It was held that a thoroughbred racing horse had not been bought by the taxpayer with a view to its eventual sale, and its sale three years later for stud purposes following an unexpected injury to its leg gave rise to capital gain. In rejecting an argument that because horse racing is highly speculative, with little assurance of winnings, the horse must have been bought with a view to eventual sale, Rouleau J. stated: "On such logic every person who purchases property to pursue a hobby is, for income-tax purposes, in the business of buying and selling that type of property."
He also noted that the notion of secondary intention should be used cautiously in an era when capital gains no longer are completely exempt from taxation.