A
J
Frost:—These
are
income
tax
appeals
from
assessments
in
respect
of
the
above-named
appellants’
1963
and
1964
taxation
years.
It
was
agreed
that
they
should
be
heard
together
on
common
evidence.
The
appellants
were
born
in
the
Middle
East
where
they
received
their
early
education.
They
came
to
Canada
with
their
families
in
1954
and
have
remained
here
ever
since.
Members
of.
their
families
had
long
been
associated
with
the
retail
automobile
business
in
various
Middle
East
countries,
United
States
and
Canada.'
Initially,
Alfred
and
Ezra
Lawee,
the
father
of
Mayer
Lawee,
invested
$200,000
in
land
and
buildings
in
:Ville
St
Laurent,
Quebec,
where
Barnabe
Motors
Limited
carried
on
their
operations
under
a
lease
rental
agreement.
Shortly
after
this
acquisition
of
land
and
buildings
the
Lawees
purchased
a
50%
interest
in
the
share
capital
of
Barnabe
Motors
Limited
and
from
that
time
carried
on
an
active
automobile
dealership
business
with
a
General
Motors
franchise.
Appellant
Alfred
Lawee
worked
from
1954
on
a
full-time
basis
with
Barnabe
Motors
Limited,
and
appellant
Mayer
Lawee
acquired
a
25%
interest
in
that
company
when
he
was
old
enough
to
enter
the
business.
,
The
evidence
adduced
before
the
Board
revealed
that
the
appellants
were
directly
and
indirectly
involved
in.
numerous
real
estate
transactions.
The
construction
placed
on
these
transactions
by
the
parties
differ
considerably.
Counsel
for
the
appellants.
contended
that
all
real
estate
transactions,
actual
or
intended,
bore
some
relationship
to
the
business
of
the
appellants,
while
counsel
for
the
respondent
contended
that
the
appellants
are
men
active
in
business
and
in
private
real
estate
companies
and
“not
completely
ignorant
of
the
real
estate
world”.
Leaving
the.
above
interpretations
and
details
of
appellants’
business
records
aside
and
confining
myself
to
the
specific
transactions
which
gave
rise
to
the
profit,
the
taxability
of
which
is
now
in
dispute,
I
want
to
emphasize
that
in
this
case,
as
in
so
many
others,
a
particular
holding
could
be
either
a
speculation
or
an
investment
irrespective
of
the
course
of
conduct.
The
purchase
by
the
appellants
of
property
known
as
part
of
Lot
302
in
the
locality
of
Dollard-des-Ormeaux
(hereinafter
referred
to
as
“farm
302”)
was
acquired,’
according:to
evidence
adduced
by
the
appellants,
for
the
purpose
of
a
used-car
lot
for
Barnabe
Motors
Limited.
In
my
opinion,
this
can
be
viewed
in
isolation.
The
question
is
whether
this
acquisition
was
in
the
nature
of
an
investment.
Farm
302
was
undeveloped
land
in
an
area
served
by
a
country
road
on
the
outskirts
of
Montreal
in
a
sparsely
populated
area.
The
appellants
purchased,
partly
for:
cash,
an
undivided
interest
in
this
property
on
May
31,
1962,
and
sold
it
13
days
later
on
June
13,
1962,
without
reservation.
This
short
span
of
time
however
does
not
accurately
reflect
the
tenure
when
one
takes
into
account
the
fact
that
negotiations
leading
to
acquisition
covered
a
period
of
15
months.
The
parcel
was
much
larger
than
was
required
for
normal
expansion
purposes
although
it
may
well
be
that,
if
the
alleged
plans
had
developed,
only
the
frontage
part
of
the
land
would
have
been
attractive
for
business
purposes.
The
appellants
pleaded
that
the
municipality
re-zoned
the
area
and
that,
as
a
direct
consequence,
they
were
unable
to
carry
out
their
original
intentions
and
as
a
result
were
obliged
to
sell.
However,
the
onus
of
showing
that
their
plans
changed
as
a
“direct
consequence”
of
the
re-zoning
was
not
discharged
by
the
appellants
as
no
satisfactory
evidence
was
adduced
to
show
that
within
the
period
of
tenure
the
outlook
had
so
drastically
altered.
It
seems
rather
strange
to
the
Board
that
a
car
dealer
would
want
to
commence
business
on
a
large
piece
of
vacant
farm
land
in
a
relatively.
uninhabited
area
to
sell
used
cars
with
no
immediate
prospect
of
income
return
on
his
equity
in
the
land.
This
factor
plus
quick
turnover,
vague
plans,
lack
of
control,
leverage,
vacant
land
and
over-acquisition,
all
tend
to
refute
the
investment
concept.
In
my
opinion
we
have
here
a
clear-cut
case
of
land
speculation.
Appeal
dismissed.
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