Taylor
J.T.C.C.:
-
The
Robert
M.
Wood
case
was
heard
on
August
26th
and
this
very
short
oral
judgment
is
being
delivered
on
August
27th.
I
reserve
the
matter
to
review
the
case
law
in
particular
and
I
am
prepared
to
deal
with
it
now.
As
usual
I
point
out
that
if
for
any
reason
these
brief
comments
don’t
seem
sufficient
that
I
would
take
the
opportunity
of
expanding
them
somewhat
if
more
formality
is
required.
Other
than
that
this
is
what
I
have
to
say.
This
is
an
appeal
under
the
informal
procedure
heard
in
London,
Ontario
on
August
26th,
1996
against
an
assessment
for
the
year
1992
in
which
the
Respondent
treated
the
profit
or
loss
of
an
operation
as
arising
from
“rental
of
property”
rather
than
“proceeds
from
business”.
It
was
this
point
“rental
property”
or
“business”
that
was
being
challenged
by
the
taxpayer.
I
leave
aside
the
question
of
whether
the
taxpayer
actually
established
his
right
to
appeal
that
particular
point,
but
I
do
point
out
that
counsel
for
the
Respondent
noted
it
in
argument
and
cited
certain
jurisprudence
which
left
a
question
about
it,
at
the
minimum.
The
details
of
the
operation
were
provided
to
the
Court
in
both
the
Notice
of
Appeal
and
in
the
Reply
to
the
Notice
of
Appeal,
and
the
Appellant
testified
regarding
his
personal
knowledge
of
the
range
of
services
provided
at
the
tourist
camp
establishment
-
Beauview
Cottages
-
and
also
he
referenced
the
regulations
and
requirements
for
“business”
arising
from
its
conduct
as
well
as
the
details
of
the
eventual
sale
of
the
“business”.
In
simple
terms,
from
his
perspective,
everyone
and
everything
involved
pointed
to
the
conclusion
that
the
profit
or
loss
was
from
“business”
not
“rentals”.
The
sole
exception
was
Revenue
Canada.
He
also
made
reference
to
the
information
material
available
from
Revenue
Canada
on
the
distinction
to
be
made.
That
of
course
is
the
crux
of
the
problem.
The
determination
of
whether
the
income
is
from
“business”
or
“rentals”
for
the
taxation
purposes
of
Revenue
Canada
is
quite
different
than
in
many
other
less
exacting
areas
of
interest.
In
this
situation,
I
am
quite
satisfied
that
the
extent
of
the
auxiliary
or
periphery
services
provided
to
guests
and
clients,
over
and
above
the
main
provision
of
accommodation
itself,
was
very
limited
and
indeed
might
also
be
regarded
as
rental
from
other
property
(such
as
skis,
tennis
courts
and
racquets,
et
cetera)
even
if
included
in
the
basic
price
charged
for
cottage
rental.
Counsel
for
the
Respondent
cited
Bowater
Mersey
Paper
Co.
v.
R.
(sub
nom.
Bowater
Mersey
Paper
Co.
Ltd.
v.
The
Queen),
(sub
nom.
R.
v.
Bowater
Mersey
Co.),
[1987]
2
C.T.C.
159,
87
D.T.C.
5382,
but
it
may
not
provide
a
full
review
of
the
circumstances
of
this
particular
matter.
I
have
also
examined
some
other
case
law,
and
without
going
into
detail
as
I
see
it,
the
only
reasonable
conclusion
is
that
the
operation
consisted
of
the
“rental
of
property”.
While
not
without
some
doubt
there
are
particular
passages
in
each
case,
which
I
shall
list
below,
when
applied
here
tend
inevitably
to
that
conclusion,
when
the
differences
regarding
“active
business”
as
one
item
or
“corporate
structure”
as
another
various
other
ones
are
eliminated
from
the
review.
The
appeal
is
dismissed.
The
list
of
cases
references
are:
Westman
v.
Minister
of
National
Revenue,
64
D.T.C.
5158;
Weintraub
v.
R.,
((sub
nom.
Weintraub
v.
The
Queen)
[1975]
C.T.C.
112,
75
D.T.C.
5050
(F.C.T.D.);
Buonincontri
v.
R.,
(sub
nom.
Buonincontri
v.
The
Queen)
[1985]
1
C.T.C.
370,
85
D.T.C.
5277
(F.C.T.D.);
Prosperous
Investments
Ltd.
v.
Minister
of
National
Revenue
(sub
nom.
Sinclair
Construction
&
Supplies
Ltd.
v.
Minister
of
National
Revenue),
(sub
nom.
Sinclair
v.
Minister
of
National
Revenue)
[1992]
1
C.T.C.
2218,
92
D.T.C.
1163
(T.C.C.);
Borstadt
Welding
Supplies
(1972)
Ltd.
v.
R.,
(sub
nom.
Borstad
Welding
Supplies
(1972)
Ltd.
v.
Canada)
[1994]
1
C.T.C.
395,
94
D.T.C.
6205
(F.C.T.D.).
Appeal
dismissed.
Email this Content