A-159-72
Louis Richstone (Appellant)
v.
The Queen (Respondent)
Court of Appeal, Thurlow and Pratte JJ., Hyde
D.J.—Montreal, January 22, 1974.
Income tax—Sale of interests in business—Restrictive
covenant by vendor—Payments received for—Income Tax
Act, R.S.C. 1952, c. 148, s. 25(bXiii).
In 1963 the Richstone brothers H and L sold to G their
interests in certain companies for $300,000 payable $150,-
000 down and the balance over ten years. The sale contract
contained covenants by H and L not to compete with any of
the companies for 25 years. H and L were assessed to
income tax for 1964 and 1965 on the payments made to
them in those years on the ground that the payments were
received in consideration for the restrictive covenant within
the meaning of section 25(bXiii) of the Income Tax Act.
Held, upholding the decision of Collier J. ([1972] F.C.
623) that H and L were properly assessed.
INCOME tax appeal.
COUNSEL:
P. Vineberg, Q.C., for appellant.
N. A. Chalmers, Q.C., and W. Lefebvre for
respondent.
SOLICITORS:
Phillips and Vineberg, Montreal, for
appellant.
Deputy Attorney General of Canada for
respondent.
The judgment of the Court was delivered by
THURLOW J. (orally)—We do not need to hear
you Mr. Chalmers and Mr. Lefebvre. Notwith
standing the very able argument of Mr. Vine-
berg on behalf of the appellant we are all of the
opinion that the amounts of $10,000 received
by the appellant from Richstone Bakeries Inc. in
each of the years 1964 and 1965 can reasonably
be regarded as having been received in consid-
eration for covenant with reference to what the
appellant was not to do after the termination of
his employment as an officer or employee of
Richstone Bakeries Inc. within the meaning of
section 25 of the Income Tax Act and that the
Tax Appeal Board and the learned trial judge
[Collier J. [1972] F.C. 623] did not err in con
cluding that these amounts were properly
included in the appellant's income for the taxa
tion years in question.
The appeal will be dismissed with costs.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.