JACKETT, P.:—I do not think that this appeal calls for a review of the cases or for a review of the evidence. The facts are set out in the decision of the Tax Appeal Board.
On the one hand, there was a purchase of a parcel of real estate in downtown Toronto that was developed and in an incomeproducing state. Upon the evidence, it was purchased for incomeproducing purposes.
On the other hand, there is the fact that the sale had hardly been completed when there was a quick re-sale resulting in a substantial profit. Unexplained, that quick re-sale and profit might give rise to an inference that the acquisition and re-sale was a venture in the nature of trade within the meaning of those words as used in the definition of ‘‘business’’ in the Income Tax Act. The re-sale, however, has been explained by the evidence of Mr. Sebba, which I accept, that the increasing amounts of the offers made to the appellant by the person who purchased from the appellant, which offers were completely unexpected, became too great for him to resist.
I further accept his evidence that possibility of re-sale was not one of the possibilities contemplated by the appellant at the time that the appellant entered into the agreement for acquisition of the property.
For the purpose of determining whether a transaction is a transaction in the course of a business or is a venture in the nature of trade, the time as of which the intention of the purchaser is significant is ordinarily, in my opinion, the time when the purchase agreement becomes legally binding rather than the time when legal title is acquired.
As I understand Regal Heights Limited v. M.N.R., [1960] S.C.R. 902; [1960] C.T.C. 384, there was, at the time of acquisition by the appellant of the property there involved, two alternative intentions, one being the proposed development of a shopping centre and the other being re-sale in the event that it became impossible to carry out that development.
In this case I can find no evidence upon which there can be based any inference that, at the time of acquisition of the property, the appellant had in mind even a possibility of re-sale.
The only other case to which I think I should refer is Irrigation Industries Limited v. M.N.R., [1962] Ex. C.R. 346; [1962] C.T.C. 215. I refer to that case only to say that, having regard to the conclusion that I have reached, I do not find it necessary to deal with Mr. Goodman’s alternative argument.
The appeal is allowed with costs.
Judgment accordingly.