Urbandale Realty Corp. v. Minister of National Revenue, (2000) 252 N.R. 117 (FCA)

• Judge: Strayer, Robertson and Noël, JJ.A.
• Court: Federal Court of Appeal (Canada)
• Case Date: November 03, 1999
• Jurisdiction: Canada (Federal)
• Citations: (2000), 252 N.R. 117 (FCA)

Urbandale Realty Corp. v. MNR (2000), 252 N.R. 117 (FCA)

MLB headnote and full text

Temp. Cite: [2000] N.R. TBEd. MR.016

Urbandale Realty Corporation Limited (appellant) v. Her Majesty The Queen (respondent)

(A-449-97)

Indexed As: Urbandale Realty Corp. v. Minister of National Revenue

Federal Court of Appeal

Strayer, Robertson and Noël, JJ.A.

February 10, 2000.

Summary:

A land developer paid redevelopment charges to a regional municipality before it began physical construction on the land. The developer sought to deduct the redevelop­ment payments from income earned in the taxation year. Revenue Canada disallowed the deduction. The Tax Court of Canada upheld Revenue Canada's decision. The developer appealed.

The Federal Court of Canada, Trial Divi­sion, in a decision reported at 132 F.T.R. 24, dismissed the appeal. The developer appealed.

The Federal Court of Appeal, Robertson, J.A., dissenting, allowed the appeal and remitted the matter to Revenue Canada for reassessment.

Income Tax - Topic 1129

Income from a business or property - Deductions - General - Requirement that expense be incurred for producing income - A land developer paid redevelopment charges (RDC) to a regional municipality before it began physical construction on the land - The developer submitted that the RDC were deductible from income earned in the taxation year as a current expense under s. 9 of the Income Tax Act - The Federal Court of Canada, Trial Division, held that the RDC were not deductible because the charges were not matched by income earned in the taxation year - The Federal Court of Appeal held that the RDC were deductible on the basis that an expense may be deducted if made in the year for the purpose of producing income and it need not be traceable to revenues generated in the year - See para­graphs 16 to 37.

Cases Noticed:

Canderel Ltd. v. Minister of National Revenue, [1995] 2 F.C. 232; 179 N.R. 134; 95 D.T.C. 5101 (F.C.A.), refd to. [paras. 16, 44, footnote 12].

Toronto College Park Ltd. v. Minister of National Revenue, [1996] 3 F.C. 858; 199 N.R. 147; 96 D.T.C. 6407 (F.C.A.), refd to. [paras. 16, 44, footnote 13].

Canderel Ltd. v. Minister of National Revenue, [1998] 1 S.C.R. 147; 222 N.R. 81; 98 D.T.C. 6100 (S.C.C.), refd to. [para. 18, foot­note 16].

Toronto College Park Ltd. v. Minister of National Revenue, [1998] 1 S.C.R. 183; 222 N.R. 189; 98 D.T.C. 6088, refd to. [paras. 18, 44, footnote 16].

Oryx Realty Corp. and Shafer Investment Corp. v. Minister of National Revenue (1974), 74 D.T.C. 6352 (F.C.A.), refd to. [para. 22, footnote 19].

Minister of National Revenue v. Irwin, [1964] S.C.R. 662, refd to. [para. 22, footnote 19].

Consolidated Textiles Ltd. v. Minister of National Revenue (1947), 3 D.T.C. 958 (Ex. Ct.), refd to. [para. 29, footnote 25].

Mattabi Mines Ltd. v. Ontario (Minister of Revenue), [1980] 2 S.C.R. 175; 87 N.R. 300; 29 O.A.C. 268, refd to. [para. 29, footnote 25].

Whimster & Co. v. Inland Revenue Com­missioners (1925), 12 T.C. 813, refd to. [para. 32, footnote 26].

Shofar Investment Corp. v. Minister of National Revenue, [1980] 1 S.C.R. 350; 30 N.R. 60, refd to. [para. 32, footnote 26].

Friesen v. Minister of National Revenue, [1995] 3 S.C.R. 103; 186 N.R. 243; 95 D.T.C. 5551, refd to. [para. 32, footnote 26].

Minister of National Revenue v. Anaconda American Brass Ltd., [1956] A.C. 85 (P.C.), refd to. [para. 32, footnote 26].

Statutes Noticed:

Income Tax Act, R.S.C. 1952, c. 148, sect. 9(1) [para. 29, footnote 24]; sect. 18(1)(a) [para. 27]; sect. 18(9)(a) [para. 38].

Counsel:

Stephen Victor and David C. Nathanson, for the appellant

Robert McMechan, for the respondent.

Solicitors of Record:

Kimmel Victor Ages, Ottawa, Ontario, and McDonald & Hayden, Toronto, Ontario, for the appellant;

Morris Rosenberg, Deputy Attorney Gen­eral of Canada, Ottawa, Ontario, for the respondent.

This appeal was heard on November 3, 1999, at Ottawa, Ontario, before Strayer, Robertson and Noël, JJ.A., of the Federal Court of Appeal. The decision of the court was delivered on February 10, 2000, when the following opinions were filed;

Noël, J.A. (Strayer, J.A., concurring) - see paragraphs 1 to 41;

Robertson, J.A., dissenting - see para­graphs 42 to 54.