Grant,
DJ:—It
is
my
conclusion
that
the
decision
of
Chairman
Fianigan
of
the
Tax
Review
Board
herein
is
correct.
Besides
the
matters
referred
to
in
his
judgment,
the
following
evidence
lends
weight
to
his
decision.
Exhibit
6
is
a
memorandum
made
by
Harry
Sutherland,
solicitor
for
the
companies
involved,
on
January
10,
1966,
following
the
meeting
of
the
boards
of
such
companies
on
January
6,
1966.
It
was
made
to
record
the
decisions
arrived
at
by
such
boards
in
regard
to
the
transfer
from
Stuart
to
Grover.
At
paragraph
3
of
such
memorandum
is
found
the
following
explanation:
When
the
tax
loss
on
Grover
has
been
fully
utilized
the
business
carried
on
by
Stuart
Brothers
will
be
sold
by
Grover
to
Stuart
Brothers.
Mr
Sutherland,
in
his
examination-in-chief,
said
that
is
what
was
proposed
to
be
done
at
that
particular
time.
Later
in
his
evidence
he
said
that
the
boards
decided
that
the
trade
marks
could
be
re-transferred
“as
soon
as
the
present
arrangement
has
served
its
purpose.”
To
my
mind,
such
an
obligation
on
the
part
of
Grover
to
reconvey
the
assets
to
Stuart
when
the
Grover
loss
had
been
absorbed
in
reducing
the
Stuart
income
tax,
when
coupled
with
the
facts
set
out
in
the
judgment
appealed
from,
is
convincing
evidence
that
the
directors
of
both
companies
never
contemplated
the
transaction
as
a
transfer
of
the
Stuart
assets
nor
a
genuine
sale.
The
appeal
should
therefore
be
dismissed
with
costs.
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