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The following provisions of the Estate Tax Act* [1] should be considered in connection with this appeal: 7. (1) For the purpose of computing the aggregate taxable value of the property passing on the death of a person, there may be deducted from the aggregate net value of that property computed in accordance with Division B such of the following amounts as are applicable: (a) the value of any property passing on the death of the deceased to which his spouse is the successor that can, within six months after the death of the deceased or such longer period as may be reasonable in the circumstances, be established to be vested indefeasibly in his spouse for the benefit of such spouse, except any such property comprising a gift made by the creation of a settlement or the transfer of property to a trustee in trust; (2) For the purposes of paragraph (1)(a), any superannuation, pension or death benefit payable or granted (a) out of or under any fund or plan established for the payment of superannuation, pension or death benefits to receipients, or (b) out of the revenue of Her Majesty in right of Canada or a province or under or subject to any Act of the Parliament of Canada or of the legislature of a province, to the spouse of a deceased on or after the death of the deceased in respect of such death, subject to a provision that such benefit ceases to be payable to such spouse if he remarries, shall not, by reason only of such provision, be considered not to be vested indefeasibly i in him. 62. (1) In this Act “settlement” includes (a) any trust, whether expressed in writing or otherwise, in favour of any person, and, if contained in a deed or other instrument effecting the settlement, whether or not such deed or other instrument was made for valuable consideration as between the settlor and any other person, and (b) any deed or other instrument under or by virtue of which a usufruct or substitution is created or any real property or estate or interest therein stands limited to any persons by way of succession: As I see the matter, there are two hurdles that the appellant must surmount to succeed in this appeal, viz: (a) it must be established that the “property” the value of which it is wished to deduct under paragraph 7(1)(a) was not “property comprising a gift made by creation of a settlement” (which by definition includes an “instrument under or by virtue of which... a substitution is created”) so as to be excluded from paragraph 7(1)(a) by the concluding words thereof, and (b) it must be established that the “property” the value of which it is wished to deduct under paragraph 7(1)(a) was “vested inde- feasibly” in the widow “for the benefit of” the widow, or, as it is put in the French version, that the property was “dévolus irrévocablement à son conjoint au profit de ce dernier”. ...

Subsection 178(2) of the Income Tax Act [as amended by 1970-71-72, C 63] reads: 178. (2) Where, on an appeal by the Minister other than by way of crossappeal, from a decision of the Tax Review Board, the amount of tax that is in controversy does not exceed $2,500, the Federal Court, in delivering judgment disposing of the appeal, shall order the Minister to pay all reasonable and proper costs of the taxpayer in connection therewith. ...

At page 16 [pp 525-6] of his reasons the learned trial judge makes these important findings: On the contrary, it is abundantly clear that he was- at all times under the direction of Dr Keevil Senior and his business associates who had employed him for many years and this arrangement was by no means terminated or altered in connection with this specific project. ...

The will of the deceased dated November 8, 1963 provides: (a) that the deceased’s wife and the National Trust Company Limited would be the executors and trustees of the Will—(Clause 2, page 1, of the Will); (b) that all just debts, funeral and testamentary expenses and all estate, inheritance and succession duties or taxes payable in connection with any property passing on his death should be paid out of, and charged to, the capital of his general estate—(Clause 4(d), page 5, of the Will); (c) that the residue of his estate be kept invested and the net income derived therefrom be paid to his wife until her death—(Clause 4(e), page 5, of the Will); (d) that notwithstanding anything in his Will, the deceased expressly authorized the Trustees at any time and from time to time during the lifetime of his wife, or so long as any of his children shall be living and under the age of twenty-one years, to pay to, or apply for, the maintenance or benefit of his children such amount or amounts out of the capital of the residue of his estate as his trustees in their uncontrolled discretion deem advisable—(Clause 7, page 7, of the Will). ...

He said that his valuation contained input of the various members of the team, weighed in the light of his experience in the market place, which is considerable, in connection with what is known in the trade as “investment letter stock”. ...

Some were incorporated to be the mortgagors to Great West Life, others that have been mentioned have no connection whatsoever with the transaction, and for the purposes of my judgment I completely disregard the limited companies, because there is an agreement of trust indicating that the true ownership of the subject property (being Lot 89, Plan 7607, for the Township of North York in the County of York) rests two-thirds with Reicher and Bradstock and one-third with an architect by the name of D Ross King who was closely associated with them in this venture. ...

I quote the section because it is short: 11. (1) Notwithstanding paragraphs (a), (b) and (h) of subsection (1) of section 12, the following amounts may be deducted in computing the income of a taxpayer for a taxation year: (ia) an amount paid by the taxpayer in the year as or on account of expenses incurred by him in attending, in connection with a business or profession carried on by him, not more than two conventions held during the year by a business or professional organization; There is no doubt that the conventions in question were held by business or professional organizations, nor is there any doubt—in fact, it is admitted—that the degree of success and study that Mr MacDonald has put into his vocation would qualify him as a professional within the meaning in my decision in Axler & Palmer Ltd v MNR, [1973] CTC 2167; 73 DTC 119. ...

I surmise that the part that was allowed was interest on his borrowings in connection with properties in which he himself owned a part interest or the properties that he had in his own name, or some other business or property that the Minister felt was one to which subparagraph 11 (1)(c)(i) of the former Act could properly apply. ...

One of the Gauvreaus had some business connections in Michigan, referred to in the evidence as the “Bay City group”, and arrangements were made with that group to obtain a loan of $25,000. ...

The Company shall employ such persons as may be necessary to Carry out its duties under this Agreement, provided that the Hotel shall provide all facilities and materials used or required in connection therewith and in particular water, cleaning and polishing supplies, and power, electrical or otherwise. 3. ...