Pollock v. Canada
A-75-90
Hugessen J.A.
14/10/93
16 pp.
Appeals from two F.C.T.D. judgments ([1990] 1 F.C. D-29) dismissing appeals against Minister's reassessment of appellant's income tax for 1979 and 1980 taxation years -- Minister characterizing sums of $117,234 for 1979 and $560,738 for 1980 as business income, profit realized by appellant on disposition of shares in petroleum exploration companies -- In relevant years, appellant exercising large number of employee stock options or warrants in companies -- Trial Judge finding multiplicity and frequency of appellant's transactions indicative of adventure in nature of trade -- Some of Minister's assumptions found by Trial Judge to have been destroyed by appellant -- Assumption relating to operating motivation for appellant's acquisition of shares not destroyed -- In answering question whether facts of case support conclusion plaintiff in fact engaged in adventure in nature of trade, Trial Judge entitled, obliged to rely on assumptions not disproved and on whole evidence -- Minister not considering one transaction as constituting for taxpayer two separate sources of income -- Under Income Tax Act, s. 7(1)(a), tax, upon income from employment, triggered by exercise of employee stock options as starting point for another transaction concluding with disposition of shares -- Act, s. 53(1)(j) irrelevant to taxation of income from business -- Minister right in calculating profit from sale of shares acquired on option so as to take account not only of option price but also of deemed remuneration under s. 7 -- Acquisition of shares not presumptively investment -- Trial Judge dealing with critical question of whether appellant's dispositions intended to locking in s. 7 benefit or timed so as to achieve maximum realization -- Trial Judge's conclusion on question of fact open to him, not based on error of law -- Trial Judge not wrong in including Independence shares in appellant's adventure in nature of trade and in confirming Minister's assessment -- Appeals dismissed -- Income Tax Act, S.C. 1970-71-72, c. 63, ss. 7(1)(a) (as am by S.C. 1977-78, c. 1, s. 3(1)), 53(1)(j).