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In addition, the Minister agreed that: — in December 1976, the Appellant and Danzo sold an undivided one half interest in the undeveloped Block 1 Project to Robert William Lineham and Terrence John Lineham (hereafter called the “Linehams”) (or the Builders). — in December 1977, the Appellant and Danzo reacquired one-half of the Linehams’ undivided one-half interest in the partially developed Block 1 Project and sold to them the partially assembled and undeveloped Block 2 property. — in September 1978, the Appellant and Danzo entered into an Option Agreement with the Linehams to reacquire Block 2. — the Appellant and Darzo sold a portion of their interest in the Block 1 Project in November and December 1978 to various purchasers. ... For the respondent: — It was never the Appellant’s intention to retail all his interest in the property in question; — the Appellant and Danzo were at all material times experienced developers with a history of involvement in real estate ventures and as such had knowledge of the real estate market; — the Appellant and Danzo’s financial position and their equity in the Block 1 and Block 2 properties were not such as to force them to sell a large portion of their interest in the said properties; — the Appellant and Danzo acquired the Block 1 and Block 2 properties with the intention of assembling, developing and selling a major portion of the project in the general course of a business transaction; — in the alternative, the acquisition and development of the properties was a speculation in which the possibility of turning a portion of their interest in the properties to account for profit at an early stage was a major motivating factor. ... These transactions were explained to the Bord as founded in the cost overruns on Block One — eventually the total cost was established in 1978 as some $3,340,570 ($940,570 over the RTL estimate of 1976), and the formal demand from the Royal Bank for payment of a $561,000 loan made to the appellants in connection with the project arising out of the pre-1976 property acquisitions. ...

Development of new reduction furnace — not yet successfully completed. ... Development of improved retort condenser — one new method was devised and adopted. ... Development of filter to eliminate flux — a satisfactory filter to remove flux from metal in sludge. ...

In computing his income for the 1976 taxation year, he sought to deduct the sum of $1,020.35 represented by the following items being financial literature with respect to the investment in securities: Bank Credit Analyst $ 275.00 Dow Theory Letters (4 years) 500.00 Consensus of Insiders 72.00 Trendway Advisory Service 18.00 The Chartist 85.00 Securities Research 88.00 $1,038.00 US Less US discount 17.65 $1,020.35 The Minister disallowed this deduction of $1,020.35 on the basis that the said amount constituted an outlay on account of capital relying, inter alia, upon paragraphs 18(1)(a) and (b) of the Income Tax Act, SC 1970-71-72, c 63, as amended. ... This issue has been dealt with many times in judicial decisions and I quote Jackett, P in Algoma Central Railway v MNR, [1967] CTC 130; 67 DTC 5091, at 134 and 5093 respectively: The “usual test’’ applied to determine whether such a payment is one made on account of capital is, “was it made “with a view of bringing into existence an ad- vantage for the enduring benefit of the appellant’s business” ”? See BC Electric Ry Co Ltd v MNR (1958), SCR 133 (58 DTC 1022, [1958] CTC 21), per Abbott, J at pages 137-8, where he applied the principle that was enunciated by Viscount Cave in British Insulated and Helsby Cables, Ltd v Atherton ([1926] AC 205), and that had been applied by Kerwin J, as he then was, in Montreal Light, Heat & Power Consolidated v MNR, [1942] S.C.R. 89 at 105 (2 DTC 535, [1942] CTC 1). ...

While the taxpayer has appealed both the 1977 and 1978 years, it would appear the relevant assessment applies only to 1978 — however, that again is not critical. ... And he used it in two ways — he used it for the deferral of the payment to the tax department, and he used it as a security payment to the trust company. ... However, it is my view that such an interpretation cannot be sustained and that the exact opposite must be the appropriate meaning — that the period of employment is deemed to have extended to and included the time at which payment is received, whether or not such employment itself had in fact continued and existed at the time of receipt. ...

SCHEDULE A Amount Amount Claimed Claimed Name Relationship 1975 1975 1976 Non-Resident Sham Kaur Sumbal Mother $646.00 $720.00 Surjet Kaur Mangat Mother-in-law $646.00 — Parminder Singh Mangat Brother-in-law $400.00 $720.00 Rajnant Kaur Mangat Sister-in-law $400.00 $720.00 Kaulesh Kaur Mangat Sister-in-law $640.00 — Hamir Singh Grandfather-in-law $646.00 $720.00 Rattan Kaur Grandmother-in-law $646.00 $720.00 Resident (Married equivalent) Gurdial Sumbal Sister $502.66 — ...

In Royal Bank v Hogg, [1930] 2 DLR 488, Riddell, JA, stated at 489: Then, coming down to the note on demand, while no formal demand was made, it has been law certainly for nearly a century, since Norton v Ellam (1837), 2 2M & W 461, 150 ER 839, and probably for centuries before, that a promissory note on demand is due as soon as it is delivered. It was strongly argued by the primary debtor that it was only for the purpose of determining whether an action could be brought without demand that the rule was established that a demand note was due at all times after its delivery, as the institution of an action was considered equivalent to a formal demand; but such cases as Norton v Ellam, 2 M & W 461; Re Brown, [1893] 2 Ch 300, at 304; Edwards v Walters, [1896] 2 Ch 157, at 162, Boulton v Langmuir (1897), 24 AR (Ont) 618, at 622, show that a demand note matures for all purposes as soon as it is delivered: consequently, this demand note had matured and was due before action begun, and the original note could be sued on. ... The latter case of Norton v Ellam, 2 2M & W 461, is to the same effect. ...

(b) Appellant is also a sole shareholder of S Filger & Associates Limited (hereinafter referred to as SF Ltd) and is the sole member of S Filger & Co (hereinafter referred to as SF Co). ... It is still found in January 1974 ($13,500 + $9,130- $22,630). It was reversed on February 1, 1975, and included in the income of 1975. ...

It is the appellant’s contention that he was a manufacturer’s agent and for purposes of this appeal, I do not believe anything turns on the actual title that the appellant had with G H Wood & Company Limited. ... It is the appellant’s evidence and it was not contested, that for the period of 1974,1975 and 1976, the period in which he was operating for G H Woods & Company Limited, he was successful in increasing the income of that company by 52% from 1974 to 1975 and by an additional 20% in the 1976 taxation year. ... For the 1975 taxation year, the commission income, which I understood is exclusively from G H Wood & Company Limited, was $23,570.90 and in 1976 it was $30,520.04. ...

At the hearing counsel for the appellant admitted in its entirety the reply to notice of appeal which reads as follows: That on 21 September, 1965, John J Dunn sold certain shares to Morgan, pany for $227 000 an, for $23,395.77, and certain others to the same com- That cheques in these amounts were deposited in a new bank account on 21 September, 1965; That on 21 September, 1965, John J Dunn issued a cheque in the amount of $250,075.00 to Excelsior Life for the purchase of a single premium in- That on 21 September, 1965, John J Dunn signed an agreement to borrow from Excelsior Life on the collateral of his single premium life insurance policy with the said insurance company; That on 23 September, 1965, Excelsior Life issued a cheque in the amount of $215,000.00 with respect to a loan that John J Dunn made on his life insurance policy and on that same date, the said John J Dunn deposited this cheque in his bank account; That on 23 September, 1965, John J Dunn borrowed $4,823.74 from Morgan, Ostiguy & Hudon Inc in order to have his bank account the exact amount to cover a cheque made to Sherbrooke Trust, said cheque being more fully described in the following paragraph herein; That on 23 September, 1965, John J Dunn issued a cheque in the amount of $220,155.00 to Sherbrooke Trust Company and this cheque was cashed only on October 7, 1965, by Sherbrooke Trust; That on September 24, 1965, Morgan, Ostiguy & Hudon Inc sold certain shares purchased from Mr Dunn to Jan Pick: That on October 7, 1965, Sherbrooke Trust Company issued a cheque in the amount of $220,697.00 to said Jan Pick for ‘and in the name of John J Dunn for the re-purchase of the shares that he had bought from John J Dunn through the intermediary of Morgan, Ostiguy & Hudon Inc: That the cumulative loans made from Excelsior Life and the interest paid with respect to the said loans are as follows: Loan Interest 1965 $215,000.00 1966 $232,140.00 $12,794.01 1967 $247,207.38 $13,928.40 $261,716.00 $14,822.80.: 1968 1969 $275,143.57 $15,427.25 The Minister disallowed the interest paid on the loans made to Excelsior Life Insurance Company in the taxation years as indicated in the above paragraph. ...

The appellant was engaged as a commission salesman during the said taxation year with the firm of Jenkin Evans & Company Limited and placed orders for the purchase and sale of securities on behalf of clients. ... The employer of the appellant, Jenkin Evans & Company Limited, was in the business of buying and selling securities, and the appellant, in so far as his own accounts were concerned, was in the same position as any other client. ... “Nil” assessment — Right of appeal. The appellant company, in its returns for its fiscal years 1967 and 1968, reduced its taxable income to nil by carrying forward unapplied portions of losses incurred in 1965 and 1966. ...