adventure in the nature of trade

The taxpayers who were a director of a leather manufacturing company and an employee of a spinning firm, purchased a complete cotton spinning plant with a view to selling it as quickly as possible at a profit but, in the event, disposed of the plant piecemeal over the following two years at a gain.

Because the parent corporation of the taxpayer's employer ("Canada Metal") prohibited Canada Metal from dealing in futures or purchasing lead substantially in advance of its delivery, the taxpayer, who was Canada Metal's general manager and who perceived a substantial business advantage to Canada Metal in securing a substantial purchase of lead from overseas, entered into a contract for the purchase of lead from overseas with a view to selling the lead to Canada Metal at the time of delivery.

Before finding that the taxpayer has sustained a fully deductible loss on advances which he had made to a business venture, Pigeon J. stated (pp. 5281-5282):

In finding that a gain resulting from the purchase of silver by the U.K. taxpayer in order to hedge against a devaluation of the pound was taxable, Harman L.J. stated:

"In the first place, it seems to me that, supposing it was a hedge against devaluation, it was nevertheless a transaction entered into on a short-term basis for the purpose of making a profit out of the purchase and sale of a commodity, and if that is not an adventure in the nature of trade I do not really know what it is. The whole object of the transaction was to make a profit."

In finding that the taxpayer did not acquire two real estate properties in connection with an adventure in the nature of trade, Cullen J. stated (p. 6635):

"An adventure in the nature of trade involves an isolated transaction only ... However, the isolated nature of the transaction by itself is not enough to conclude that it is an adventure in the nature of trade."

In finding that the purchase by individual shareholders of a company of mortgage receivables and conditional sales contracts owing to that company was an adventure in the nature of trade in addition to being a transaction in the course of their business of managing the company, Thorson P. stated (at p.

Before going on to find that the misappropriation by the accused of money received from Italian relatives did not give rise to income from an adventure in the nature of trade, Sheppard J. stated (p. 6427):

"'Adventure or concern' means the isolated nature of the transaction. 'In the nature of trade' means this person has conducted himself in the same manner as a person who would have who is in the business of trading in land."

A transaction whereby the taxpayer purchased lead and resold it to his employer at a gain was an adventure in the nature of trade - notwithstanding that he engaged in the transaction in order to assist the business of his employer (of which he is a general manager) rather than to make a profit, and notwithstanding that this was the only transaction of that type which he had engaged in personally - in light of the fact that "he dealt with the lead in exactly the same manner as any dealer in imported lead would have done" (p.

In determining "when a transaction, which is not itself a trade or business, can be held to be 'an adventure or concern in the nature of trade' ... the question to be answered, ... was the asset acquired by the taxpayer as an investment or was it not."