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In his Judgment, Judge Bowie allowed the appeal for the 1992 taxation year but later in the Judgment only referred the assessment back to the Minister of National Revenue "for consideration and reassessment on the basis that the Appellant did not receive the amount of $2,925,000 referred to in the Reasons for Judgment herein as income in the 1992 taxation year", and not the total amount of $4,202,400 reassessed by the Minister. ...

Rather, the Act contains both objective elements — embodied in the reasonable person language — and subjective elements — inherent in individual considerations like "skill" and the idea of "comparable circumstances". ...

., an equipment manufacturer; d) In confirming the order, Bourgault Industries indicated a tentative shipping date of February 15, 1994 to Farm World; e) The manufacture of the Farm Machinery was not completed until January, 1994; f) The Farm Machinery was subsequently shipped to Farm World on February 15, 1994; g) Farm World completed a pre-delivery check for Bourgault Industries on the Farm Machinery on February 15, 1994; h) Farm World delivered the Farm Machinery to the Appellant on February 15, 1994; i) As part of the consideration for the sale, the Appellant traded in a Bourgault 2155H air seeder (the "Trade-in") which was received by Farm World on April 11, 1994; j) The remainder of the payment for the Farm Machinery was made by way of a cheque dated December 4, 1993 for $2,500 and a cheque dated February 24, 1994 for $7,900.00; k) In the 1993 taxation year, the Appellant did not acquire, obtain title to nor have all of the incidents of ownership such as possession, use and risk of the Farm Machinery; l) The Farm Machinery was not in existence, produced, nor in a deliverable state as at December 31st, 1993; m) In reporting income for the 1991 taxation year, the Appellant claimed an Investment Tax Credit in the amount of $1206.48 to which he was not entitled; n) In reporting income for the 1992 taxation year, the Appellant claimed an Investment Tax Credit in the amount of $1901.12 to which he was not entitled; o) In reporting income for the 1993 taxation year, the Appellant claimed an Investment Tax Credit in the amount of $193.80 to which he was not entitled; p) In reporting income for the 1993 taxation year, the Appellant claimed a deduction for Capital Cost Allowance in respect of the Farm Machinery in the amount of $1040.00 to which he was not entitled; and q) In reporting income for the 1993 taxation year the Appellant improperly included in his Capital Cost Allowance Schedule disposals in the amount of $22,615.00 in relation to the Trade-in which was not actually disposed of until 1994. ...

I strongly suspect he left the preparation of the corporate records up to his secretaries and never checked them for accuracy. [11]          I accept the certificate from National Trust (Tab 14, Exhibit R-1), dated June 17, 1991, as factual and that the certificate at Tab 13 of Exhibit R-1 was blank when signed by Joe and improperly filled out by someone at National Trust. [12]          It is unfortunate that Form 1 of the Corporations Information Act, at Tab 14 of Exhibit A-1 was signed by Spencer Black and filed with the Company's Branch on September 12, 1990, as it reflects the typed corporation documents but does not take into consideration that they were never signed by Antonietta nor her written resignation as a director and, therefore, they did not reflect the actual facts and it is inaccurate. [13]          Tab 18 of Exhibit A-1 is an example of Spencer Black's sloppiness, the heading, Resolutions of Director in singular, is undated and provides for the signature of both Appellants. ...

This leads to a further consideration- that of reasonableness. The reasonableness of expenditures is dealt with specifically in section 67 of the Income Tax Act, but it does not exist in a watertight compartment. ...

In this section, " RRSP deduction limit "- "RRSP deduction limit" of a taxpayer for a taxation year means the amount determined by the formula A + B + R- C                                                 where                                                 A              is the taxpayer's unused RRSP deduction room at the end of the preceding taxation year,                                                 B              is the amount, if any, by which                                                                                                                 (a)            the lesser of the RRSP dollar limit for the year and 18% of the taxpayer's earned income for the preceding taxation year exceeds the total of all amounts each of which is                                                 (b)            the taxpayer's pension adjustment for the preceding taxation year in respect of an employer, or                                                 (c)            a prescribed amount in respect of the taxpayer for the year,                                                                                 C            is the taxpayer's net past service pension adjustment for the year, and                                 R            is the taxpayer's total pension adjustment reversal for the year.... [6]            The appellant maintains that the Minister should take all of his income into consideration in computing his "earned income", including a capital gain which he claims to have realized in the course of these years. ...

The appellant's agent, who described himself as an accountant, argued that the consideration of $1 for the goodwill shown in the notarized agreement dated October 4, 1996, meant nothing. ...

This leads to a further consideration- that of reasonableness. The reasonableness of expenditures is dealt with specifically in section 67 of the Income Tax Act, but it does not exist in a watertight compartment. ...

Where the statutory discretion has been exercised in good faith and, where required, in accordance with the principles of natural justice, and where reliance has not been placed upon considerations irrelevant or extraneous to the statutory purpose, the courts should not interfere. [9]            In making his decisions, the Minister relied on the following allegations of fact in Clarence Godin's appeal: [TRANSLATION] (a)            the payer is a corporation that has been duly incorporated in the province of New Brunswick since May 26, 1989, or thereabouts, and whose shareholders are:                 Yvon Godin (the appellant's brother)                                                33%                 Clarence Godin (the appellant)                                                           33%                 Nicholas Godin (the appellant's father)                                             34% (b)            the payer operates a residential and commercial construction business; (c)            the payer operates all year round, depending on the work available; (d)            the appellant's work for the payer involved making estimates, handling orders, taking deliveries and doing carpentry work; (e)            Yvon Godin, the appellant's brother, did more or less the same work and also looked after the payer's books; (f)             the appellant's father said that he was not actively involved in the day-to-day operation of the payer; (g)                  for his carpentry work, the appellant was paid a weekly salary of $750.00 for 45 hours; (h)                  the appellant prepared estimates and sought out contracts for the payer without being paid; (i)                    during the periods at issue, in addition to the 45-hour weeks, the appellant was entered on the payer's payroll record at $133.28 for eight weeks in 1997 and five weeks in 1998; (j)                    eight hours of work are indicated for the weeks referred to in subparagraph (i), whether the appellant worked one, two or three days during the week; (k)                  during certain periods, work was performed without the payer having either the appellant or any other employee listed on its payroll record; (l)                    the payer's payroll record does not accurately show when the appellant worked for the payer; (m)                 the hours of work noted on the payroll record do not accurately reflect the number of hours actually worked by the appellant; (n)                  the appellant and the payer are related persons within the meaning of the Income Tax Act; (o)                  the appellant and the payer are not dealing with each other at arm's length; (p)                  having regard to all the circumstances of the employment, including the remuneration paid, the terms and conditions, the duration and the nature and importance of the work performed, it is not reasonable to conclude that the appellant and the payer would have entered into a substantially similar contract of employment if they had been dealing with each other at arm's length. [10]          The Minister relied on similar allegations of fact in Yvon Godin's appeal. [11]          At the hearing, the appellants admitted the facts alleged in subparagraphs (a) to (e) and (g) to (o) and denied those alleged in subparagraphs (f) and (p). [12]          The burden of proof is on the appellants. ...

In order to place the facts in context, it is necessary to outline the considerations relevant to resulting trusts. ...