats,
and
in
1987
began
a
purported
business
activity
known
as
Classic
Yacht
Charters
and/or
Classic
Yacht
Restorations
by
making
two
boats
available
for
bare
boat
charters
on
Lake
Simcoe;
(d)
in
1987,
the
Appellant
only
had
one
charter
arising
from
the
purported
business
and
reported
gross
business
income
of
$700.00,
expenses
of
$11,529.00
and
a
loss
of
$10,829.00:
(e)
in
1988
the
Appellant
obtained
another
boat
on
a
management
basis,
and
reported
gross
business
income
of
$nil,
expenses
of
$7,223.00
and
a
loss
of
$7,223.00;
(f)
the
Appellant
then
decided
that
skippered
charters
and
boat
restoration
would
prove
more
successful
than
bare
boat
charters;
(g)
the
Appellant
sold
one
boat
and
moved
the
remaining
boat
(the
“Cruiser”)
to
Buckhorn
Lake;
(h)
in
1989
the
Appellant
reported
gross
business
income
of
$350.00,
expenses
of
$6,760.00
and
a
loss
of
$6,410.00;
(i)
in
1990
the
Appellant
purchased
a
22-foot
Sheppard
runabout
(the
“Sheppard”)
for
approximately
$4,000.00,
and
began
restoring
it
for
resale;
(j)
at
the
same
time
the
Appellant
began
trying
to
sell
the
Cruiser,
and
in
1990
the
Appellant
reported
gross
business
income
of
nil,
expenses
of
$8,154.00
and
a
loss
of
$8,154.00;
(k)
the
restoration
of
the
Sheppard
took
approximately
two
years,
and
the
Appellant
has
been
unable
to
sell
either
the
Sheppard
or
the
Cruiser;
(l)
in
1991
the
Appellant
moved
the
Cruiser
to
Port
Dover;
(m)
in
the
1991,
1992,
1993
and
1994
taxation
years,
the
appellant
reported
gross
sales
of
$nil,
$nil,
$380.00
and
$1,130.00,
respectively,
arising
out
of
the
purported
business;
(n)
in
the
1991,
1992,
1993
and
1994
taxation
years
the
Appellant
reported
expenses
of
$6,546.00,
$8,323.00,
$7,924.00
and
$5,036.00,
respectively,
resulting
in
losses
of
$6,546.00,
$8,323.00,
$7,544.00
and
$3,906.00,
respectively;
(o)
the
Appellant
has
not
made
a
profit
from
his
purported
business
activity
since
its
inception;
(p)
in
the
1991,
1992,
1993
and
1994
taxation
years,
the
claimed
expenses
were
not
made
or
incurred
for
the
purpose
of
gaining
or
producing
income
from
a
business
or
property;
(q)
in
the
1991,
1992,
1993
and
1994
taxation
years,
the
purported
business
did
not
have
a
reasonable
expectation
of
profit;
(r)
in
the
1991,
1992,
1993
and
1994
taxation
years,
the
claimed
expenses
were
personal
or
living
expenses.
The
onus
is
on
the
appellant
to
show
that
the
reassessments
are
in
error.
This
can
be
established
on
a
balance
of
probabilities.
Where
the
onus
lies
has
been
settled
by
numerous
authorities
binding
on
this
Court.
It
is
sufficient
to
refer
to
two
judgments
of
the
Supreme
Court
of
Canada
in
this
regard:
R.
v.
Anderson
Logging
Co.
(sub
nom.
Anderson
Logging
Co.
v.
The
King),
[1925]
S.C.R.
45,
[1925]
2
D.L.R.
143
and
Johnston
v.
Minister
of
National
Revenue,
[1948]
S.C.R.
486,
[1948]
C.T.C.
195,
[1948]
4
D.L.R.
321.
The
only
witness
at
trial
was
the
appellant.
There
is
nothing
in
his
testimony
that
reflects
adversely
in
any
substantial
way
on
the
assumptions
relied
on
by
the
Minister
in
reassessing
the
appellant’s
liability
to
tax.
Indeed
the
whole
of
the
evidence,
on
balance,
points
to
the
correctness
of
the
reassessments.
The
appellant
confirmed
that
he
had
a
“passion
for
boats”,
and
in
particular,
classic
wooden
boats.
The
evidence
suggests
that
it
was
this
that
led
him
into
the
very
unsuccessful
undertakings
that
culminated
in
these
appeals.
Personal
use
of
his
boats
was
said
to
be
10
per
cent.
The
purchase
of
at
least
two
of
the
three
boats
featured
in
these
appeals
were
100
per
cent
financed.
The
appellant
having
failed
to
discharge
the
onus
previously
referred
to,
these
appeals
cannot
succeed.
Accordingly
they
are
dismissed.
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