A-722-94
| CORAM: MacGUIGAN, J.A. |
ROBERTSON, J.A.
McDONALD, J.A.
B E T W E E N:
GERALD STERNBERG
Appellant
- and -
HER MAJESTY THE QUEEN
Respondent
HEARD at Toronto, Ontario, Monday, June 9, 1997.
JUDGMENT delivered from the Bench at Toronto, Ontario, on Monday, June 9, 1997.
REASONS FOR JUDGMENT BY: MacGUIGAN, J.A.
A-722-94
| CORAM: MacGUIGAN, J.A. |
ROBERTSON, J.A.
McDONALD, J.A.
In Re The Income Tax Act
B E T W E E N:
GERALD STERNBERG
Appellant
- and -
HER MAJESTY THE QUEEN
Respondent
REASONS FOR JUDGMENT
(Delivered from the Bench at Toronto, Ontario,
Monday, June 9, 1997)
MacGUIGAN, J.A.:
We have not been persuaded that Sarchuk J.T.C.C. made any reviewable error as to the facts in the case at bar. Nor do we believe he overlooked any evidence, and of course the weighing of that evidence was within his sole discretion.
The appellant also argued that the learned Tax Court Judge fell into other errors of law, principally by not taking account of this Court's decision in Tonn v. The Queen (1995), 96 DTC 6001 (which the appellant acknowledged was decided only subsequently), where Linden, J.A. wrote for the Court that:
| The Moldowan [[1978] 1 S.C.R. 480] test should be applied sparingly where a tax- payer's "business judgment" is involved, where no personal element is in evidence, and where the extent of the deductions claimed are not on their face questionable. |
But not only is Tonn not a farming case, it also deals with the issue of a reasonable expectation of profit, rather than with the question in the case at bar, viz., is farming a chief source of income? A finding of a reasonable expectation of profit, as I had occasion to put it in Timpson v. The Queen (1993), 93 DTC 5281,
| gets, at best, only to a finding that farming is "a source of income," not that it is "a chief source of income," as required by s.31(1) of the Income Tax Act. |
In our view, the governing cases on the present facts are those followed by the Tax Court Judge, Mohl v. The Queen (1989), 89 DTC 5236 (subsequently approved by this Court on 16 January, 1992, A-341-88), and the Queen v. Poirier (1992), 92 DTC 6335.
The appellant raised a separate argument as to cases that readily recognized start-up costs, but as this Court held in The Queen v. Roney (1991), 91 DTC 5148, 5155 (per Desjardins, J.A.) "start-up costs... cannot be considered as the basis for an alternative ground of decision." The issue comes back inevitably to that of the chief source of income.
The appeal will therefore be dismissed with costs.
"Mark R. MacGuigan"
J.A.
FEDERAL COURT OF CANADA
Names of Counsel and Solicitors of Record
COURT NO: A-722-94
STYLE OF CAUSE: GERALD STERNBERG
- and -
| HER MAJESTY THE QUEEN |
DATE OF HEARING: JUNE 9, 1997
PLACE OF HEARING: TORONTO, ONTARIO
REASONS FOR JUDGMENT BY: MacGUIGAN, J.A.
Delivered from the Bench at Toronto, Ontario
on Monday, June 9, 1997
APPEARANCES:
Mr. Paul Bates
and
Mr. Simon A. Clements
For the Appellant
Ms. Marilyn Vardy
For the Respondent
SOLICITORS OF RECORD:
Mr. Simon A. Clements
and
Mr. Paul Bates
Lerner & Associates
Barristers & Solicitors
130 Adelaide Street
Suite 2400, Box 95
Toronto, Ontario
M5H 3P5
For the Appellant
George Thomson
Deputy Attorney General of Canada
For the Respondent
FEDERAL COURT OF CANADA
Court File No.: A-722-94
Between:
GERALD STERNBERG
Appellant
- and -
| HER MAJESTY THE QUEEN |
Respondent
REASONS FOR JUDGMENT