Mahoney,
J:—This
issue
is
whether
the
defendant
was
entitled
to
claim
capital
cost
allowance
for
1968
in
respect
of
certain
real
estate.
The
facts
of
the
case
are
fully
set
forth
in
the
decision
of
the
Tax
Review
Board
which
allowed
the
defendant’s
appeal
against
the
disallowance
of
that
claim
by
the
Minister
of
National
Revenue.
It
is
agreed
that
this
appeal
will
also
govern
the
cases
of
other
taxpayers
who
were
party
to
the
proceedings
before
the
Tax
Review
Board.
The
defendant
and
his
associates
entered
into
an
agreement
to
purchase
the
subject
property
on
December
4,
1968.
The
vendor
was
a
company
whose
equal
shareholders
were
an
active
real
estate
operator
and
a
dentist.
The
transaction
was
to
be
completed
on
or
before
December
15,
1968.
Title
was
actually
registered
in
the
name
of
one
R
Keith
Sullivan,
Trustee.
The
circumstances
of
Sullivan’s
ownership
clearly
establish
that
he
and
his
associates
were
equitable
mortgagees
of
the
property.
The
proposed
purchasers’
investigations
disclosed
a
number
of
misrepresentations
in
the
vendor’s
warranties
in
the
agreement
with
the
result
that,
on
December
23,
the
agreement
was
amended
in
certain
particulars
and
closing
was
postponed
to
December
27.
Sullivan
had,
on
December
12,
executed
a
reconveyance
of
the
property
and
left
it
with
his
solicitor.
That
solicitor,
a
close
relative
of
the
active
principal
of
the
vendor
company,
also
represented
the
vendor.
On
or
about
December
20
he
had
locked
the
document
in
his
vault
and
gone
to
Barbados
on
holiday.
He
returned
on
January
6
or
7,
1969.
Meanwhile,
his
partner
was
attempting
to
close
the
deal.
The
closing
date
was,
successively,
deferred
to
December
31.
Throughout
the
series
of
postponements
of
the
closing
date,
the
date
for
adjustments
was
kept
at
December
15.
The
vendor
was
anxious
to
sell;
the
purchasers
were
anxious
to
buy
but
the
deal
could
not
be
closed
because
Sullivan
refused
to
execute
a
duplicate
reconveyance
and
his
solicitor
expressly
forbade
his
partner
to
deliver
that
already
executed.
On
December
31,
the
purchasers
tendered
a
certified
cheque
for
the
cash
payable
and
an
executed
third
mortgage
direct
to
the
vendor
who
was,
of
course,
unable
to
close.
The
defendant
was
solicitor
for,
as
well
as
a
member
of,
the
purchasing
group.
Upon
the
return
of
the
vendor’s
solicitor
from
Barbados,
they
exchanged
recriminations
via
the
mail
culminating,
on
January
14,
1969,
in
the
purchasers
taking
out
a
writ
in
the
Supreme
Court
of
Ontario
directed
to
the
vendor.
On
January
24,
1969
the
sale
closed
on
precisely
the
terms
and
conditions
that
had
been
established
December
23,
with
adjustments
as
of
December
15,
1968.
It
is
the
plaintiff’s
position
that
certain
statements
in
the
defendant’s
letter
of
January
14,
1969,
taken
with
the
issue
of
the
writ,
constituted
a
repudiation
of
the
contract
completed
December
23,
1968,
and
that
the
contract
which
closed
January
24,
1969
was
a
new
contract
and
not
the
contract
which
had
been
in
force
at
the
end
of
1968.
The
statement
in
the
letter
is
the
closing
sentence:
Under
the
circumstances
we
are
obliged
to
commence
an
action
for
damages
against
the
Vendor.
The
fact
is
that
the
writ
announced
a
claim
for
damages
and
did
not
assert
a
right
to
specific
performance
of
the
contract.
The
defendant
admits
that,
at
the
time
he
issued
the
writ,
he
was
under
the
impression
that
an
election
had
to
be
made
at
that
point
as
to
the
remedy
to
be
sought.
He
did
not
know
the
election
is
required
at
the
time
of
trial.
He
says
that
the
letter
and
the
issue
of
the
writ
were
to
apply
pressure
to
expedite
the
closing
of
the
deal
and
it
was
not
intended
to
repudiate
the
1968
agreement,
That
is,
in
all
the
circumstances,
a
considerably
more
reasonable
explanation
than
that
given
by
the
defendant
in
his
examination
for
discovery
(questions
212
to
215,
inclusive)
when
he
said
that
he
thought
the
question
had
been
considered
and
that
the
purchasers
did
not
still
want
the
property.
The
letter
of
January
14,
while
threatening
the
action
for
damages
against
the
vendor,
clearly
acknowledges
that,
while
recourse
might
be
there,
the
fault
lay
not
with
the
vendor
but
with
Sullivan
and
the
solicitor.
The
defendant
was
an
entirely
credible
witness
as
was
Bernard
Karp,
the
active
principal
of
the
vendor.
Sullivan’s
recollection
of
events
was
vague.
His
impression
of
the
combined
effect
of
the
purchase,
leaseback
and
right
of
repurchase,
contained
in
the
conveyance
by
which
he
had
become
owner,
was
grossly
inaccurate
and,
in
my
view,
incomprehensible
in
a
chartered
accountant.
Whenever
his
cross-examination
got
tough,
he
took
refuge
in
the
response
that
he
had
relied
on
the
solicitor.
The
plaintiff
had
subpoenaed
but
did
not
call
the
solicitor.
Some
appreciation
of
the
vigour
with
which
the
plaintiff
has
pursued
the
defendant
and
his
associates
may
be
gleaned
from
the
fact
that
Mr
Sullivan
was
allowed
his
claim
for
capital
cost
allowance
for
1968
in
respect
of
the
property
after
objecting
to
a
reassessment.
That
blunder,
even
if
irremediable,
cannot
deprive
the
defendant
of
a
right
he
is
entitled
to
by
law.
The
action
is
dismissed
with
costs.