T-1071-72
Wardean Drilling Co., Limited (Appellant)
v.
Minister of National Revenue (Respondent)
Trial Division, Cattanach J.=Calgary, January
15 and 16; Ottawa, February 11, 1974.
Income tax—Deductions for exploration expenses claimed
by predecessor company—Sale to successor company of one
of two properties owned by predecessor company—Sale held
to cover "substantially all" of predecessor company's prop-
erty—Income Tax Act, s. 83A (8a).
The sale in 1964 by the appellant as a "predecessor
corporation" within the meaning of section 83A(8a) of the
Income Tax Act to a "successor corporation" covered one
of two properties owned by the predecessor corporation.
The property sold was the sole source of income to that
corporation. Hence there was a sale of "substantially all of
the property of the predecessor corporation used by it in
carrying on that business in Canada" within the relevant
subsection. This precluded the predecessor corporation
from deducting exploration expenses previously incurred by
it. The predecessor corporation's appeal from the Minister's
assessments for the taxation years 1968 and 1969 was
dismissed.
M.N.R. v. Consolidated Mogul Mines Limited [1969]
S.C.R. 54, distinguished.
INCOME tax appeal.
COUNSEL:
M. A. Putnam and F. R. Matthews, Q.C.,
for appellant.
L. P. Chambers for respondent.
SOLICITORS:
MacKimmie, Matthews, Calgary, for
appellant.
Deputy Attorney General of Canada for
respondent.
CATTANACH J.—These appeals from the
appellant's assessment to income tax by the
Minister of National Revenue for its taxation
years ending March 31, 1968 and March 31,
1969 involve the applicability of subsection (8a)
of section 83A of the Income Tax Act the perti
nent portion of which, during the taxation years
in question reads,
83A. (8a) Notwithstanding subsection (8), where a corpo
ration (hereinafter in this subsection referred to as the
"successor corporation") whose principal business is
(a) production, refining or marketing of petroleum,
petroleum products or natural gas, or exploring or drilling
for petroleum or natural gas, or
(b) mining or exploring for minerals,
has, at any time after 1954, acquired from a corporation
(hereinafter in this subsection referred to as the "predeces-
sor corporation") whose principal business was production,
refining or marketing of petroleum, petroleum products or
natural gas, exploring or drilling for petroleum or natural
gas, or mining or exploring for minerals, all or substantially
all of the property of the predecessor corporation used by it
in carrying on that business in Canada,
there may be deducted by the successor corporation, in
computing its income under this Part for a taxation year, the
lesser of
(There then follows, in paragraph (e), the for
mula for determining the amount of expenses
incurred for drilling and exploring for petroleum
and natural gas in Canada and prospecting,
exploration and development expenses incurred
in searching for minerals in Canada which may
be deducted.)
Section 83A(8a) then concludes,
and, in respect of any such expenses included in the aggre
gate determined under paragraph (e), no deduction may be
made under this section by the predecessor corporation in
computing its income for a taxation year subsequent to its
taxation year in which the property so acquired was
acquired by the successor cSiporation.
The appellant was incorporated as a joint
stock company pursuant to the laws of the
Province of Ontario by letters patent dated
November 2, 1951 under the name of Old
Smokey Oils and Gas Limited which corporate
name was subsequently changed to Largo Oils
& Mines Limited and still later to Wardean
Drilling Co., Limited, the name in the style of
cause.
Throughout the period from the incorporation
of the appellant to March 31, 1969 the principal
business of the appellant has been,
(a) production of petroleum, petroleum prod
ucts or natural gas, and
(b) mining or exploring for minerals.
It has been agreed between the parties that
the appellant is a "principal business corpora
tion" within the meaning of paragraphs (a) and
(b) of section 83A(8a) but counsel for the appel
lant has emphasized that this agreement as to
facts in this respect is not to be construed as an
admission on his part that the business of the
appellant is exclusively either the business
described in paragraph (a) relating to petroleum
or natural gas or the business described in para
graph (b) relating to minerals but rather that the
business of the appellant was a conglomerate of
the business described in both paragraphs (a)
and (b).
Further, it was the contention on behalf of the
appellant that, in addition to carrying on the
business of mining and exploring for minerals in
its own name it also carried on that business
through a subsidiary company incorporated in
1955 under the name of Uranium Leaseholds
Ltd. during the periods 1956 to 1958 inclusive
and 1963 to 1966 inclusive. The appellant
owned approximately 80% of the issued and
outstanding shares in the capital stock of that
Company.
During the period from its incorporation to
March 31, 1967 the appellant incurred drilling
and exploration expenses with respect to
petroleum or natural gas and prospecting,
exploration and development expenses in
searching for minerals to the total amount of
$572,374.96 which expenditures qualified as
deductions in computing the appellant's income
within the meaning of section 83A(3) none of
which had been claimed by the appellant as a
deduction until its taxation years ending March
31, 1968 and March 31, 1969.
These facts are admitted by the Minister.
However in filing its income tax return for its
taxation yéar ending March 31, 1968 the appel
lant reported income in the amount of $5,896
from which it deducted the identical amount as
development and exploration expenses incurred
in prior years so that the income tax return
showed no taxable income and accordingly no
tax payable and that there was a balance of
$566,478.96 unused expenses available for
deduction against future income.
Similarly in filing its income tax return for its
taxation year ending March 31, 1969 the appel
lant reported income in the amount of $169,260
from which it deducted the like amount as de
velopment and exploration expenditures
incurred in prior years so that there was shown
to be no taxable income and therefore no tax
payable and that there remained after such
deduction a balance of $397,218.96 unused
expenses available for application against future
income of the appellant.
In assessing the appellant as he did the Minis
ter disallowed the appellant's claim for a deduc
tion from its 1968 income of the sum of $5,896
and its claim for a deduction from its 1969
income of the sum of $169,260 and computed
income tax and interest payable by the appellant
accordingly.
The Minister disallowed the sums so claimed
by the appellant as deductions in its respective
1968 and 1969 taxation years on the ground
that on April 21, 1964, the appellant sold to
Scurry Rainbow Oil Limited, a corporation
whose business was one described in paragraph
(a) of section 83A(8a), of which fact there is no
dispute, all or substantially all of the property
used by the appellant in carrying on its business
in Canada so that the deductions claimed by the
appellant in its returns of income for 1968 and
1969 were prohibited by section 83A(8a).
Assuming the facts to be as so alleged by the
Minister, the result would be that the appellant
is a "predecessor corporation" within the mean
ing of section 83A(8a) and Scurry Rainbow Oil
Limited is a "successor corporation" within the
meaning of that section.
The appellant as a predecessor corporation is
then precluded by section 83A(8a) from claim
ing those expenses and that right passes to the
successor corporation, in this instance, Scurry
Rainbow Oil Limited, subject to very stringent
limitations which would result in a nil or negli
gible tax advantage to Scurry Rainbow Oil
Limited.
Mr. Peter Abt was the officer of Scurry Rain
bow Oil Limited who negotiated the purchase of
property from the appellant. He testified that he
was interested in acquiring only this specific
property from the appellant and it was not his
intention to acquire the undertaking of the
appellant and this despite that he knew of the
drilling and exploration credits vested in the
appellant. He was not interested in succeeding
to those credits which would be negligible in the
hands of Scurry Rainbow Oil Limited in any
event. He had no interest in acquiring other
property of the appellant. He was aware of one
other property owned by the appellant but he
was not aware of any others.
In short the Minister's position is that the sale
of property on April 21, 1964 by the appellant
to Scurry Rainbow Oil Limited was a sale by
the appellant of "all or substantially all of the
property" used by it in carrying on its oil and
gas and mining business in Canada.
On the other hand the position taken by the
appellant is that section 83A(8a) is not appli
cable because the sale of the single property by
the appellant to Scurry Rainbow Oil Limited on
April 21, 1964 did not constitute a sale of "all
or substantially all of the property" owned by
the appellant and used by it in carrying on its
business in Canada at the time of the sale,
which is the condition which must exist in order
for section 83A(8a) to be applicable.
Counsel for the appellant carefully traced the
history of section 83A from its first enactment
in 1955 in support of his further contention that
what is contemplated in subsection (8a) is the
sale of the business undertaking of one corpora
tion to another in the same business.
At the conclusion of its financial year ending
October 31, 1962 the appellant had an interest
in four properties as follows,
(1) a 12i% interest in six petroleum and gas
leases from the Province of Alberta;
(2) a 5.49% interest in a gas lease described
as the Sturgeon Hewitt Big Lake lease;
(3) a 33 1/3% interest in two Crown
petroleum and gas leases, and
(4) a 5% carried interest in oil and gas leases
in legal subdivisions 5 and 6 in a designated
section.
In addition the appellant owned 52,000 shares
of the capital stock of Uranium Leaseholds
Ltd., which company owned mining claims
known as the Gold King claims.
On November 1, 1963, that is prior to the
conclusion of its 1963 financial year, the appel
lant sold its 5.49% interest in the Sturgeon
Hewitt Big Lake lease to Medallion Petroleums
Limited for a consideration of $7,936 and its 33
1/3% interest in two Crown petroleum and gas
leases to Murphy Oil Company, Limited and
Ashland Oil and Refining Company Limited for
a consideration of $1,000.
As a result of these two dispositions the
appellant, at the end of its October 31, 1963
financial year, remained in possession of the
12i% interest in Crown leases and its 5% car
ried or working interest in leases in legal sub
divisions 5 and 6.
On April 21, 1964 the appellant sold its 5%
interest in the leases in legal subdivisions 5 and
6 to Scurry Rainbow Oil Limited for a consider
ation of $5,000.
It is this sale by the appellant to Scurry Rain
bow Oil Limited which gives rise to the contro-
versy between the parties which dispute may be
succinctly expressed as whether this sale consti
tutes a sale of substantially all of the property
of the appellant used by it in carrying on its
business in Canada.
There is no question that this sale did not
constitute a sale of all of the property of the
appellant used in its business because it still
retained its 12jr%o interest in six Crown leases.
The first position taken by counsel for the
appellant was that subsection (8a) of section
83A must be read in the context of section 83A
as a whole as constituting a separate code of the
subject-matter therein dealt with and that what
is meant by the acquisition by a successor cor
poration of "all or substantially all of the prop
erty" used by a predecessor corporation used
by it in carrying on its business in Canada is the
acquisition of the business undertaking of the
predecessor corporation.
In support of this contention counsel for the
appellant, as I have said before, carefully traced
the history of section 83A from its first enact
ment in 1955 replacing prior legislation which
was of more limited extent.
Basically the legislation was designed as an
incentive to corporations, the business of which
is exploiting minerals or oil and natural gas, to
encourage the search for oil, gas and minerals in
Canada by permitting those corporations in
computing their income to deduct what would
otherwise be capital expenditures incurred in
exploration, drilling, prospecting and develop
ment and by permitting those expenditures to be
carried forward on a cumulative basis to be
applied against income in future years.
He also pointed out that under the laws of the
Provinces of Ontario and Manitoba, the amalga
mation of corporations was possible but this
was not so in the remaining jurisdictions of
Canada. In those jurisdictions non-technical
mergers were effected by the purchase of assets
of one corporation by another in exchange for
shares or by a take-over bid offer for shares. In
1958 section 851 of the Income Tax Act was
enacted to govern the succession to drilling and
exploration expenses in the event of amalgama
tion of two corporations.
Until the passage of subsection (8a) of section
83A in 1956 a corporate merger proceeding by
way of the transfer of a business undertaking by
one corporation to another did not include the
right to deduct drilling and exploration expenses
incurred by the transferring corporation.
By the enactment of subsection (8a) that right
was given, but subject to the limitation in para
graph (c) that the transfer had to be by way of a
non-technical merger, that is, by the purchase of
assets in exchange for shares of the purchasing
corporation. Paragraph (c) was repealed in 1962
thereby removing that limitation.
As I understood the submission by counsel
for the appellant he was outlining the general
object and purpose of the legislation to justify a
departure from the literal meaning of the words
used in subsection (8a) of section 83A.
In construing a subsection of an Act of Parlia
ment, the verbal construction of the particular
subsection in question, if it is plain and simple,
must govern. If there is any degree of doubt or
difficulty consequent upon the wording of the
subsection in question, then, and only then, the
Court may look to the circumstances attending
its passing and to the whole purport and scope
of the section of which the subsection forms a
part, to be collected from the various subsec
tions thereof other than the particular subsec
tion the meaning of which is in dispute.
I am satisfied, from the numerous decisions
on the cardinal rules for the interpretation of
statutes, that I ought not to have resort to the
general object of the enactment of section
83A(8a) if the words used therein are clear and
unambiguous.
In my view there is no ambiguity or lack of
clarity in the words used in subsection (8a) and
therefore I ought not to enter upon a refined
consideration of the question whether those
words carry out the object of the statute.
Counsel for the appellant clearly pointed out
that he made no admission that the principal
business of the appellant was one or other of (1)
exploring or drilling for petroleum or natural gas
or (2) mining or exploring for minerals but
rather he maintained that it was a combination
of both.
Accordingly he contended that the predomi
nant business of the appellant, after the sale of
its 5% interest in Crown oil and natural gas
leases on April 21, 1964, was that of mining and
that business was carried on by the appellant in
the exploitation of the Gold King mining claims
through its subsidiary, Uranium Leaseholds
Limited.
The appellant did not own any mining claims
in its own name. All claims that it had owned
had been written off by 1961 and 1962.
In the appellant's balance sheet for October
31, 1964 there is shown as an asset an invest
ment in a subsidiary at cost being $13,000 and
that subsidiary was Uranium Leaseholds
Limited.
On December 15, 1962 the appellant acquired
20,000 shares in Uranium Leaseholds Limited
at 25 cents per share for a total cost of $5,000.
It is my recollection of the evidence that this
cost of $5,000 was covered by the $5,000
received by the appellant on the sale of its 5%
interest in leases to Scurry Rainbow Oil
Limited.
On December 15, 1963 a further 32,000
shares in Uranium Leaseholds Limited were
acquired by the appellant at a cost of $8,000 or
25 cents per share. The appellant did not have
$8,000 to pay for the shares so it issued 1,000,-
000 of its own treasury shares for $10,000 and
applied $8,000 of the money so received in
payment of the shares of Uranium Leaseholds
Limited.
This was the means used to put money into
Uranium Leaseholds Limited which became a
subsidiary of the appellant in 1962.
Jesse Crockart who was a director of both the
appellant and Uranium Leaseholds Limited and
who was also a prospector and free miner had
staked the Gold King Fraction claims in British
Columbia.
At first it was contemplated that these claims
might be acquired by the appellant in exchange
for 500,000 of its treasury shares. This transac
tion was found to be impractical. Therefore the
Gold King claims were acquired by Uranium
Leaseholds Limited in exchange for the issue of
its treasury shares to Mr. Crockart.
Considerable exploratory work was done on
the Gold King claims but the bulk of those
expenses was charged to Uranium Leaseholds
Limited with the exception of an amount of
$350 which was a grub staking advance to
Crockart by the appellant and an amount of
$843.87 shown in the appellant's financial state
ment for the period ending October 31, 1964.
In 1964 the appellant sold the shares it owned
in Uranium Leaseholds Limited to Kodiak Min
erals Limited for $5,200. The $13,000 which
had been paid into the treasury of Uranium
Leaseholds Limited on the acquisition of its
52,000 shares by the appellant had been
expended on exploration expenses.
In my view the mining business carried on
with respect to the Gold King claims was that of
Uranium Leaseholds Limited and the facts that
the controlling shares in Uranium Leaseholds
Limited were owned by the appellant and that
the same persons were on the boards of direc
tors of both companies do not make that busi
ness the business of the appellant.
It is well settled that the mere fact that a
person, natural or artificial, holds all the shares
in a company does not make the business car
ried on by that company the shareholder's busi
ness nor does complete and detailed domination
by the shareholder over the company make the
company the shareholder's agent.
It is conceivable that there may be an
arrangement between the shareholder and the
company which will constitute the company the
shareholder's agent for the purpose of carrying
on the business and so make the business that
of the shareholder.
In the present appeals there was no evidence
whatsoever that such an arrangement existed.
It was the contention of counsel for the appel
lant that the appellant had put money into
Uranium Leaseholds Limited and had devoted
management time to the affairs of that com
pany. He relied upon the decisions of the
Supreme Court of Canada in M.N.R. v. Con
solidated Mogul Mines Limited' as authority for
the proposition that the financing and manage
ment by one company on behalf of another
constitutes the business of mining.
Spence J., speaking for the Court said [at
page 59]:
The respondent may be engaged in the business of mining or
exploring for minerals just as well as the owner of the
property if, under the contract with that company, it does
the mining or exploring for minerals.
Earlier he had described the business of the
Company as follows [at page 58]:
Although it continued after the year 1957 to carry out
considerable exploration work on properties in which it held
some kind of interest, its chief task in the years which are
now under appeal seems to have been the development and
management of properties owned by other companies. In
such companies the respondent had some share-interest
usually acquired by the contract made between the respond
ent and such company. These contracts provided for the
investment in the shares of the various companies and then
the control of the expenditure of the proceeds of such sales
of shares by the various companies in the exploration and
development of the various mining prospects.
In the present appeals there was no evidence
that any contract existed between the appellant
and Uranium Leaseholds Limited that the
appellant would do the mining and exploring for
minerals as was the circumstance in the Con
solidated Mogul Mines case nor was there evi
dence of any arrangement whereby the appel
lant undertook the management of the business
of Uranium Leaseholds Limited. All that was
present in these respects was that the directors
of the appellant and Uranium Leaseholds Lim
ited were common to both companies and that
' [1969] S.C.R. 54.
the appellant put funds in the treasury of Urani
um Leaseholds Limited by the purchase of its
shares but did not contract to do anything fur
ther such as to control the expenditure of those
funds in the exploration and development of the
Gold King claims. That was the function of
Uranium Leaseholds Limited.
Without deciding the question whether the
business of the appellant was a conglomerate of
mining, oil and natural gas, it is for these rea
sons that I have concluded that the mining busi
ness carried on with respect to the Gold King
claims, which was the only mining business at
the relevant time, was that of Uranium Lease
holds Limited and not that of the appellant.
Because of the conclusion I have reached on
the two foregoing contentions put forward on
behalf of the appellant, it follows that the
narrow issue upon which the appeals herein fall
to be determined is whether the sale by the
appellant of its 5% interest in the oil and gas
leases to Scurry Rainbow Oil Limited was the
sale of "substantially all of the property" of the
appellant used by it in carrying on the business
of exploring or drilling for petroleum or natural
gas in Canada.
At the end of its 1963 taxation year the
appellant was possessed of two properties, (1) a
12}% interest in six Crown petroleum and natu
ral gas leases and (2) a 5% carried or working
interest in the oil and gas leases sold by it to
Scurry Rainbow Oil Limited on April 21, 1964
that is in the appellant's next succeeding taxa
tion year. No other properties were acquired by
the appellant subsequently in those years
excluding the acquisition of further shares in
Uranium Leaseholds Limited from the proceeds
of the sale to Scurry Rainbow Oil Limited.
Consequently the question whether the sale
of that 5% interest by the appellant was a sale
by it of "substantially all of the property" used
by it in carrying on its business must be deter-
mined primarily by comparing that property
with the 12i% interest retained by the appellant
in the six Crown leases.
The words used in subsection (8a) of section
83A are "all or substantially all". Used in this
context the words "substantially all" must mean
the substantial portion of the whole business.
Accordingly I embark upon a comparison of
the facts relating to both properties.
Counsel for the appellant pointed out that the
12i% interest that the appellant had in the six
Crown leases was a 12}% interest in 960 acres
and that the 5% interest was a 5% interest in 80
acres. He therefore computed the appellant's
interests to be an interest in 120 acres retained
as against an interest in 4 acres which was sold.
I do not think that mere quantity of acreage
standing alone is the proper criterion for deter
mining substantiality. Regard must also be had
to quality.
Scurry Rainbow Oil Limited was the operator
of legal subdivisions 5 and 6 of section 1, town
ship 39, range 21 west of the 4th meridian. It
owned a 52.5% interest in those leases. There
were five other fractional interest owners, three
of whom, including the appellant, owned a 5%
interest, one owned a 12.5% interest and
another owned a 20% interest.
The appellant's interest, and I presume the
interest of the others, was at one time described
as a carried interest. By that is meant that the
operator bore all the expense of working the
leases. However when the leases became pro
ductive and generated income the operator
would deduct the expenses incurred in working
the lease proportionately among the fractional
interest owners so that the interest then became
a working interest.
At one time the appellant held a 10% interest
in these particular leaseholds but it surrendered
half of that interest as its share of the cost of
drilling a well thereby reducing its interest to
5%. I would assume that at that time the appel
lant's interest must have been a working interest
because it bore its proportionate share of the
drilling expense.
This leasehold proved productive. It was the
appellant's sole source of operating income. I
reach this information from an examination of
the appellant's financial statements for the years
ending October 31, 1962, 1963 and 1964 which
were the financial statements available to me. In
1962 the appellant's revenue from this source
after deducting royalties and the operator's
working expenses was $2,014.48, in 1963,
$1,889.83 and in 1964, $1,004.96. Bearing in
mind that the appellant's interest was 5% the
annual net production of this leasehold would
be approximately $40,000.
Scurry Rainbow Oil Limited was anxious to
consolidate its interest in this property and for
this reason attempted to purchasethe fractional
interests of the lesser owners. Accordingly it
offered to purchase the appellant's 5% interest
for $5,000 which offer was accepted by the
appellant.
On the other hand Scurry Rainbow Oil Lim
ited was also the operator and owner of the
largest interest in the six Crown leases in which
the appellant held a 12i% interest. Scurry Rain
bow Oil Limited acquired its interest in these
leases on May 9, 1957. From that date until the
spring of 1966, at which time the leases were
cancelled by the Crown, no exploration or drill
ing work whatsoever had been done on these
leases.
On June 14, 1965 the appellant offered to sell
its 12i% interest in these Crown leases to
Scurry Rainbow Oil Limited but the appellant's
offer was not accepted because Scurry Rainbow
Oil Limited did not wish to do so. Mr. Abt
testified that these were isolated leases and that
it would not be economically feasible to drill a
well thereon.
On April 20, 1965 the Department of Mines
and Minerals for the Province of Alberta
advised Scurry Rainbow Oil Limited that it was
required to commence drilling operations on
these leases within one year. The time to com
mence drilling could be extended upon applica
tion therefor and payment of a penalty. If drill
ing operations were not begun within the year
the leases would be cancelled.
Scurry Rainbow Oil Limited advised all of its
joint owners, including the appellant, of the
receipt of this notice. Under the operating
agreement any one of the joint owners could
undertake the drilling operations and thereby
become the sole owner.
No drilling operations were undertaken, no
application was made to extend the time to
begin drilling operations and accordingly the
leases were cancelled in April 1966.
Mr. Abt testified that Scurry Rainbow Oil
Limited paid the nominal rent on the leases for
1965 and billed the joint owners for their pro
portionate share.
There is no record of the payment of its share
of that rent by the appellant in its financial
statements but I would assume that it did so.
The appellant did not exercise its right to do
the required drilling itself and become the sole
owner. This is understandable because of its
precarious financial position at that time but
neither did it attempt to seek financing to do so.
The value of the appellant's 12i% interest
has been carried in its financial statements at
$640 which was the cost of the acquisition
thereof. In the financial statement for the year
ending October 31, 1964 that value was reduced
to nil. This was explained as an accounting
error. In the next year, October 31, 1964 that
value was restored to $640 and in the next
ensuing year it was reduced to $120.
The salient facts which emerge from this
comparison of the two properties are that the
5% interest in leaseholds which was sold to
Scurry Rainbow Oil Limited was the sole source
of the appellant's revenue. It was an oil produc
ing property on which extensive exploration and
drilling had been done. It was considered by
Scurry Rainbow Oil Limited to be a desirable
property which it sought to acquire and did
acquire. There was no exploration or drilling
work done on the six Crown leases at any time
between their acquisition by the operator in
1957 and the cancellation of those leases in
1966. All that was done by the joint owners,
including the appellant, was to pay their propor
tionate shares of the nominal rent to keep the
leases in good standing. The property lay dor
mant with no effort being made to explore and
drill for potential oil or natural gas deposits.
When threatened with the revocation of the
leases in the event of failure to drill, the leases
were allowed to lapse by the joint owners,
including the appellant. The appellant offered to
sell its interest to Scurry Rainbow Oil Limited
but that Company declined the appellant's offer.
Without purporting to decide the question
whether mere ownership of a minor percentage
in these Crown leases is use of that property in
carrying on the business of exploring or drilling
for oil or natural gas by the appellant the evi
dence is abundantly clear that this business was
not actively engaged in and that the prospect of
exploration and drilling thereon was remote.
As a consequence of the foregoing compari
son of the facts relating to the two properties
owned by the appellant I am led to the conclu
sion that the 5% interest in the leaseholds which
was sold by the appellant on April 21, 1964 to
Scurry Rainbow Oil Limited was a sale of sub
stantially all of the property used by the appel
lant in carrying on its business in Canada.
It follows from that conclusion that the appel
lant is precluded by section 83A(8a) from
deducting expenses previously incurred by it in
exploring or drilling for oil or natural gas or in
searching for minerals as the appellant sought to
do in its 1968 and 1969 taxation years.
Accordingly the appeals are 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.