The individual taxpayer ("Vincent") was the sole shareholder and director of the corporate taxpayer ("9067"). The corporate taxpayer acquired a building ("the Immovable") on 1 April 1999, which became the taxpayer's principal residence as well as lodgings for the taxpayers' visiting European customers in the taxpayers' auto and aircraft resale business. The Immovable burned down on 24 August 1999, and 9067 was paid $1,170,800 in insurance. The Minister assessed the taxpayers on the basis that their net proceeds in respect of the Immovable, including the insurance benefits, were profits realized on income account rather than capital gains.
Hogan J. granted the taxpayer's appeal. The Minister's position was based chiefly on the disparity between the Immovable's purchase price of $180,000 and its value (which was ostensibly $2,000,000, and was at least equal to the $1,170,800 in insurance benefits). However, the evidence demonstrated that the taxpayers had not acquired the property with an intention to resell: the resale of immovables was outside Vincent's expertise; the taxpayers were aware of the previous owner's difficulties in reselling the property; the property was not put up for sale after it was acquired; and Vincent and his wife moved into the Immovable after it was acquired.