The only dealing in shares by the taxpayer (whose objects did not include the purchase and sale of shares) was the purchase of 4,000 treasury shares of a junior mining company and the sale of those shares between three weeks and four months later at a gain. The trial judge, in finding that the gain was on income account, noted (in addition to the short holding period) that the purchase was made with borrowed funds, the shares were speculative and that dividends were not anticipated for some considerable time.
In finding that the gain was a capital gain, Martland J referred to cases finding that transactions in commodities or vacant land were adventures in the nature of trade, and then stated (at p. 352-3, SCR):
Corporate shares are in a different position because they constitute something the purchase of which is, in itself, an investment. They are not, in themselves, articles of commerce, but represent an interest in a corporation which is itself created for the purpose of doing business. Their acquisition is a well-recognized method of investing capital in a business enterprise.
This is not the sort of trading which would be carried on ordinarily by those engaged in the business of trading in securities. ... What the appellant did was to acquire a capital interest in a new corporate business venture, in a manner which has the characteristics of the making of an investment, and subsequently to dispose, by sale, of that interest.