property

At a time that James Aitchison owed $2.1 million in taxes, he transferred his law practice to a newly-incorporated professional corporation (the appellant) and thereafter worked for it as an unpaid volunteer or employee. His two daughters (also lawyers) worked for the appellant at market salaries and in the first three years received over $1 million in dividends as a result of “an improbable share structure and a complete disregard for dividend rights.”

It was held that where a court order was made under the Companies Act 1929, for the amalgamation of two corporations, including an order for the "transfer" of all the "property" of the predecessor corporations to the amalgamated corporation, the court order did not automatically transfer employment contracts between employees and the predecessor corporations to the amalgamated corporation. "Property" was defined in the Companies Act 1929 to include "rights and powers of every description". Lord Chancellor Viscount Simon stated (p. 1024):

A portion of the consideration paid by a purchaser of shares of operating companies in which the taxpayer had been a significant shareholder (directly, or through holding companies) was allocated as consideration for his entering into non-compete agreements. Sharlow J.A. stated (at paras. 25, 53):

Estey, J. found that the interpretation of the initial version of s. 68 should be interpreted in light of the broad meaning of "property," in s. 248(1), stating in the latter regard (at para. 7) that:

The extremely broad definition of property leaves very little in the 'non-property' classification. It would appear to include a contract right and might in some circumstances include a right to assert a covenant by a vendor to deliver 'know-how'".

There was a transfer of property to the taxpayer for purposes of s. 160(1) when her husband, who was the joint mortgagor on a house that at the relevant times, was owned by her, paid monthly amounts due under the mortgage. By virtue of such payments, the taxpayer became less indebted and her equity in the property increased. The words "property" and "transfer" had been broadly defined in the jurisprudence.

The taxpayer entered into "leasing contracts" respecting heavy equipment which typically had a term of approximately five years, provided for monthly rental payments, provided that five months before the expiry date the taxpayer could exercise an option to purchase the equipment for a sum equal to the remaining rentals, and provided that the taxpayer was responsible for the maintenance and good condition of the equipment.

Lamarre Proulx TCJ. found (at p. 1384) that the definition of "depreciable property" meant that: