Hart v. The Queen, 82 DTC 6237, [1982] CTC 275 (FCA)

Thurlow, CJ:—The principal issue in this appeal is whether the appellant, in the 1977 taxation year, received or enjoyed a benefit in respect of, in the course of, or by virtue of his office, within the meaning of paragraph 6(1 )(a)* [1] of the Income Tax Act, when Hartholm Farm Limited, a company which operates a farm and of which he was the principal shareholder and a full time employee, paid his expenses, amounting to $2,618.38 for a package tour which he and his wife took to Australia and New Zealand.

The tour lasted 23 days. It included visits to a number of cities and agricultural areas and was arranged so as to enable the participants to view agricultural operations in these countries and techniques employed in such operations. The activities included sightseeing tours of the cities, visits to places of interest and entertainment and some social activities. The tour and its program had been planned over a 15 month period by an association of farmers, including the appellant. At least one of the purposes of the tour was to gain knowledge of agricultural methods and techniques in use in Australia and New Zealand that might be applied in the agricultural operations of the members of the association. There was evidence that two techniques observed by the appellant were put to very profitable use by his company after his return. The Minister, in assessing the appellant, recognized the business purpose of the appellant’s trip by allowing the whole of the expenses paid by the company as a deduction in computing its income and by including in the appellant’s income as the value of the benefit received or enjoyed by him a portion only of the amount paid.

The learned trial judge, on evidence of the appellant which was not contradicted and which he regarded as entirely credible, found as follows:

As to the first question, the tour was of personal value to the Harts entirely apart from its business value. There may well be an incidental personal value inherent in many purely business trips but the personal benefit to the Harts in this case was not a mere incident of a business trip. A holiday oriented toward one’s business or professional interests remains a holiday; it is not, per se, a business trip.

The learned trial judge then proceeded to estimate the value of the personal benefit to the appellant at one-half of the amount paid by the company. He said:

As to Mr Hart, I am of the opinion that, as nearly as it can be estimated on the evidence, the holiday value of the trip was half the $2,618.38 paid for him by Hartholm.

On the basis of the interpretation of the statute adopted by the Exchequer Court in Philp et al v MNR, [1970] Ex CR 496; [1970] CTC 330; 70 DTC 6237, these findings, in my opinion, conclude the appeal. The Court, in view of the learned trial judge’s comment on the credibility of the appellant’s evidence is, no doubt, in as good a position as was the learned trial judge to form its own opinion both as to whether the appellant received or enjoyed an economic benefit represented by the value of the tour as a holiday trip and as to the value of the trip as a holiday, but such questions are purely questions of fact and opinion and where the view taken by the trial judge is not unreasonable or based on some erroneous principle, the Court, on appeal, will not substitute a different view merely because it might, had it been the Court of first instance, have preferred such a different view.

In the present case, in my opinion, the findings are well supported by the evidence and there is no basis upon which they should be disturbed. The tour program, while predominantly concerned with activities that would be of interest to persons engaged in agricultural operations and which, for that reason, might be of little interest to persons of other callings was, as the learned trial judge observed, nevertheless a holiday. It was a tour of such activities combined with visits to other points of interest to tourists generally and with activities and entertainment quite unrelated to agricultural pursuits. It is impossible, in my view, to conclude that such a tour was purely or even essentially a business trip or that it had no value as a holiday and represented no economic benefit as a holiday trip received or enjoyed by the appellant. Having reached that conclusion, the value of the benefit as received or enjoyed is very much a matter of opinion or assessment and I see nothing unreasonable or erroneous in the learned trial judge’s conclusion that such value was equal to one-half the expense paid by the company.

I would dismiss the appeal with costs.