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He referred the Board to subsection 27(2) which states as follows: 27. (2) This section does not apply in determining the value of any security on which no closing price or quotation is obtainable as provided in subsection (1), or determining the value of (a) any share in, or in the capital stock of, or (b) any other security in the nature of an interest in or right to any of the proceeds, profits, capital assets or other assets of, any corporation, association, partnership or syndicate that, immediately prior to the death of the deceased, was controlled, whether through holding a majority of the shares thereof or other voting interest therein or in any other manner whatsoever, by the deceased, by the deceased and one or more persons connected with him by blood relationship, marriage or adoption or by any other person on his or their behalf. 11 In that connection he also referred the Board to Tabco Timber Ltd v The Queen, [1971] S.C.R. 361, in which case Martland, J states: The rule should allow the Court to admit evidence of such sales as it finds, in place, time and circumstances, to be logically probative of the fact to be found. 12 Written submissions were also made as to the value of the shares being based upon book value per share basis rather than on a cash flow per share or earning per share basis. 13 The evidence has revealed that at the time of Mr Raymond's death, CDC possessed 60,000,000 square feet of land and consequently, being in the business of selling land, this tract of land was a very valuable stock-in- trade. 14 Counsel for appellant contended that to appraise the shares' value, one should look at the cash flow value which has been established at $1.53 per common share by Mr Caty. 15 In answer to this contention, counsel for the respondent submitted that the appellant's cash flow analysis reveals many errors enumerated as follows: 1. ...

An abstract from the Registry Office records was introduced as Exhibit A-9 to indicate the transfers in connection with this vacant land from November 1965 to September 1970. ...

However, it is from the generalities asserted in connection with the appellant’s medical practice that one could propose there was a second property acquired by the appellant, corollary to the note payable—the “right”, “advantage” or “benefit” of entering into the working arrangement with the Small Company and Dr Small. ...

Paragraph 12(1)(a) and subparagraph 139(1)(ae)(i) state: 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... 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... 4.2 The Board took notice of the following judgments, several of which were cited by counsel: — Her Majesty the Queen v Douglas C Matthews, [1974] CTC 230; 74 DTC 6193; — Ken Huband v MNR, [1974] CTC 2001; 74 DTC 1039; — MNR v Henry J Freud, [1968] CTC 438; 68 DTC 5279; — Donald Preston McLaws v Her Majesty the Queen, [1976] CTC 15; 76 DTC 6005; — Marcel Crépeau v MNR, 37 Tax ABC 280; 65 DTC 99: — Williamson v MNR, 1 Tax ABC 369; 50 DTC 147; — Alan R Needham v MNR, [1974] CTC 2078; 74 DTC 1057; — Riedle Brewery Ltd v MNR, 1939 SCR; [1938-39] CTC 312; 1 DTC 499-29; — F George Walker v MNR, 76 DTC 1224; — John S Stewart v MNR, [1964] CTC 45; 64 DTC 5023; — Onni Paju & Oiva V Paju v MNR, [1974] CTC 2121; 74 DTC 1087; — Ernest C Hammond v MNR, [1971] CTC 663; 71 DTC 5389; — R C Huffman Construction Company of Canada Ltd v MNR, 39 Tax ABC 172; 65 DTC 597; — William E Newton v MNR, [1969] Tax ABC 1174; 69 DTC 778; — D Carom v MNR, [1977] CTC 2085; 77 DTC 67. 4.3 Considering the appellant’s numerous activities, as shown by the evidence (paragraph 3.1), some would describe him as a “wheeler dealer’, while others would regard him as an “entrepreneur’’ or “captain of industry.’’ ...

On another occasion H’Oseason informed me that through his wife’s connections in mainland China (his wife is Chinese) he was sure he would be able to arrange for me to be appointed Chinese Consul in Vancouver. ...

(SN p 22.) 3.18 The appellant did not call any expert witnesses in connection with the value of the property at April 27, 1971. ... The nullity of the document as a counter-letter does not divest it of its evidentiary value in some other connection, if there is one. ...

As I interpret Lawee in this connection, it does no more than state that land may be the subject matter of an investment, that all purchases of land bought in the hope of making a profit are not necessarily adventures in the nature of trade and whether such a purchase would be an adventure in the nature of trade would depend upon the circumstances of each case. ... In that connection, I would make reference to the comments of Mr Justice Pigeon in MNR v James N Sissons, [1969] CTC 184; 69 DTC 5152, (see Kostiner et al v MNR, [1978] CTC 3063 at page 3071; 78 DTC 1746 at page 1752),... to escape taxation on his gain from the operation he has to show that it is to be characterized as an investment. ...

There would have been many other ways to avoid such a problem and the real reason might well have been Rafael’s inability to obtain credit clearance due to outstanding third party obligations. (10) Rafael had shown in connection with separate court actions (Exhibits A-15, A-18 and A-21), and in the memorandum of agreement (Exhibit R-4) that he had a beneficial interest in the property. (11) The evidence would indicate that Rafael was the intended purchaser of the property originally and that when it was determined he could not obtain credit clearance, he decided to place the property in the name of Rua and that it could not be alleged this gave to the appellant the beneficial interest she now claimed. (12) The evidence is that now the present home of the Rafaels (a Karen Park, Toronto address) is in the name of the appellant, and the business address of Rafael at 991 Dundas St is also in her name. ... It deals with transactions which occurred (or did not occur) years ago; there is little documentary evidence of substance (although there is a great deal of quantity); the appellant’s husband Jose Rafael has been the subject of interest, and continues to be, from various aspects of government/business involvement, including that of income tax; three of the main parties (the appellant, Rafael and Rua) were the subjects or originators of conflicting and competing court actions flowing from the property; the appellant and Rafael commenced, and apparently ceased, during the same time frame as the above-noted court actions, separate efforts at divorce or separation; one court action included attempts by the appellant to obtain alleged unpaid wages from Rafael; the various business activities of Rafael seem to have been either sold or wound up, until now according to the evidence, neither he nor the appellant have any funds or sources of income; the present residence of the appellant and Rafael and their 5-year old son is in Karen Park and it is encum- bered by three mortgages in addition to some income tax lien in connection with the tax liability at issue here (it is probably totally encumbered up to or well in excess of its current value); and of course the subject property itself in this appeal was never at any time held in the name or names of either the appellant or Rafael. ...

In Floor & Wall Covering Distributors Ltd et al v MNR, [1966] CTC 566; 66 DTC 5373, and Vina-Rug (Canada) Limited v MNR, [1968] CTC 1; 68 DTC 5021, Mr Justice Gibson, then of the Exchequer Court, stated at 4 and 5374 respectively: In my opinion also, without detailing the indicia which is clear from the evidence, each of these groups of persons are a “group of persons” within the meaning of s 39(4) para (d) of the Act, in that they had at all material times a sufficient common connection as to be in a position to exercise control of Stradwick’s Limited. ...

Dr Tom Ling, a medical doctor with a deep interest and connection with the horse racing industry in the area, also testified on behalf of the appellants. ...