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However this judgment emphasized the connection between this and the successful carrying on of the road building operation of the company which had been taken over by the taxpayer together with an assignment of book debts of the company owed to the vendors, stating at page 475 [6273]: Yet, the plaintiffs must have viewed the odds as being bearable and to a very high degree within their control. ... The case to which I make reference is that of Wills v Federal Commissioner of Taxation, 77 ATC 4101, in which a debt totalling some $485,585 owed by a loss company was assigned to the taxpayer and other members of the Wills family in connection with the purchase of the total issued share capital of the company. ...

CLAIM The Deputy Attorney General of Canada, on behalf of Her Majesty, therefore claims that: iii) it is ordered pursuant to the provisions of subsection (2) of Section 178 of the Income Tax Act, RSC 1952, c 148, as amended by s 1, c 63, SC 1970-71-72, that there shall be paid to the Defendant, after taxation thereof, all of his reasonable and proper costs in connection therewith. ... If the defendant wishes to waive further taxation and the plaintiff consents, he may apply under Rules 324 and 344(7), and I will fix costs. 1 *SC 1970-71-72, c 63: “178. (2) Where, on an appeal by the Minister other than by way of cross-appeal, 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 de livering Judgment disposing of the appeal, shall order the Minister to pay all reasonable and proper costs of the taxpayer in connection therewith.” 2 t[1976] CTC 676; 76 DTC 6422. 3 J[1974] CTC 2277; 74 DTC 1219. 4 “Per Lord Greene, MR at p 612. 5 tin re Duke of Leeds, [1947] Ch 525 at 558; In re Lucas, [1947] 1 Ch 558 at 964; In re Blandy-Jenkins, [1948] 1 Ch 322 at 338. 6 +See Orkin, The Law of Costs (1968) at p 10. 7 SSC 1949 (2nd Sess), c 14. s 155. 8 Re Hancock, ex parte Spraggett, [1952] 4 DLR 220 at 224. 9 ‘Orkin, op cit at p 9. 10 tif it were necessary to isolate a reason for the discrepancy, I should incline to the view that the following facts were significant: detailed con sideration of the Expropriation Act was undertaken by the Standing Com mittee on Justice and Legal Affairs of the House of Commons while the Income Tax Act amendments were considered by a Committee of the Whole House. ...

It was defined in Vina-Rug (Canada) Ltd v MNR, [1968] CTC 1; 68 DTC 5021, as persons who “had at all material times a sufficient common connection”. ... Surely, these two persons, Adrienne and Eric Lawlor, have a community of interest and concern, a common connection, a sufficient collective unity to form a “group”. ...

In support of this submission, the defendant first refers to paragraph 12(1)(a) of the Income Tax Act which reads as follows: 12. (1) In computing income, no deduction shall be made in respect of (a) an outlay or expense except to the extent that it was made or incurred by the taxpayer for the purpose of gaining or producing income from property or a business of the taxpayer, The defendant then refers to paragraph 12(1)(h) of the Act and subparagraph 139(1)(ae)(i) which read as follows: 12. (1) In computing income, no deduction shall be made in respect of (h) personal or living expenses of the taxpayer except travelling expenses (including the entire amount expended for meals and lodging) incurred by the taxpayer while away from home in the course of carrying on his business, 139. (1) In this Act, (ae) “personal or living expenses” include (i) 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, By reference to these sections, the defendant submits that when paragraph 12(1)(a) speaks of profit, it must be read with paragraph 12(1)(h) and subparagraph 139(1)(ae)(i) and when so read is qualified so as to mean “property acquired with a reasonable expectation of profit”. ... It is never necessary to show a causal connection between an expenditure and a receipt. ...

Mr Tilsley testified that when he was doing the work in accordance with the appellant’s instructions he was at all material times on the Howe Company payroll; received most of his instructions from the president, Mr Howe; received reimbursement for travel and other expenses from the Howe Company; did not bill the appellant in his capacity as a geologist or prospector for services rendered and disbursements made in connection with the work; knew nothing of the payment of $750 to Mr Howe by the appellant until well after it had been made and received no funds other than the money involved in obtaining the prospector’s licences from Mr Howe or the appellant. ... This conclusion is, of course, reinforced by the extracts from the accounting records of the Howe Company entered in evidence which, while quite confusing, indicated that the moneys had been accounted for at some time by the company and, further, because in the various expense accounts which were received in evidence Mr Tilsley charged at least some of his expenses in connection with the Cape Breton claims through the Howe Company for the account of the appellant. ...

As will be set forth later herein the appellants attribute the reason for the incorporation of New-West and Save-On and the maintenance of the separate companies to problems and difficulties in connection with the activities and demands of the Amalgamated Meat Cutters Union. ... The appellants attribute the reason for the incorporation of New- West and Save-On to problems in respect of the activities and demands of the Amalgamated Meat Cutters Union, and Mr Wosk testified in that connection. ...

The developers themselves had apparently only put up $500 of their own money for the option plus whatever other expenses they had incurred in connection with their preliminary plans and negotiations with the lending companies. ... He was not unduly concerned when no building took place during the winter months but in May 1964 he saw a letter from the Public Works Department of the City of St Catharines which indicated that difficulties had arisen in connection with the installation of the sewers and utilities and he was given to understand by the borrowers that these might now cost about $130,000 instead of the $15,000 they had anticipated. ...

Dr Holland testified the structural control in both ore bodies was in a north-south direction and because Jersey lay to the west of East Jersey, there was, in his words, no structural connection between the two ore bodies. ... In this connection, I would refer to what Cartwright, J (as he then was) said in North Bay Mica Co Ltd v MNR, [1958] S.C.R. 597 at 601; [1958] CTC 208 at 212: “For the appellant it is contended that the word ‘mine’ as used in clause (b) of Section 74(1) means not ‘a portion of the earth containing mineral deposits’ but rather ‘a mining concern taken as a whole, comprising mineral deposits, workings, equipment and machinery, capable of producing ore’. ...

For these reasons this submission advanced by the defendant is wholly untenable. 41 By virtue of subsection 178(2) of the Income Tax Act where on an appeal by the Minister from a decision of the Tax Review Board the amount of the 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. ... In so doing I do not mean to be construed as deciding that a defendant is invariably to be entitled to all costs by virtue of subsection 178(2), and if that question should arise before any of my brother judges or a court of first instance, they are to be untrammelled by the manner in which I have exercised my discretion in this particular instance and by any remarks I may have made incidental thereto. 43 To recapitulate in summary form: (1) the appeal by her Majesty from the decision of the Tax Review Board with respect to the allowance of the claim by the defendant for a deduction in computing his taxable income for his 1972 taxation year with respect to his daughter Katrin to the full amount of the claim made is allowed; (2) the appeal by the defendant from the disallowance of the claim made by him as a deduction in computing his taxable income for his 1972 taxation year with respect to an amount of $480 paid by the defendant to Liidia Palts is dismissed; (3) the appeal by the defendant from the disallowance of the claim made by him as a deduction in computing his taxable income for his 1972 taxation year with respect to an amount of $250 paid by him to Evald Silvet is dismissed; (4) the assessment made by the Minister is restored; and (5) the Minister shall pay all reasonable and proper costs of the taxpayer in connection with the appeal by the Minister from the decision of the Tax Review Board and the cross appeal by the defendant from that decision. ...

The expenditures were personal or living expenses in that they were expenses of property not maintained in connection with a business carried on for profit or with a reasonable expectation of profit in accordance with paragraph 12(1)(h) and subparagraph 139(1)(ae)(i) of the Income Tax Act which read: 12. (1) In computing income, no deduction shall be made in respect of (h) personal or living expenses of the taxpayer... [exception not applicable] 139. (1) In this Act, (ae) “personal or living expenses” include (i) the expenses of properties maintained by any person for the use or benefit of the taxpayer... and not maintained in connection with a business carried on for profit or with a reasonable expectation of profit, 34 4. ...