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In connection with these sales, the learned trial judge found: With few exceptions, the selling price of each unit comprised three elements: assumption of a pro rata amount of the first mortgage, cash and a balance secured by second mortgage in favour of the Plaintiff. ...

They read as follows: 31. (1) Where a taxpayer’s chief source of income for a taxation year is neither farming nor a combination of farming and some other source of income, for the purposes of sections 3 and 111 his loss, if any, for the year from all farming businesses carried on by him shall be deemed to be the aggregate of (a) the lesser of (i) the amount by which the aggregate of his losses for the year, determined without reference to this section and before making any deductions in respect of expenditures described in section 37, from all farming businesses carried on by him exceeds the aggregate of his incomes for the year, so determined from all such businesses, and (ii) $2,500 plus the lesser of (A) /2 of the amount by which the amount determined under subparagraph (i) exceeds $2,500, and (B) $2,500, and (b) the amount, if any, by which (i) the amount that would be determined under subparagraph (a)(i) if it were read as though the words “and before making any deductions in respect of expenditures described in section 37“ were deleted, exceeds (ii) the amount determined under subparagraph (a)(1); and for the purposes of this Act the amount, if any, by which the amount determined under subparagraph (a)(i) exceeds the amount determined under subparagraph (a)(ii) is the taxpayer’s “restricted farm loss” for the year. 248. (1) In this Act, “personal or living expenses” includes (a) the expenses of properties maintained by any person for the use or benefit of the taxpayer or any person connected with the taxpayer by blood relationship, marriage or adoption, and not maintained in connection with a business carried on for profit or with a reasonable expectation of profit, 4.02 Case at Law The only case and the most important to which it is necessary to refer is: William H Moldowan v MNR, [1977] CTC 310; 77 DTC 5213. 4.03 Analysis 4.03.1 The Supreme Court of Canada in the Moldowan case interpreted subsection 13(1) of the former Act which is the same as subsection 31(1) of the present Act as follows: In my opinion, the Income Tax Act as a whole envisages three classes of farmers: (1) a taxpayer, for whom farming may reasonably be expected to provide the bulk of income or the centre of work routine. ...

In this connection, it may be noted that, while the House of Lords in Riches v Westminster Bank overruled Re National Bank of Wales, [1899] 2 Ch 629, it did not overrule CIR v Ballantine or Simpson v Executives of Bonner Maurice, both of which appear to me to be stronger cases in this respect than the present for attributing an income nature to the sums in question, since in these cases the taxpayer’s right to the sum to which “interest” was added arose prior to or at the, commencement of the period in respect to which the “interest” was computed. ...

They read as follows: 31. (1) Where a taxpayer’s chief source of income for a taxation year is neither farming nor a combination of farming and some other source of income, for the purposes of sections 3 and 111 his loss, if any, for the year from all farming businesses carried on by him shall be deemed to be the aggregate of (a) the lesser of (i) the amount by which the aggregate of his losses for the year, determined without reference to this section and before making any deduction under section 37, from all farming businesses carried on by him exceeds the aggregate of his incomes for the year, so determined from all such businesses, and (ii) $2,500 plus the lesser of (A) '2 of the amount by which the amount determined under subparagraph (i) exceeds $2,500, and (B) $2,500, and (b) the amount if any, by which (i) the amount that would be determined under subparagraph (a)(i) if it were read as though the words “and before making any deduction under section 37” were deleted, exceeds (ii) the amount determined under subparagraph (a)(i); and for the purposes of this Act the amount, if any, by which the amount determined under subparagraph (a)(i) exceeds the amount determined under subparagraph (a)(ii) is the taxpayer’s “restricted farm loss” for the year. 248. (1) In this Act, “personal or living expenses” includes (a) the expenses of properties maintained by any person for the use or benefit of the taxpayer or any person connected with the taxpayer by blood relationship, marriage or adoption, and not maintained in connection with a business carried on for profit or with a reasonable expectation of profit... 4.02 Case law The case law to which the Court was referred is as follows: l. ...

In the case of Goring v MNR, [1976] CTC 2255; 76 DTC 1202, the following year, 1976 — my first year at this work — I wrote the following in connection with the dismissal of a farm loss, where the appellants were requesting the full farming loss: There was a considerable evidence of a laudable effort to rehabilitate the property and turn it into a base for the family estate and the same evidence also indicated strongly the motivation for this effort to be both a love of rural life and farming as an occupation, as well as a deep and understandable attachment to this particular home- stead property. ...

In Odeon Associated Theatres Ltd v Jones (Inspector of Taxes), [1971] 2 All ER 407, Pennycuick, V-C said with respect to the expression “ordinary principles of commercial accountancy”* [1] at 414: The concern of the court in this connection is to ascertain the true profit of the taxpayer. ...

In this connection, counsel alleged that at the negotiating stage a departmental employee had suggested to the appellant’s representative that the restricted expenses might be allowed. ...

It includes the expenses of properties maintained by any person for the use or benefit of the taxpayer or any person connected with the taxpayer by blood relationship, marriage or adoption and not maintained in connection with a business carried on for profit or with a reasonable expectation of profit. ...

Thus while Ensite’s statement of claim in respect of the 1976 reassessment asks for a determination of the refundable dividend tax credit on hand at the end of 1976 and the amount of dividend refund payable, the issue that will be determined on this appeal is whether the sum of $2,323,140 earned by Ensite in 1976 on its US dollar deposits in connection with the peso loans to its Philippine branch was foreign investment income within the meaning of section 129. ...

The corporate entity, Weisfeld Ltd, was utilized solely for the purpose of acting as a corporate vehicle for the transaction and to shield the taxpayer and its partners from any further liability in connection with the venture and more particularly, from the substantial liability to the Manufacturers Life Insurance Company, the mortgagee providing the financing. ...