Gibson,
J.:—On
the
application
of
the
appellants,
consented
to
by
the
respondent,
all
three
appeals
were
heard
together
and
the
evidence
adduced
applied
to
all
three
where
respectively
relevant.
The
appeals
concern
the
taxation
years
1958
to
1960
and
the
issue
involved
is
whether
the
profit
arising
from
the
sale
in
1959
of
a
parcel
of
real
estate
on
Eglinton
Avenue
in
the
Township
of
Scarboro
in
Metropolitan
Toronto
is
or
is
not
income
within
the
meaning
of
the
Income
Tax
Act.
At
the
time
of
this
sale,
the
appellant,
Hough,
owned
58
per
cent
of
this
property,
the
appellant,
Westmoreland,
22
per
cent
and
the
appellant,
Stockelbach,
20
per
cent.
According
to
the
evidence,
this
property
was
acquired
and
subsequently
sold
under
the
following
circumstances:
In
1955
the
appellant,
Stockelbach,
was
operating
a
car
business
on
the
property
Block
“A”
(see
Ex,
2)
on
Eglinton
Ave:
nue,
East,
Metropolitan
Toronto
leased
from
Hydro
Electric
Power
Commission.
On
it
was
a
small
building
built
for
him
by
the
appellant,
Hough,
on
which
he
owed
$830.
54.
Business
was
bad
for
Stockelbach
and
he
suggested
to.
Hough
that
the
latter,
in
payment
for
his
indebtedness,
take
over
the
30-
day
lease
of
Block
‘‘A’’
and
an
option
to
purchase
Block
“B”
(see
Ex.
A-2)
adjoining
from
Hydro
Electric
Power
Commission.
This
was
assented
to
‘by
Hough,
who
caused
Block
“B”
to
be
purchased
at
$3,200.
Title
was
taken
in
the
name
of
the
appellant
Westmoreland;
and
subsequently
a
trust
agreement
was
executed
evidencing
the
ownership
of
these
properties
in
the
proportions
above
mentioned.
The
property
was
leased
to
Mr.
C.
E.
Carter
Sr.,
for
use
by
Brimley
Motors
Limited
(operated
by
Carter’
5
sons)
for
a
net
yearly
rental
of
about
$5,000.
In
1958,
through
the
appellant
Stockelbach
s
offices,
Block
“C”
(see
Ex.
A-2)
adjoining,
was
purchased
from
the
Canadian
National
Railways
for
$4,000.
Brimley
Motors
Limited
got
into
business
difficulties,
and
abandoned
any
business
use
of
the
property
in
the
early
part
of
1958;
although
Carter
continued
to
pay
the
rent
for
which
he
was
liable,
but
he
asked
to
be
relieved
of
this
liability.
Then,
after
consideration
of
what
was
sensible
to
do,
an
effort
was
made
to
rent
the
property,
but
no
tenant
was
found,
and
in
late
1958
the
property
was
sold
to
Biff
Burger
Limited
for
$45,000,
payable
by
$8,000
in
cash
and
the
balance
by
way
of
mortgage
payable
over
several
years.
Biff
Burger
Limited
finally
paid
off
the
mortgage.
But
by
the
time
of
this
appeal,
it
had
abandoned
the
property
as.
uneconomic
for
their
business
purposes,
and
the
buildings
were
in
a
dilapidated
condition,
and
it
was
trying
to
dispose
of
this
property.
Block
‘‘C’’
was
acquired
after
word
was
received
that
Metropolitan
Toronto
was
proposing
to
expropriate
100
feet
in
depth
along
the
frontage
of
this
property
thereby
making’
the
balance
of
it
difficult
to
use
for
any
business
purpose
‘because.
of
zoning
regulations.
A
At
the
time
of
the
sale
of
the
property
to
Biff
Burger
Limited,
L
the
appellants
were
of
the
view
that
the
property’s
main
value
was
its
Eglinton
Avenue
frontage,
but
that
in
view
of
the
expropriation
probability,
the
prospects
of
renting
the
property
so
as
to
make
a
satisfactory
income
from
it
was
seriously
lessened.
In
this
their
view
was
confirmed
by
what
has
happened
to
the
property
since
then,
in
the
ownership
of
Biff
Burger
Limited.
The
evidence
also
discloses
that
the
appellant,
Hough,
originally
was
a
farmer
who
farmed
in
the
Township
of
Scarboro
in
the
County
of
York,
nearby
the
subject
property,
and
then
for
a
period
shortly
before
1952
was
in
the
wholesale
agricultural
implement
business.
Then
in
1952
through
at
least
two
companies
which
he
wholly
owned,
he
acquired
land,
built
various
industrial
and
commercial
buildings,
and
rented
the
same.
At
the
time
of
the
hearing
he
owned,
through
his
companies
or
personally,
some
80
buildings
and
had
about
200
tenants
in
them.
During
all
the
period
he
had
sold
a
few
of
the
properties
which
he
had
built
for
commercial
and
industrial
rental
purposes,
but
in
the
main
such
sales
were
restricted
to
sales
to
tenants
after
the
properties
had
been
built
upon.
A
consideration
of
the
whole
of
the
evidence
leads
firstly
to
these
general
conclusions:
1.
That
the
appellant
Hough,
personally
and
through
his
companies,
was
in
the
business
of
acquiring
lands
and
building
industrial
and
commercial
buildings
on
such
lands
and
renting
such
properties.
2.
That
the
appellant
Westmoreland
was
a
secretary
for
the
appellant
Hough
and
for
his
companies.
That
was
her
occupation
during
all
the
material
times.
8.
That
the
appellant
Stockelbach
was
in
the
business
of
a
car
salesman
and
latterly
a
salesman
in
an
automotive
parts
company
during
all
the
material
times.
Such
a
consideration
of
the
evidence,
secondly,
leads
also
to
these
specific
conclusions
in
relation
to
the
acquisition
and
subsequent
sale
of
this
property
on
Eglinton
Avenue,
Metropolitan
Toronto,
Viz.:
1.
That
none
of
the
appellants,
individually
or
jointly,
were
in
the
business
of
buying
and
selling
land
or
improved
land
generally.
2.
That
the
acquisition
and
subsequent
sale
of
the
subject
land
in
this
action
was
not
a
‘‘business’’
in
itself
within
the
meaning
of
the
Income
Tax
Act
as
judicially
interpreted.
3.
That
this
transaction
was
not
‘‘an
adventure
or
concern
in
the
nature
of
trade”
so
that
the
profit
arising
there-
from
would
be
income
within
the
meaning
of
Sections
3,
4
and
139(1)
(e)
of
the
Income
Tax
Act
also
as
judicially
interpreted.
Instead
and
in
the
result,
therefore,
in
my
opinoin,
each
of
the
appellants
was
in
the
position
of
an
owner
of
an
"ordinary”
investment
choosing
to
realize
it
;
and
as
a
consequence
the
profit
arising
from
the
sale
in
1959
of
it
was
not
income
within
the
meaning
of
the
Income
Tax
Act.
The
appeals
are
allowed
with
costs.
Email this Content