The taxpayer financed virtually all of his investment in a limited partnership carrying on the business of renting apartments with borrowed money having a 25-year amortization schedule. Rothstein J.A. held that the finding of the Tax Court Judge that there was an expectation that this debt would be paid down was sufficient to establish a reasonable expectation of profit, so that the taxpayer's appeal of the disallowance of certain losses and interest expense should be allowed.
Létourneau J.A. (with whom McDonald J.A. concurred) went on to indicate (at p. 6561) that "the limited partnership was, admittedly, a viable business with a reasonable expectation of profit" and that the position of the Minister: "postulates that, as a result of the respondent's financial arrangements, the partnership in which the respondent invested did not carry on a business and was not a source of income, but only for the amount of the interest losses exceeding the income produced by the business". In this position was wrong as a matter of logic, law and common sense.