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Mr Darius testified that early in 1960 the company had 10 unsold houses on its hands, and he noticed that the company was not making sales; as of March in that year it had assets of $225,000 to $230,000, mostly of land and houses, with liabilities of about $182,000; and by June he decided to get out of the building business; at that time his wife was still owed about $30,000 on her loan, in respect of which the company had given her a promissory note for $29,000 (Exhibit 3), and when he told her of his intention to get out of the business she asked what about her loan; he told her the company would, in partial payment of the loan, pay her $15,000 in cash, which was all the money it could then make available, and would also transfer to her the company’s equity in the undivided half interest in the 42 acres of land; his objective was to protect her, for the company’s prospects did not look good, and if it could not meet its commitments to pay the unpaid balance of the purchase price of the land as payments thereon became due it could lose the land, whereas Mrs Darius had financial means to meet such payments, and he thought it would be safer for her to have title to the land rather than to have only the company’s promissory note; the company could not raise money to repay the loan by mortgaging the land, for it had only an undivided half interest in it; he did not consider having the company make an assignment of its equity in the land as security for repayment of the loan, rather than the absolute transfer that was eventually made; he talked to the company’s solicitor and accountant in respect of the plan, and there was no mention of income tax considerations; the solicitor drew up the necessary documents; his wife was aware of the difficulty of selling the land, as there was no market for it at the time, but he hoped it could be sold, and she agreed to what he had suggested and didn’t question his judgment, and she told him to sell the land for her; he thereupon proceeded to ask several real estate agents to try to obtain offers to purchase it, the intention being to sell it as quickly as possible, but the realtors found no purchasers and received no offers until 1962; each offer, when it was received, was communicated to his wife, and each was accepted without seeking a higher price; he left it to the realtors to obtain offers; he didn’t, advise his wife what to do with the land or whether to accept any of the offers that came; his wife knew very little about the company’s business dealings, but she helped some with its books and office work; she was a shareholder because the law required that a company. have at least two shareholders; when the land was purchased in 1956 it was farm property outside the city limits; it continued thereafter unimproved, but by 1960 the city had extended its limits and moved about a mile closer to the property and later it became more saleable, particularly after the city’s replotting; prior to its transfer to Mrs Darius the land was inventory in the company’s business; the company was wound up in 1969. ... Counsel for Mrs Darius submitted that her intention in accepting a transfer of the company’s undivided one-half interest in the 42 acres of land was to better her position in respect of her loan to the company, and that the evidence is consistent only with that intention: a consideration in that acceptance was that in 1960 the company’s prospects were not good and if title to the land remained in the company and it were unable to meet its commitments to pay the remainder of the purchase price of the land it might lose the land, and Mrs Darius would be left with only a promissory note of the company which it might not be able to pay; it was she who, having accepted the transfer of the land, made the decision to sell it and to seek offers of purchase, in order to recoup what was owing on her loan and to pay what remained owing on the land; the situation in 1960 was that no one was interested in buying the block of land, there was the possibility that it could only be sold at a loss, and profit was not the motivation for selling it; in later years each offer of purchase was accepted without effort to obtain a higher price; nothing was done on the land to improve it; the exchange for other lots came about by reason of the City’s plotting, which was beyond the plaintiff’s control; as to her interest in the company, she was a shareholder with her husband only because the law required two shareholders, and she gave the loan to assist him financially in the business of building houses for resale, but she took little part in it and knew little about the company’s dealings in selling houses and land; at no time was she personally in the business of trading in land, and any profits realized by her in respect of this land were not income from a business, but were capital gains. ...

The estates under consideration there were unadministered estates. The Privy Council in the Livingston case considered the rights of persons having an interest in an administered estate and an unadministered estate. ... Kellock, J said at pages 468-9 [110-12]: There is a further consideration which confirms the view to which I have come, as above expressed. ...

Recapture of depreciation was not a consideration. While buildings were quite costly, raw land in West Berlin was cheap. ... This modest increase was dictated by considerations of the economic position of the class of tenants, a desire to minimize tenant turnover and avoid the attendant expenses, the perceived competitive position and a preference for a very low vacancy rate over higher rents as the way to maximize gross rental income. in the actual result, during the 11 months the plaintiff owned Fleming- don Park, net rental income exceeded the pre-purchase projection by $44,582. ...

According to the appellants, this also should have been taken into consideration, either by way of a reserve for doubtful accounts or as a write-off. ... I can find, therefore, that ample consideration existed in the minds of the appellants at the time of the signing of Exhibit R-2 that this was a means of disposing of their interest in a continuing partnership without having to put up any of their own funds. ...

After consideration of the evidence, I have no difficulty in concluding that subject acquisitions of land were speculations and that the partners were in the business of buying and selling land. ... For a proper consideration of said Articles, it is also necessary to have reference to the following definitions referred to in the Protocol to the Convention: 3. ...

Statements of farming income and expenses (Exhibit 2) contained in the appellant’s income tax returns show the following items of gross income from the Aldonna Ranch: Year 1964 Hay 1400.00 1400.00 1965 Cattle 619.28 Breeding Fees 50.00 669.28 669.28 1966 Horses, Sheep, other 150.00 Breeding Fees 145.50 Custom Work 125.00 Show Prizes 34.00 454.50 454.50 1967 Breeding Fees 372.00 372.00 1968 Horses, Sheep, other 250.00 Breeding Fees 100.00 Patronage Payments 224.70 574.70 574.70 1969 Hay 67.50 Horses, Sheep, other 850.00 Patronage Payments 86.34 1003.84 1003.84 1970 Cattle 350.00 Horses, Sheep, other 100.00 Breeding Fees 50.00 Eggs 254.00,,. h Rent Farm Cabin 420.00 1174.00 1174.00 1971 Cattle 3514.64 Horses, Sheep, other Donkey 100.00 Breeding Fees 200.00 Eggs 195.00 Rent Farm Cabin 480.00 4449.64 4449.64 Even taking into consideration that during the early years of developing sales of horses would not be substantial, considerably more than what is shown would be expected during the 7-year period (1965. to 1971 both inclusive) if the farming activity were commercial in nature or if it were meant to be commercial in nature. ... Furthermore, taking into consideration all the relevant facts I conclude that from the very outset in 1963 there could have been no reasonable expectation of profits. ...

The consideration is the payment of certain periodic installments called premiums (b). ... However, the proportion of the sums payable by an insurer, corresponding to the premiums paid by the beneficiary thereof personally and actually borne by him, as compared to the total amount of premiums, and the portion of the said sums which the beneficiary or assignee thereof has otherwise acquired for full valuable consideration shall not be subject to the duties imposed by this act nor included in the aggregate value. ...

VanSnick said that he discussed this proposal with the other directors of the plaintiff corporation and that after some consideration, they decided not to accept Mr Hayes’ offer as above described. ... Mr VanSnick acknowledged that the plaintiff gave no separate consideration for the advantages accruing to it under the agreement with Hayes Insurance Limited (Exhibit P1-11). ...

After careful consideration, I have reached the conclusion that the International Fruit decision (supra) is on all fours with the instant case in its relevant facts and that I! ... The section of the Income Tax Act under consideration there was subsection 20(4). which provided: 20. (4) Where depreciable property did, at any time after the commencement of 1949, belong to a person (hereinafter referred to as the original owner) and has, by one or more transactions between persons not dealing at arm’s length, become vested in a taxpayer, the following rules are...., applicable... ...

NOTE (my comment) — It can reasonably be observed that the language set out above taken from the first 4 paragraphs of Information Bulletin No 41 indicates quite clearly that a teacher is exempt from Canadian income tax for one period of up to two years on his remuneration from teaching, if he has come to Canada temporarily for the purpose of teaching and /f his stay in this country is not expected to exceed 24 consecutive months, ie a teacher appears to be entitled under the Information Bulletin to the aforesaid exemption even though he remains in Canada longer than 24 consecutive months if he can show that his stay in this country was not expected to exceed 24 consecutive months, the teacher’s original intention thereby becoming a relevant governing consideration. ... In outlining the Minister’s position in this appeal, Mr Thomas stated, in effect: that the sole question to be decided herein is whether or not the appellent is able to bring himself within the four corners of said Article X of the Schedule to the Canada-New Zealand Income Tax Agreement; that, even though the appellant is successful in establishing that he came to Canada in 1968 with the firm intention of staying only two years and no longer, that has no bearing on his tax liability in his 1968 and 1969 taxation years because the matter of his intention is not a relevant consideration in the interpretation and application of said Article X, and that the appellant cannot avail himself of the rules contained in Information Bulletin No 41, even though they were issued by no less a personage than the Deputy Minister of the Department of National Revenue, because the said Deputy Minister does not have the power to legislate nor to interpret legislation for other than his own purposes. ...