Roland
St-Onge
(orally
April
24,
1978)
[TRANSLATION]:—The
appeal
of
Mr
Yvon
L’Heureux
came
before
me
on
April
24,
1978
in
Montreal,
Quebec.
The
issue
is
whether
an
amount
of
$1,000
is
deductible
from
the
appellant’s
income
for
his
1974
taxation
year.
The
appellant
alleges
that
in
1971
he
made
a
loan
of
$2,000
at
8%
interest
to
his
son-in-law,
Mr
T
Jacobson,
and
that
he
never
recovered
his
loan
owing
to
Mr
Jacobson’s
insolvency.
The
respondent
disallowed
this
deduction
of
$1,000
as
a
capital
loss
because
the
appellant
(1)
never
required
his
son-in-law
to
pay
interest;
(2)
did
not
make
this
loan
in
the
normal
course
of
his
business;
(3)
was
not
able
to
prove
to
the
respondent
that
this
loan
had
never
been
reimbursed
between
1971
and
1974.
In
heading
4,
under
item
B,
Statutory
Provisions
and
Supporting
Reasons,
in
his
reply
to
the
Notice
of
Appeal,
the
respondent
maintained:
The
respondent
submits
that
the
loss
suffered
by
the
appellant
does
not
constitute
a
capital
loss
deductible
within
the
meaning
of
the
Act
since
this
loss
does
not
result
from
a
disposition
of
his
debt,
as
required
by
and
in
accordance
with
paragraph
38(b)
and
54(c)
of
the
new
Act.
In
fact,
there
is
no
evidence
that
the
appellant
attempted
to
collect
this
amount.
In
1974,
this
debt
was
not
statute-barred.
Counsel
for
the
respondent
referred
the
Board
to
paragraphs
38(b)
and
54(c)
of
the
new
Act.
Counsel
gave
a
definition
of
what
may
be
understood
by
‘‘disposition
of
property”.
On
the
basis
of
the
evidence
presented,
the
Board
has
come
to
the
conclusion
that
a
disposition
of
property
cannot
exist
in
this
case
because
the
following
year,
1975,
the
taxpayer
could
have
proceeded
against
the
debtor,
his
son-in-law,
obtained
a
judgment
and
effected
a
seizure.
For
these
reasons
there
is
no
evidence
that
during
the
1974
taxation
year
this
debt
was
paid
or
cancelled.
The
appeal
is
dismissed.
Appeal
dismissed.
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