Roland St-Onge (orally: November 4, 1977) [TRANSLATION]:—The appeals of Messrs André Vaillancourt, Jean Vaillancourt, Robert Vaillancourt, Aldéric Vaillancourt and Gaston Vaillancourt were brought before me on November 3, 1977 in Montreal, Quebec. It was agreed that the decision reached in the appeal of Mr Robert Vaillancourt would apply to the other cases.
The Board must decide whether the profit realized from the sale of a plot of land in 1971 constitutes a taxable gain.
At the hearing, the appellants admitted the following allegations in the reply to the notice of appeal:
5. (a) On April 22, 1968, Mr Robert Vaillancourt purchased from Mr Gérard Chalifoux part of plot 267 located south of Chemin de I’Equerre in the parish of Ste-Rose for the sum of $35,000;
(b) according to a trust declaration dated the same day, Mr Robert Vaillancourt acted for Messrs André, Robert, Aldéric, Gaston and Jean Vaillancourt in this transaction;
(c) the trust declaration describes the participation of these persons as follows:
Mr André Vaillancourt 1/8 Mr Robert Vaillancourt 2/8 Mr Aldéric Vaillancourt 2/8 Mr Gaston Vaillancourt 1/8 Mr Jean Vaillancourt through Mrs Pauline Grenier-Vaillancourt 2/8 (g) On November 16, 1971, Mr Robert Vaillancourt sold the said part of plot 267 to the Société Immobilière Arliane SA de Panama for $209,663.72, his share of the profit amounting to $17,584.94 . . .
Further, Mr Gaston Vaillancourt, a notary, explained that his brother Robert had loaned Mr Chalifoux $12,000 in first and second mortgages on a forty-acre plot of land, a sum which the latter was unable to repay.
In view of the fact that the appellants were from a large family (eighteen children raised on a farm), they preferred to buy the land for $35,000 instead of suing a friend.
Gaston, Aldéric and Robert Vaillancourt all gave sworn testimony that at the time of the purchase they did not intend to sell this land at a profit but to recover the sum of $12,000 and to own land that might be used for gardening or for a race track.
Counsel for the respondent was unable to prove his allegation that, between 1956 and 1974, each of the persons involved in the transaction under examination had been actively involved in one or more commercial transactions in the region. Instead, he admitted that the evidence did not show any history of speculation on the appellants’ part.
The evidence further showed that the appellants had sold the land because they feared substantial tax increases as a result of the new Real Estate Assessment Act, c 50, adopted in early 1971.
Mr Gaston Vaillancourt explained that the appellants had agreed to sell their land for $2,600 per acre and that the real estate agent had to increase the price in order to pay his commission.
Recent decisions of the Federal Court have shown that the judges of this Court attach a great deal of importance to the testimony of appellants. Once the latter appear to be telling the truth as to their intentions, the Court grants them the benefit of the doubt.
In the case at bar, the appellants are the sons of a farmer and it is reasonable to believe that their intention was to own a forty-acre plot of land while enabling a member of their family to recover $12,000. They could use this land for gardening or for a race track, which their children could use.
The. Board believes that the appellants spoke the truth and therefore allows the appeals.
Appeal allowed.