The taxpayer directly or through corporations acquired equipment to refurbish and rent to junior oil companies. He reported a capital gain on his transfer of equipment to a corporation ("CHL"), which was wholly-owned by him through a holding company, in exchange for a $135,000 credit to his "shareholder" loan account. The transferred equipment previously had been provided by him for use by CHL free of charge.
In finding that the taxpayer's gain was on capital account, Hogan J stated (at para. 38):
[T]he Equipment was used by the Appellant in his various business ventures over a very long period of time. It was acquired at the beginning in the 1980s and then sold to CHL in 2004 and 2005. There is no evidence to show that the Appellant sold similar equipment in earlier taxation periods. The Appellant did allow CHL and other corporations that he held an interest in to use the Equipment in their business ventures. There is no evidence to show that the Appellant modified or altered the equipment for the purpose of realizing a higher price.