in the course of

A corporation (“PC Bank”) in the Loblaw group, whose business was to grant credit through the operation of a MasterCard program, obtained the right to issue loyalty points (“PCB Points”) from an affiliate (the owner of rights to the program) and then started issuing PCB Points to its cardholders which could be applied by them towards purchases at Loblaw-branded stores.

An integrated nickel-mining public company (“Falconbridge”), entered into merger agreements with a more junior public company (“Diamond Fields”) which, through a 75%-owned subsidiary, held a valuable deposit at Voisey’s Bay in Newfoundland. The merger agreements provided for the immediate payment by Diamond Fields of a “Commitment Fee” of $28.2 million, and for the payment of a break fee of $73.3 million (calculated to bring the total of the two fees (the “Fees”) to 2.5% of the transaction value) on the completion by Diamond Fields of any competing offer.

In connection with the interim construction of a building, the taxpayer agreed in 1962 to pay interest on the borrowed money at a rate of 9%, plus "additional interest", in each of the 25 years after 1964 in which it was profitable, of 1% of its gross rental income from the building. The 1% fee incurred in each year arose in the course of borrowing money, and was deductible. "What appears to me to be the test is whether the expense, in whatever taxation year it occurs, arose from the issuing or selling or borrowing ...

Before going on to find that a lump sum received by an actor in consideration for his covenant not to exercise his vocation for a period of 18 months was a tax-free receipt, Sir Evershed M.R. stated (at p. 145) that "many sums of money received in the course of carrying on a trade, but not as a result of the trade as it was contemplated that it would be carried on in the normal course, may nevertheless be taxable".

In the course of considering a submission that s. 85B(1)(B) of the pre-1972 Act (now s. 12(1)(b)) did not apply to an adventure in the nature of trade, Cattanach J. stated (at p. 6321):

"The phrase 'in the course of' contemplates a succession of events in a regular order. It also contemplates a result which follows from an event being set in motion. Such a result will arise in the case of an isolated sale as well as in a continuous number of sales."