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The husband agrees to pay 50% of the costs of any procedure or device medically required by the children and not covered by insurance (e.g. orthodontia), provided that the procedure or device is agreed to by both parties, and is not for purely cosmetic purposes. [4] The Appellant considered that paragraph 9 was a very important part of the agreement. ... It would serve no purpose to be unduly legalistic in interpreting either the appropriate sections of the Act nor cases which have considered it. ...

Paragraph 18(1)(a) sets out a general prohibition denying a deduction unless the amount is paid or incurred for the purpose of gaining or producing income while paragraph 18(1)(h) limits the deductibility of personal and living expenses which are defined in subsection 248(1) as follows: “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, [Emphasis added] (b)... [10] Even if one were to assume that the Orders made by the Ontario Court in the Appellant's matrimonial proceedings gave him the right to recover portions of certain support payments made to his former spouse and that this right constituted "property" for the purposes of the Act, the amounts, if and when recovered, cannot logically be considered to be income, i.e. profit from that "property". ... Traditionally, expenses that simply make the taxpayer available to the business are not considered business expenses since the taxpayer is expected to be available to the business as a quid pro quo for business income received. ...

Married persons do not meet this description, and, hence, cannot be considered discriminated against merely because they are treated differently by paragraph 118(1)(b). [14] [26] If the legislation does make a formal distinction based on analogous grounds, then one must determine whether the different treatment discriminates in a substantive sense, bringing into play the purpose of subsection 15(1) of the Charter in remedying such ills as prejudice, stereotyping and historical disadvantage. [27] Appellant's counsel states that the legislative distinction at issue violates the human dignity of the appellant. ... He stated, at pages 187-8: If mentally retarded adults are to be considered "children" solely on the basis of their dependency on a "parenting" figure, it is difficult to see how the category of "children" would be limited to the mentally retarded. ...

The orders that were made in September and December 1996 contained no retroactivity provision of the type contemplated by subsection 60.1(3), which read at that time as follows: For the purposes of this section and section 60, where a decree, order or judgment of a competent tribunal or a written agreement made at any time in a taxation year provides that an amount paid before that time and in the year or the preceding taxation year is to be considered to have been paid and received thereunder, the amount shall be deemed to have been paid thereunder. [12] Whether this was inadvertent or intentional is something on which I shall not speculate. ... Copeland, 16 C.B. 517, 24 L.J.C.P. 169, 139 E.R. 861 (1855) the expression "consent in writing by the author or proprietor" was considered. ...

The text of the operative part of that judgment reads as follows: [TRANSLATION] ORDERS the respondent to pay the applicant, for her children, monthly alimony of $2,750, with the applicant being required to pay the household expenses, including mortgage, heating, tax, electricity and other payments; this amount shall be deposited on the first of each month to the applicant's bank account, no. 208104, at the Caisse d'Économie des Cantons. [15]          The scope of subsection 56(12) of the Act has been considered by the courts on numerous occasions. ... In such a case, the taxpayer is considered for the purposes of subsection 56(12) as having discretion as to the use of those amounts. [18]          Considering the paragraph cited above, in paragraph 14 of these reasons, taken from the judgment of October 30, 1992, and having regard to the above observations, it may be seen that a relationship is established in that paragraph between the obligation imposed on the former spouse to pay the appellant monthly alimony of $2,750 for her children and the appellant's obligation to pay the expenses relating to the family home that are described in that paragraph. ...

I would add that she seems to have had the appellants’ full co-operation. [20] As regards the issue of whether the Minister, in making his determination, considered facts that were wrong or incorrectly assessed the other facts he had before him by failing to take all the relevant circumstances into account, I would note here that it is not sufficient in order to overturn the Minister's determination that the appellants merely disprove some of the facts taken into account by the Minister. ... In my view, the respondent’s version, which is that the appellants worked for longer periods than are indicated on their records of employment (while they were collecting unemployment insurance benefits), is not without merit. [34] If I were to believe the appellants’ version, namely that Renée Gasse, Jovette Gasse and her husband were capable of looking after the business alone during periods when income was higher, I would have to conclude that the appellants’ work was not justified during the periods at issue because the company was able to manage quite well without their services when the business was earning substantial income. [35] These are all relevant factors on which the Minister’s representative relied in concluding, after looking at all the circumstances, [13] that a substantially similar contract of employment would not have been entered into if the parties had been dealing with each other at arm’s length. [36] In light of the foregoing, it is my view that the appellants have not shown on a balance of probabilities that all the facts the Minister considered were wrong or that the Minister incorrectly assessed them in concluding as he did. ...

In the circumstances of this case I have concluded that the most appropriate exercise of my discretion is to vacate the assessments. [37] One of the important differences between these appeals and O'Neill is that Judge Bowman considered the O’Neill decision in context of a trial with full benefit of the available evidence and factual considerations, whereas in this case, a motion, there are only affidavits and cross-examination on affidavits, and from that and a review of the filed materials I conclude not all the relevant evidence was before the Court. [38] The jurisprudence of Att. ... After the litigation process continues in this matter including document discovery, examination for discovery and other pre-trial procedures, the situation may be somewhat clearer and as a matter of evidence or as a Charter issue of alleged solicitor-client privilege breach, if still considered appropriate by counsel, may be brought to the trial judge. ...

He referred to Interpretation Bulletin IT-114 which discussed the various criteria that the Courts have considered in concluding whether or not a particular transaction is an adventure or concern in the nature of trade. [49] It was counsel’s position that when one examines all the facts and the circumstances as disclosed by the evidence given in Court, the conclusion should be that this transaction was clearly not an adventure or concern in the nature of trade, that the taxpayers here merely realized an accretion of capital from an investment. [50] With respect to the question of the penalty the Minister must establish more than a mere failure to use reasonable care. ... In any event they only acted after being advised by Revenue Canada of the omission and that was already too late. [79] On that issue the Court is in agreement with counsel for the Respondent and the Court is satisfied that the reasonableness of the actions of the Appellants must be considered at the time that they filed their returns or at least at any time up to the time Revenue Canada made it clear to them that their returns were being reconsidered. [80] The Court disagrees with counsel for the Appellants that the state of the law is such that every time a bonus or discount is received on a mortgage that the amount is an accretion to capital and not income. [81] The case of Harold Wood, supra, does not stand for that proposition. ...

He stated that, for the purposes of the audit, all the amounts deposited at the bank had been considered as income whereas he had received non-taxable amounts, in particular damages in connection with an accident his wife had had in Virginia. ... The size of the unreported amounts relative to the taxable income reported was also considered. ...

The following criteria should be considered: the profit and loss experience in past years, the taxpayer’s training, the taxpayer’s intended course of action, the capability of the venture as capitalized to show a profit after charging capital cost allowance. ... In Land & Sea Enterprises Ltd. v The Queen, 2011 TCC 101, [2011] TCJ No. 70, at paragraph 14, I stated the following in respect to business activities conducted in the initial start up phase: [14] It is clear that an activity may be considered a commercial activity well in advance of the stage of profitability. ...