The consideration received by the taxpayer for the sale of his business included an "annuity" during his lifetime of $1,000 per month. The monthly amounts received by the taxpayer were not income to him pursuant to s. 3(1)(b) of the Income War Tax Act, which provided for the inclusion in income of "annuities or other annual payments received under the provisions of any contract". Rinfret C.J. stated (p. 1015):
"... on the proper construction of section 3(1)(b) an annuity or annual payment, received under the provisions of a contract, such as the present one, in order to be taxable must be an annual profit or gain. The whole economy of section 3 - and for that matter all of the Income War Tax Act - is that it taxes income and not capital."