In 1989 the taxpayer purchased a vacant residential property in Scarborough, containing two residential rental units, with the expectation that the initially-anticipated monthly rental revenues of $1,900 per month would increase by approximately 6% per annum in succeeding years. Before going on to reverse a finding of the Tax Court that the properties had not been acquired with a reasonable expectation of profit, Linden J.A. stated (at p. 6009) that the reasonable expectation of profit test appearing in the Moldowan case:
"is a useful tool by which the tax-inappropriateness of an activity may be reasonably inferred when other, more direct forms of evidence are lacking. Consequently, when the circumstances do not admit of any suspicion that a business loss was made for a personal or non-business motive, the test should be applied sparingly and with a latitude favouring the taxpayer, whose business judgment may have been less that competent."