The taxpayer, who was a senior lawyer, purchased from building contractors agreements (often in the form of lease-option agreements) for the sale of small homes outside Calgary. Notwithstanding that the deferred payments bore interest, generally at 6%, and were secured by the real estate (registered title to which was transferred to the taxpayer) the taxpayer purchased the agreement at discounts ranging from 20% to 40% in light of the risk of default. Judson J. upheld (at p. 1124) the judgment of the trial judge that:
"the appellant was in the highly speculative business of purchasing his obligations at a discount and holding them to maturity in order to realize the maximum amount of profit out of the transactions, and that the profits [were] taxable income and not a capital gain."