The taxpayer purchased an 18-suite apartment building in Vancouver in January 1973, mostly with the proceeds of mortgage financing at high rates of interest. She was not successful in 1973 in maintaining continued steady employment, and had also heard that the City was considering a moratorium on strata title conversions, and in July 1973, she wrote to the City applying for permission to convert the building into strata title apartments. Collier J stated (at pp. 6112-6113) that although “the plaintiff’s only motivating intention in January 1973 was the acquisition of an investment,” he was “satisfied the plaintiff intended to pursue the strata title scheme from the time she made application to the city” and that “at that stage … the plaintiff intended to convert to inventory.” The taxpayer received official approval in January 1974 and went on to sell strata units in her 1974 taxation year at a gain.
Collier J then went on to state (at p. 6113) that “I do not know the exact consequences those findings will have on the Minister’s assessment.”