Regina Shoppers Mall Ltd. v. Minister of National Revenue, (1986) 1 F.T.R. 129 (TD)

• Judge: Pinard, J.
• Court: Federal Court (Canada)
• Case Date: December 03, 1985
• Jurisdiction: Canada (Federal)
• Citations: (1986), 1 F.T.R. 129 (TD)

Regina Shoppers Mall Ltd. v. MNR (1986), 1 F.T.R. 129 (TD)

MLB headnote and full text

Regina Shoppers Mall Limited v. Minister of National Revenue

(No. T-1052-84)

Indexed As: Regina Shoppers Mall Ltd. v. Minister of National Revenue

Federal Court of Canada

Trial Division

Pinard, J.

January 27, 1986.

Summary:

A company was incorporated in 1959 to purchase land (1960) for development of a shopping mall. The shopping mall was not feasible. The land was sold in 1976. The company treated the profit from the sale as a capital gain, one-half of which was taxable. The Minister assessed the profits as income from an adventure in the nature of trade, therefore fully taxable. The company's appeal to the Tax Review Board was dismissed. The company appealed.

The Federal Court of Canada, Trial Division, dismissed the appeal.

Income Tax - Topic 1020

Income from business or property - Income from property - Sale of land - Adventure in nature of trade - A company controlled by a real estate developer purchased land in 1960 for the development of a shopping mall - The project was not feasible, so the company sold the land in 1976 - At the time of acquisition, the company had no major tenancies or commitments - The Federal Court of Canada, Trial Division, affirmed that the profit from the sale was income from an adventure in the nature of trade and not a capital gain, because the acquisition was purely speculative "with the operating motive of putting it to profitable uses in one way or another, including its sale at a profit in the event that its desire to develop a shopping center on the site should prove not capable of realization".

Cases Noticed:

Hillsdale Shopping Centre Limited v. M.N.R., 77 D.T.C. 5256 (F.C.T.D.); (1981), 38 N.R. 103; 81 D.T.C. 5262 (F.C.A.), refd to. [para. 8].

Minister of National Revenue v. Froese, 77 D.T.C. 5364, refd to. [para. 16].

Regner Blok-Anderson v. M.N.R., 72 D.T.C. 6309, refd to. [para. 29].

Hiwako Investments Ltd. v. Minister of National Revenue, 78 D.T.C. 6281, refd to. [para. 30].

Racine, Demers and Nolin v. M.N.R., 65 D.T.C. 5098, refd to. [para. 31].

Lehrer v. M.N.R., 72 D.T.C. 6224, refd to. [para. 42].

Regal Heights Ltd. v. M.N.R., 60 D.T.C. 1270, refd to. [para. 44].

De Salaberry Realties Ltd. v. The Queen, 76 D.T.C. 6408, refd to. [para. 45].

Statutes Noticed:

Income Tax Act, S.C. 1970-71-72, c. 63, sect. 3, sect. 9, sect. 248(1).

Counsel:

Appearances: L.M. Little, Q.C., and John Gregory, for the plaintiff;

L.P. Chambers, Q.C., and Darlene Patrick, for the defendant.

Solicitors of Record:

Thorsteinsson, Mitchell, Little, O'Keefe & Davidson, for the plaintiff;

Frank Iacobucci, Deputy Attorney General of Canada, for the defendant.

This appeal was heard on December 3, 1985, at Vancouver, B.C., before Pinard, J., of the Federal Court of Canada, Trial Division, who delivered the following judgment on January 27, 1986.