Thurlow, J:—The issue in this appeal is whether, on facts which are not in dispute, the dispositions made by the appellant of certain shares in three companies were made by him while or after carrying on a campaign to sell shares of these companies to the public within the meaning of subsection 83(4) of the Income Tax Act. If so, the effect of the subsection is to deny the appellant the exemption from tax provided by subsection 83(3) on the profits realized on the sale of the shares.
It is common ground that the shares were sold at a time when a campaign to sell shares of the three companies to the public was in progress and that in all three cases the campaign was being carried on by J Appleby Securities Limited, a company engaged in business as a broker dealer, distributor and underwriter of which the appellant himself was, at all material times, the sole beneficial shareholder, a director, the president and the person who dominated and directed its business.
There seems to be no room to doubt that if the appellant had carried out on his own account and in his own name the campaign for the sale of shares in the three companies to the public, or if J Appleby Securities Limited had been the person who advanced the money for prospecting and the recipient of the shares referred to in subsection 83(3), subsection 83(4) would apply to defeat the claim of either for exemption of the profits from the sale of the shares from tax. The question to be resolved is accordingly whether in the circumstances of this case either (1) the fact that the campaign was carried on by J Appleby Securities Limited or (2) the fact that the campaign was not carried out as a business operation of the appellant himself serves to render subsection 83(4) inapplicable.
It is, we think, to be observed that, while the application of subsection 83(4) requires that the campaign be carried on by the person who would otherwise be entitled to exemption under subsection 83(3), the question which arises on subsection 83(4) is not one of resolving which of two persons involved in such a campaign carried it on, or for whose account or in whose name it was carried on or who was the principal and who was agent for him. Rather it is a straightforward question of whether a person seeking exemption under subsection 83(3) carried on a campaign for the sale of shares of the companies to the public. In seeking an answer to this question it could not, we think, be successfuly maintained that each of several persons involved in jointly carrying on such a campaign was not a person by whom the Campaign was carried on. It would, in our view, be equally untenable to suggest that a father who directed the carrying on of such a campaign by his minor son and in so doing personally supervised and directed the transactions, even to the signing of his son’s name to documents, was not himself carrying on a campaign for the sale of shares of the company to the public. The circumstance that the father had shares of his own to sell and sold them in the course of the campaign would in our opinion make the suggestion even less tenable.
There is, in our view, little to differentiate the present from such a situation and in our opinion it would be difficult to conceive of a less substantial or more artificial reason for concluding that the appellant himself did not carry on such a campaign than to say that he did not do so because it was a company that carried it on when the company was owned and completely dominated by the appellant himself.
In our view a distinction must be made between cases where one person contracts or carries on business on behalf of another and certain other cases. Where the question is one of which party is liable on the contract made by the agent it is not difficult to conclude that the principal is party to the contract and the agent is not. Similarly where the agent carries on business on behalf of a principal it is the principal who carries on the business and is party to its acts and the agent is not personally a contracting party. Where, however, an employee does an act for his employer, such as, for example, driving his car, the employee is the doer even though in the eyes of the law for some purposes his driving is also the act of his employer. So, in our view, if, as in the present case, an officer or employee in the course of his duties carries on a campaign to sell shares he is, in fact, personally carrying on that campaign even though he is doing it as part of the business activities of his employer. This distinction is the basis for our conclusion that the appellant falls within the terms of subsection 83(4) even though he is not taxable under section 3 of the Income Tax Act in respect of the profits from the business that he carries on on behalf of his employer.