Urie,
J.A.:—There
are
three
respondents
in
the
six
appeals
at
present
before
the
Court.
Each
respondent
was
a
plaintiff
in
appeals
which
came
before
the
Trial
Division
in
respect
of
assessments
made
against
them
by
the
Minister
of
National
Revenue
("the
Minister”)
for
their
respective
1982
and
1983
taxation
years.
The
issues
are,
as
they
were
before
the
Trial
Division,
the
same
in
each
appeal.
For
convenience'
sake
I
propose
to
utilize
the
record,
reasons
for
judgment
and
judgment
in
Court
File
No.
A-306-90
which
bears
the
style
of
cause
The
Queen
v.
Foothill
Pipe
Lines
(Yukon)
Ltd.
These
reasons
for
judgment
will
apply
to
all
the
other
appeals.
Nova,
an
Alberta
Corporation
("Nova")
and
Westcoast
Transmission
Company
Ltd.
("Westcoast")
in
1976
caused
Yukon
to
be
incorporated.
Each
held
50
per
cent
of
the
issued
shares
of
Yukon
at
all
material
times.
Throughout
these
proceedings
they
are
sometimes
referred
to
as
"the
sponsor
companies".
The
purpose
for
the
incorporation
was
to
provide
a
vehicle
for
the
submission
of
a
proposal
to
the
appropriate
regulatory
authorities
for
the
transmission
of
natural
gas
from
the
Prudhoe
Bay
area
of
Alaska,
through
Canada
for
ultimate
distribution
in
the
United
States
of
America.
A
number
of
competing
proposals
were
submitted
to
such
authorities
both
in
Canada
and
the
U.S.A.
The
learned
trial
judge,
Collier,
J.,
has
neatly
and
succinctly
set
forth
in
his
reasons
for
judgment
the
other
facts
material
in
the
disposition
of
these
appeals.
[Reported
at
[1990]
1
C.T.C.
221;
90
D.T.C.
6160.]
None
of
the
parties
took
issue
with
his
statement
of
the
essential
facts.
I
do
not
think
that
I
could
better
express
his
recitation
thereof
as
disclosed
in
the
following
passages
from
his
reasons
(at
pages
222-26
(D.T.C.
6161-63)):
In
1977,
Canada
and
the
United
States
signed
an
agreement
in
respect
of
the
overall
project
of
transporting
the
Prudhoe
Bay
gas
south.
In
1978,
Parliament
passed
the
Northern
Pipeline
Act
(S.C.
1977-78,
c.
20).
The
Act
provided
for
the
construction
of
the
proposed
pipeline
to
be
built
on
Canadian
soil.
The
Northern
Pipeline
Agency
was
established
to
oversee
the
construction.
Different
segments
of
the
pipeline
would
[were
required
to
..]
be
owned
and
operated
by
different
companies
[in
different
geographic
areas.]
Certificates
of
public
convenience
were
declared
to
be
issued
to
companies
in
the
Foothills
Groups
for
the
construction
of
the
individual
segments:
(a)
Foothills
Pipe
Lines
(South
Yukon)
Ltd.
from
Beaver
Creek
to
Watson
Lake
in
Yukon
Territory.
The
shares
of
this
company,
are
owned
by
Yukon.
(b)
Foothills
Pipe
Lines
(North
B.C.)
Ltd.
for
the
portion
running
through
northern
B.C.
between
Yukon
and
Alberta.
The
shares
of
this
company
are
held
by
Yukon
(51
per
cent)
and
49
per
cent
by
Westcoast.
(c)
Foothills
Pipe
Lines
(Alta.)
Ltd.
for
the
three
segments
running
through
Alberta.
This
company
is
not
involved
in
these
appeals.
(d)
Foothills
Pipe
Lines
(South
B.C.)
Ltd.
for
the
segment
running
from
Coleman,
Alberta
to
Kingsgate,
British
Columbia.
This
company
is
not
involved
in
this
tax
assessment.
(e)
Foothills
Pipe
Lines
(Sask.)
Ltd.
for
a
portion
running
through
Saskatchewan
to
the
international
border.
Again,
this
company
is
not
involved
in
the
present
appeals.
All
these
segments
and
routes
are
shown
on
Exhibit
30.
The
completed
facilities
are
to
be
owned
by
the
four
companies
named
in
paragraphs
(a)
to
(e)
above.
It
is
not
necessary
to
set
out
the
shareholdings
in
the
companies
set
out
in
paragraphs
(c),
(d)
and
(e).
Yukon,
the
parent
company
of
each,
and
its
staff,
carry
out
administrative
functions
of
the
subsidiaries.
Yukon
does
not
own,
nor
is
it
intended
to
own,
any
actual
pipeline.
Construction
of
some
portions
of
the
proposed
pipeline
commenced
in
1980
and
were
completed
by
1982.
These
were
as
follows:
Caroline
to
Empress—the
Alberta
eastern
leg
Caroline
to
Coleman—the
Alberta
western
leg
Coleman
to
Kingsgate—the
South
B.C.
segment
Empress
to
Monchy—the
Saskatchewan
segment
None
of
the
other
portions
of
the
line,
including
the
portion
in
Alaska,
have
yet
been
built.
The
southern
portions
were
built
first
so
that
Alberta
natural
gas
could
be
transported
to
the
United
States.
If,
and
when,
the
whole
project
is
completed,
additional
facilities
will
have
to
be
added
to
the
segments
constructed,
in
order
to
carry
the
Alaska
gas.
In
these
appeals,
those
portions
of
the
project
that
have
been
built,
and
are
operating
gas
transportation
service,
were
referred
to
as
"pre-build"
and
also
as
"Phase
I”
(interchangeably).
Phase
II,
or
the
“mainline”,
is
the
portion
still
unbuilt.
The
original
objectives
were
that
Phase
11
would
be
completed
right
after
Phase
I
and
go
into
service
in
1985.
But
in
1982,
Phase
II
was
put
on
hold
for
various
reasons.
The
demand
for
gas
in
the
United
States
had
diminished;
interest
rates
were
very
high,
inflation
was
a
serious
factor.
The
companies
and
sponsors
involved,
both
in
Canada
and
the
United
States,
decided
to
delay
completion
of
the
line
until
1989.
Expenses
had
been
incurred
by
the
Foothills
companies
in
respect
of
the
studies,
submissions,
planning
and
design
of
the
whole
pipeline
project.
Some
of
these
expenses
did
not
relate
to
the
costs
of
the
pre-build
sections.
They
were
not
included
in
the
rate
base
for
those
portions,
as
earlier
recounted,
and
operated
in
Alberta
and
B.C.:
Caroline
to
Coleman
and
Empress,
and
Coleman
to
Kingsgate.
The
National
Energy
Board
had
approved
all
those
costs.
The
Board
also
approved
the
rate
base
charges
to
shippers
using
those
segments
for
transportation
of
the
Alberta
natural
gas.
The
expenses,
which
did
not
relate
specifically
to
the
Phase
I
or
pre-build,
amounted
to
approximately
192
million
dollars.
They
had
been
approved
by
the
Board.
They
were
allocated
to
the
various
Foothills
companies
as
follows:
|
Yukon
|
$107,394,000
|
|
South
Yukon
|
65,037,000
|
|
North
B.C.
|
14,697
,000
|
|
Alta.
|
4,293,000
|
|
Sask.
|
519,000
|
|
South
B.C.
|
nil
|
Those
costs
were
sometimes
referred
to
as
the
“Mainline
Preliminary
Expenditures".
Because
of
these
expenses,
and
the
postponement
of
the
completion
of
the
main
line,
Yukon
made
an
application
to
the
National
Energy
Board.
It
was
this
application
and
the
resulting
order
of
the
Board
that
gave
rise
to
the
tax
issue
before
the
Court.
Bruce
Simpson
is
an
officer
and
director
of
the
appellant
companies.
He
was,
at
the
relevant
times,
a
vice-president
of
those
companies.
He
summarized
the
purpose
of
the
application
as
follows:
Q
Why
did
Foothills
make
the
application
enumerated
in
paragraph
8K,
which
you've
read?
A
Well,
basically,
we
had
gone
on
and
we
had
incurred
this
200
million
dollars
of
Phase
II
preliminary
expenditures,
and
the
project
was
further
delayed.
And
the
position
that
we
took
was
that
without
Foothills
and
its
sponsors
having
made
these
expenditures,
there
would
be
no
pre-build
project.
And
we
thought
it
was
appropriate
that
our
shippers
on
the
pre-build
project
bear
some
share
in
the
burden
of
having
to
carry
these
expenditures,
and
we
were
applying
to
have
these
amounts
included
in
revenue.
Q
You
have
said,
used
the
word
“unique”.
How
was
this
application
unique?
A
It
was
unique
in
the
sense
that
we
didn't
apply
to
have
this
rate,
this
amount
included
in
rate
base.
It
was
also
unique
in
the
sense
that
we
didn't
apply
for
what
would
be
considered
a
normal
cost
of
service
recovery
on
the
expenditures.
And
by
that,
in
the
normal
cost
of
service
type
recovery,
you
are,
you
can
incorporate
the,
an
allowance
for
income
taxes
that
would
be
paid
in
respect
of
the
profit
component
or
of
the
collection.
And
the
basis
of
the
application
was
that
we
felt
there
would
be
a
sharing
of
the
burden
and,
as
such,
we
did
not
apply
for
the
gross
up
or
the
collection
of
income
taxes
in
respect
of
these
collections.
The
key
portion
of
the
formal
application
to
the
Board
was
put
in
the
following
terms:
8(k)
to
approve
for
inclusion
in
the
cost
of
service
for
Phase
I
commencing
September
1982
of
an
amount
for
amortization
of,
and
return
on,
expenditures
which
have
previously
been
approved
by
the
Board
for
inclusion
in
rate
base
being
the
pre-permit
costs
and
allocated
Zones
1
to
5
costs.
(1)
to
approve
an
amendment
to
the
Applicant's
Phase
I
Tariff
to
provide
for
the
inclusion
in
its
cost
of
service
of
the
amounts
referred
to
in
subparagraph
(k).
Zones
1
and
2
are
the
portions
of
the
line
to
run
from
the
Alaska-Yukon
border
to
the
Yukon
B.C.
border,
as
earlier
stated,
to
be
owned
by
South
Yukon.
Zones
3
and
4
are
the
portions
of
the
line
running
through
B.C.,
to
be
owned
by
North
B.C.
Zone
5
is
the
portion
of
the
line
running
from
the
B.C.-Alberta
border
to
Caroline,
Alta.,
to
be
owned
by
Alta.
On
August
12,
1982,
the
Board
issued
Order
No.
TG-4-82,
and
accompanying
reasons
for
decision.
The
Board
authorized
what
was
referred
to
throughout
these
proceedings
as
a
"Special
Charge",which
Yukon
could
include
in
the
rates
for
transportation
services
provided
to
shippers
making
use
of
zones
6
to
9.
Those
were
the
pre-build
or
Phase
I
portions,
earlier
described,
from
Caroline
to
Kingsgate
and
Caroline
to
Monchy,
Saskatchewan.
The
Board
used
the
expression
“Special
Charge"
in
paragraph
3(1)(i)
of
its
order.
The
moneys
received
by
the
three
companies
before
the
court
are
the
amounts
assessed
by
the
Minister
as
income.
The
amounts
involved
are
as
follows:
|
1982
|
1983
|
|
Yukon
|
$5,038,000
|
$14,791,000
|
|
South
Yukon
|
2,465
,000
|
7,238,000
|
|
North
B.C.
|
556,000
|
1,633,000
|
The
plaintiffs
assert
they
are
not
income,
or
should
not
be
included
as
income.
There
are
alternative
arguments
by
the
plaintiffs.
The
actual
words
used
in
the
Board's
order,
and
its
reasons
for
decision,
are
important
for
determination
of
the
tax
issue.
It
is
necessary,
therefore,
to
set
out,
in
full,
the
relevant
portions.
I
quote,
first,
from
the
order:
8.
Upon
filing
in
a
manner
satisfactory
to
the
Board,
the
items
indicated
in
paragraph
3,
subsections
(g)
and
(j)
to
(1)(i)
inclusive,
Foothills
(Yukon)
may
include
in
the
prebuild
cost
of
service
for
zones
6
through
9,
amounts
related
to
the
amortization
of
and
return
on
the
mainline
preliminary
expenditures
up
to
31
December
1981.
Such
amounts
are
not
to
exceed
four
percent
for
amortization
of
the
amount
approved
by
the
Board,
plus
16.0
percent
of
the
unamortized
balance
of
the
same
amount.
Furthermore,
the
provision
for
income
taxes
collected
in
the
prebuild
cost
of
service
is
not
to
increase
as
a
result
of
inclusion
of
these
amounts
related
to
the
mainline
preliminary
expenditures,
regardless
of
the
method
of
establishing
the
income
tax
provision
(i.e.,
the
normalized
or
flow-through
method).
Amortization
of
and
return
on
the
mainline
preliminary
expenditures
is
to
cease
on
1
November
1988,
unless
otherwise
approved
by
the
Board.
(g)
In
respect
of
amounts
approved
for
recovery
in
the
Cost
of
Service
under
the
Phase
I
Tariff
arising
from
the
mainline
preliminary
expenditures,
details
specifying
and
illustrating
how
the
amount
to
be
amortized
and
the
revenue
generated
therefrom
will
be
accounted
for
on
the
books
of
Foothills
(Yukon)
and
its
subsidiaries:
I
shall
refer
to
that
paragraph
later:
3(k)
A
letter
of
commitment
to
the
Canadian
Government
indicating
that
a
repayment
of
amounts
received
under
the
Phase
I
Tariff
in
respect
of
the
mainline
preliminary
expenditures
will
be
refunded
to
the
Alberta
producers
when
Alaskan
gas
flows
through
the
Foothills
(Yukon)
system;
I
now
quote
from
the
reasons
for
decision
(Exhibit
5)
at
page
27:
Decision
Having
considered
the
evidence
and
arguments,
the
Board
concludes
that
the
prebuild
tariff
should
include
some
charges
with
respect
to
the
preliminary
expenditures.
This
conclusion
recognizes
that,
although
a
part
of
the
burden
associated
with
these
expenditures
will
be
borne
by
the
Alberta
producers
in
the
short
run,
there
is
the
expectation
that
they
will
be
reimbursed
in
the
long
run
once
the
mainline
proceeds.
and
from
page
30:
The
Board
requires
that
all
references
to
the
charge
in
the
Tariff
shall
be
designated
the
“Special
Charge—Phase
II
Preliminary
Expenditures”.
In
respect
of
the
method
of
allocating
this
“Special
Charge"
(the
amortization
and
return
on
preliminary
expenditures)
to
zones,
the
Board
accepts
the
Company's
proposal
of
allocating
the
costs
on
the
basis
of
volume/distance.
In
approving
these
charges
for
inclusion
in
the
prebuild
cost
of
service
at
this
time,
the
Board
requires
provision
to
be
made
that
when
the
mainline
commences
operation
the
Alberta
producers
of
natural
gas
will
be
compensated
with
interest
for
having
been
required
to
absorb
these
charges.
To
this
end,
the
Board
plans
to
amend
the
special
regulations
in
respect
of
depreciation
charges
in
excess
of
four
percent,
which
are
currently
in
preparation,
to
provide
for
such
compensation.
However,
in
the
meantime,
the
Board
believes
that
before
any
amounts
related
to
the
mainline
preliminary
expenditures
are
included
in
the
prebuild
tariff,
a
commitment
from
the
Company
undertaking
to
effect
the
repayment
to
the
producers
should
be
provided
to
the
Government
of
Canada.
Accordingly,
the
Board
will
only
approve
the
subject
tariff
revision
upon
being
satisfied
that
the
appropriate
written
commitment
and
the
appropriate
tariff
amendments
have
been
made.
In
addition,
the
Company
is
required
to
file
with
the
Board
for
its
approval,
details
specifying
and
illustrating
how
the
amount
to
be
amortized
and
the
revenue
generated
therefrom
will
be
accounted
for
on
the
books
of
Foothills
(Yukon)
and
its
subsidiaries.
Yukon
gave
the
undertaking
to
repay
the
Special
Charges
(Exhibit
33)
and
filed
documents
on
how
the
charge
would
be
accounted
for
in
its
books
and
those
of
the
subsidiaries.
In
respect
of
the
accounting
details,
Yukon
initially
proposed
to
show
the
Special
Charge
funds
as
revenue.
But,
subsequently,
Yukon
reconsidered
the
matter.
On
accounting
advice,
the
charge
was
shown
as
a
deferred
liability.
The
Board
gave
approval
tothat
method
(see
Exhibits
6A,
6B,
7
and
9).
To
the
foregoing
should
be
added
the
following
facts
to
clarify
the
nature
of
the
problem
presented
by
the
appeal.
In
undertaking
to
transmit
Alberta
gas
through
the
pre-build
portion
of
the
pipeline,
Yukon
contracted
on
its
own
behalf
with
the
shippers
of
such
gas
for
transmission
thereof
through
zones
6
to
9.
Each
shipper
entered
into
a
service
agreement
with
Yukon
to
which
was
appended
a
rate
schedule
in
which
the
various
elements
of
the
cost
of
service
tariff
were
set
out
in
accordance
with
the
tariff
approved
by
the
Board.
Yukon
in
turn
contracted
with
the
subsidiary
companies
involved
in
Phase
I
to
transmit
the
shipper's
gas
through
the
subsidiaries’
segments
of
the
pipeline.
The
shippers
were
billed
by
Yukon
on
behalf
of
the
appropriate
subsidiary
companies
on
the
basis
of
the
cost
of
service
to
the
shipper
using
the
Phase
I
pipeline.
That
cost
of
service
comprised
the
following
items
in
respect
of
each
zone:
(a)
Amortization
rate
and
return
on
investments
rate,
applied
to
the
rate
base
approved
for
that
zone;
(b)
Operation
and
maintenance
costs
for
the
period
billed
;
(c)
Municipal
and
income
tax;
(d)
Special
Charge.
The
respondent
takes
the
position
that
(d),
Special
Charge,
was
not
part
of
the
cost
of
service,
i.e.
in
its
submission,
the
Special
Charge
was
not
an
amount
paid
by
the
Alberta
shippers
for
past
or
current
service
being
provided
them
in
the
transmission
of
the
gas
they
acquired
from
the
producers.
When
payment
was
received
by
Yukon
from
a
shipper
in
accordance
with
the
billing
procedure
outlined
above,
Yukon
allocated
to
each
cf
zones
6
to
9
that
part
of
the
payment
of
the
billing
attributable
to
that
zone.
The
Special
Charge,
however,
was
allocated
not
to
zones
6
to
9
but
rather
to
Yukon,
South
Yukon,
North
B.C.
and
Alberta
in
proportion
to
the
percentage
of
the
total
preliminary
expenditures
which
had
been
allocated
to
those
companies.
Those
were
the
expenditures
shown
by
the
learned
trial
judge
in
the
quoted
passage
from
his
reasons
above,
to
have
been
allocated
to
the
various
Foothills
companies.
Counsel
for
the
appellant
in
his
factum
used
the
following
example:
For
example,
and
to
use
the
example
of
the
plaintiff's
witness
Simpson,
if
the
total
billing
payment
received
was
$110,
$10
of
which
represented
the
Special
Charge,
and
South
Yukon
had
been
previously
allocated
25
per
cent
of
the
preliminary
expenditures,
the
$100
would
be
apportioned
to
zones
6
through
9
and
.50
of
the
$2
would
be
allocated
to
South
Yukon.
It
is
by
reason
of
this
latter
allocation
in
respect
of
the
1982
and
1983
taxation
years
that
the
amounts
in
dispute
in
these
appeals
have
risen.
At
trial,
in
essence,
the
submission
of
the
plaintiff-respondent
was
that
the
Special
Charge
ought
not
to
have
been
included
in
calculations
of
income
for
tax
purposes
in
the
tax
years
in
issue
because
the
Board
had
decreed
that
the
Special
Charge
be
repaid
when
the
mainline
is
completed.
That
order
of
the
Board
created
a
present,
subsisting
obligation.
If
the
mainline
is
completed
repayment
will
be
made.
If
it
does
not
proceed,
the
respondent
will
not
be
entitled
to
retain
the
Special
Charge
unless
the
Board
permits
it
to
do
so.
How
the
Board
will
decide
the
question
in
such
an
event
is
unknown.
What
is
known
is
that
until
the
Board
decides
differently
the
Special
Charge
is
a
liability
not
income.
The
simple
position
of
counsel
for
the
appellant
at
trial
was
that
there
was
no
present,
subsisting
liability
to
repay
the
Special
Charge
in
the
taxation
years
1982
and
1983.
That
obligation
could
only
arise
if,
as
and
when
the
mainline
commences
operation.
Until
that
time
the
use
of
the
moneys
derived
from
the
Special
Charge
was
absolute
and
unfettered.
Therefore,
it
was
income
in
the
respondent's
hands
for
tax
purposes.
In
support
of
his
contentions,
counsel
for
the
respondent
called
two
expert
witnesses,
Henry
Lawrie
and
Keith
Boocock,
both
experienced
chartered
accountants
and
members
of
well-known
accountancy
firms.
Both
were
of
the
opinion
that
the
Special
Charge
was
not
revenue
(i.e.,
income
since
the
terms
are
interchangeable)
and
would
not
be
treated
so
under
generally
accepted
accounting
principles
("GAAP")
because
it
was
a
present,
subsisting
liability
payable
in
the
future.
Moreover,
no
services
had
been
rendered
or
goods
sold,
the
presence
of
either
of
which
is
required
for
a
receipt
to
be
revenue.
Neither
was
it
a
contingent
liability.
The
appellant
also
called
a
highly
qualified
chartered
accountant,
Mr.
Kelsey,
who
did
not
deny
that
setting
up
the
Special
Charge
as
a
long-term
liability
on
the
balance
sheet
of
the
company
would
be
an
accounting
treatment
which
was
in
accordance
with
GAAP.
However,
it
would
also
be
in
accordance
with
GAAP
to
take
it
into
revenue
and
to
describe
the
circumstances
in
which
it
was
received
in
a
note
to
the
financial
statement.
He
believed
that
the
latter
alternative
was
preferable.
The
learned
trial
judge
dealt
with
those
submissions
in
the
following
passage
from
his
reasons
for
judgment
at
page
227
(D.T.C.
6164):
I
do
not
agree
with
the
defendant's
[appellant's]submissions.
I
accept
the
plaintiff's
[respondent's]
submissions.
In
so
doing,
I
subscribe
to
the
opinions
of
Mr.
Laurie
[sic]
and
Mr.
Boocock.
I
do
not
accept
Mr.
Kelsey's
proposition
that
the
Special
Charge
should
be
included
in
income.
All
three
experts
agree
the
plaintiff's
treatment
(not
to
include
it
in
income)
is
in
accordance
with
GAAP.
Mr.
Laurie
[sic]
and
Mr.
Boocock
both
say
the
liability
is
an
existing
one,
not
one
which
may,
or
may
not,
arise
in
the
future.
I
do
not
accept
Mr.
Kelsey’s
view,
based
on
his
interpretation
of
the
order
and
reasons
and
what
may,
or
may
not,
actually
happen
in
the
future,
that
the
liability
is
only
a
contingent
one.
I
found
Mr.
Kelsey,
in
cross-examination,
to
be
somewhat
of
an
advocate,
rather
than
dispassionate.
To
my
mind,
the
order
and
reasons
of
the
Board
are
quite
clear.
The
Special
Charge,
in
the
plain
meaning
of
the
language
used,
must
be
repaid.
The
Board
has
also
laid
down
the
time
for
repayment.
The
words
used
are:
”.
.
.when
Alaskan
gas
flows.
.
."
(para.
3(k)
of
the
Decision)
”.
.
.once
the
mainline
proceeds.
.
."
(Reasons
for
Decision
p.
27)
”.
.
.when
the
mainline
commences
operation.
.
."
(Reasons
for
Decision,
p.
30)
[Emphasis
added.]
The
defendant's
interpretation
was
that
the
repayment
provision
will
only
come
into
play
if
the
mainline
project
proceeds.
It
is
not,
in
my
view,
correct
to
say
that
what
is
contemplated
here
is
that
the
liability
is
a
latent
one,
which
may
never
arise,
if
say,
the
mainline
project
never
proceeds.
Mr.
Kelsey
felt
it
crucial
to
keep
in
mind
the
mainline
[may]
never
go
ahead.
That
possibility,
as
I
see
it,
is
neither
relevant
nor
proper,
in
determining
whether
the
Special
Charge
is
income.
I
do
not
accept
Mr.
Kelsey's
view,
nor
the
submissions,
on
behalf
of
the
defendant.
I
agree
with
the
plaintiff's
contention:
if,
for
some
reason,
the
remaining
project
does
not
go
ahead,
the
plaintiff
is
not
automatically
entitled
to
keep
the
Special
Charge;
that
will
be
a
matter
for
the
Board
to
deal
with.
I
conclude
the
proper
treatment
of
the
Special
Charge,
is
not
to
include
it
in
income
[section
9(1)
of
the
Income
Tax
Act].
In
coming
to
this
conclusion,
I
have
not
found
it
necessary
to
refer
to
the
decisions
cited
by
both
parties.
That
does
not
mean
I
have
not
considered
them.
The
appeal
was,
therefore,
allowed
and
the
reassessment
by
the
Minister
was
referred
back
to
him
for
further
reassessment
on
the
basis
that
the
Special
Charge
which
had
been
included
in
the
income
of
each
plaintiff-respondent
ought
not
to
have
been.
It
is
from
these
judgments
that
these
appeals
have
been
brought.
While
phrased
differently
in
the
parties’
respective
memoranda
of
fact
and
law,
the
sole
issue
in
the
appeals
is
whether
or
not
the
learned
trial
judge
erred
in
finding
that
there
existed
in
1982
and
1983
a
legal
obligation
on
the
respondents
to
repay
the
amounts
received
by
them
from
the
shippers
using
Phase
I
of
the
pipeline
attributable
to
the
Special
Charge.
That
this
correctly
defines
the
issue
was
essentially
conceded
by
counsel
for
the
respondent,
Mr.
Mitchell,
as
he
concluded
oral
argument
for
the
respondent,
although
other
reasons
for
upholding
the
trial
judgment
had
been
advanced
earlier
in
argument
by
his
two
colleagues
on
the
appeal.
A
considerable
body
of
jurisprudence
has
developed
certain
principles
applicable
in
determining
whether
or
not
sums
of
money
received
by
a
taxpayer
are
to
be
considered
as
income
in
the
tax
period
when
received
or
are
to
be
recorded
as
a
liability
or
in
some
other
way.
Among
those
principles
is
that
which
recognizes
that
according
to
generally
accepted
accounting
principles,
sums
received
by
a
taxpayer
should
be
recorded
in
a
taxpayer's
financial
statements,
in
the
way
which
most
nearly
reflects
its
actual
financial
position
at
any
given
time
or
for
any
given
period,
but
for
purposes
of
ascertaining
the
taxpayer's
income
for
tax
purposes
the
receipt
of
the
sums
may
require
to
be
recorded
differently.
In
Neonex
International
Ltd.
v.
The
Queen,
[1978]
C.T.C.
485;
78
D.T.C.
6339
at
499
(D.T.C.
6348)
I
had
occasion
to
express
the
principle
in
this
way:
There
is
no
doubt
that
the
proper
treatment
of
revenue
and
expenses
in
the
calculation
of
profits
for
income
tax
purposes
with
a
view
to
obtaining
an
accurate
reflection
of
the
taxable
income
of
a
taxpayer,
is
not
necessarily
based
on
generally
accepted
accounting
principles.
Whether
it
is
so
based
or
not
is
a
question
of
law
for
determination
by
the
Court
having
regard
to
those
principles
(see
MNR
v
Anaconda
American
Brass
Ltd,
[1956]
AC
85;
[1955]
CTC
311;
55
DTC
1220;
see
also
Associated
Investors
of
Canada
Ltd
v
MNR,
[1967]
Ex
CR
96;
[1967]
CTC
138;
67
DTC
5096).
In
this
case,
therefore,
while
the
evidence
of
the
three
experts
must
be
given
due
consideration
and
weight
as
matters
of
fact,
their
opinions
are
not
determinative
of
the
issue
before
us
which
is
one
of
law
for
the
Court
to
decide.
It
is
useful
then
to
recall
that,
as
a
matter
of
law,
amounts
become
taxable
as
income
in
the
year
of
receipt
provided
the
amounts
received
exhibit
the
nature
and
quality
of
income
at
that
time.
As
was
observed
in
this
Court
in
Commonwealth
Construction
Company
Ltd.
v.
The
Queen,
[1984]
C.T.C.
338;
84
D.T.C.
6420
at
340
(D.T.C.
6423),
the
phrase
“quality
of
income"
appears
in
the
judgment
of
the
Exchequer
Court
of
Canada
in
Kenneth
B.S.
Robertson
Ltd.
v.
M.N.R.,
[1944]
C.T.C.
75;
2
D.T.C.
655
at
90-91
(D.T.C.
660-61)
when
Thorson,
P.
said:
This
does
not,
however,
dispose
of
this
appeal,
for
the
question
remains
whether
all
of
the
amounts
received
by
the
appellant
during
any
year
were
received
as
income
or
became
such
during
the
year.
Did
such
amounts
have,
at
the
time
of
their
receipt,
or
acquire,
during
the
year
of
their
receipt,
the
quality
of
income,
to
use
the
phrase
of
Mr.
Justice
Brandeis
in
Brown
v.
Helvering
(supra).
In
my
judgment,
the
language
used
by
him,
to
which
I
have
already
referred,
lays
down
an
important
test
as
to
whether
an
amount
received
by
a
taxpayer
has
the
quality
of
income.
Is
his
right
to
it
absolute
and
under
no
restriction,
contractual
or
otherwise,
as
to
its
disposition,
use
or
enjoyment?
To
put
it
in
another
way,
can
an
amount
in
a
taxpayer's
hands
be
regarded
as
an
item
of
profit
or
gain
from
his
business,
as
long
as
he
holds
it
subject
to
specific
and
unfulfilled
conditions
and
his
right
to
retain
it
and
apply
it
to
his
own
use
has
not
yet
accrued,
and
may
never
accrue?
What
then,
is
the
evidence
in
this
case
to
determine
whether
or
not
payments
made
by
the
Alberta
gas
shippers
to
the
respondent,
as
required
by
the
billings
made
to
them
by
the
respondent,
exhibit
the
qualities
necessary
to
classify
them
as
income
for
tax
purposes?
First,
the
effect
of
the
Board's
order
No.
TG-4-82
dated
August
12,
1982
made
final
on
November
24,
1982,
was
to
approve
for
Phase
I
(zones
6,
7,
8
and
9)
on
an
interim
basis
until
November
1,
1988,
a
cost
of
service
tariff
and
it
was
so
described.
A
rate
base
for
each
zone
was
approved,
and
a
single
amortization
rate
(4
per
cent)
and
a
return
on
investment
rate
(16
per
cent)
[were]
approved
and
applicable
to
each
zone
in
Phase
I.
To
these
were
to
be
added
operating
and
maintenance
costs
pertaining
to
each
zone
and
recovery
of
municipal
and
income
taxes.
There
seems
to
be
little
doubt
that
this
aspect
of
the
cost
of
service
constituted
income
to
the
respondent.
To
this
cost
of
service
was
to
be
added
the
Special
Charge
which,
as
already
noted,
consisted
of
an
amortization
rate
of
4
per
cent
and
a
return
on
investment
rate
of
16
per
cent
applied
to
the
amount
of
preliminary
expenses
permitted
by
the
Board
to
be
included
namely
$124,000,000.
In
September
1982,
the
record
discloses
that
the
respondent
recorded
the
receipt
of
the
Special
Charge
as
income.
In
January
1984
the
respondent
advised
the
Board
that
it
would
be
treated
as
a
deferred
liability
rather
than
an
income
receipt
(Appeal
Book,
Vol.
2,
page
290
ff;
Transcript,
Vol.
2,
pages
159-160;
Appeal
Book
Vol.
1,
pages
296-97)
having
received
accounting
and
legal
advice
that
this
was
the
appropriate
method
for
recording
the
receipt
of
the
Special
Charge
because
of
the
Board's
requirement
that
ultimately
the
Special
Charge
be
repaid
to
the
Alberta
producers
when
the
whole
Alaska
gas
system
became
operational.
Second,
while
it
is
the
substantive
nature
of
the
payments
by
the
Alberta
gas
shippers
and
not
the
characterization
given
it
by
either
the
parties
or
the
Board
that
is
determinative
of
their
character
for
tax
purposes,
it
is
noteworthy
that
throughout
its
order
the
Board
referred
to
the
Special
Charge
for
recovery
of
the
mainline
Preliminary
expenditures
as
being
part
of
the
"Cost
of
Service",
(e.g.,
Appeal
Book,
Vol.
1,
page
202,
paras.
3(g)(h)(i),
4,
8.)
Third,
paragraph
3(k)
of
the
Board's
order
required
that
(Appeal
Book,
Vol.
2,
page
203)
:
(k)
A
letter
of
commitment
to
the
Canadian
Government
indicating
that
a
repayment
of
amounts
received
under
the
Phase
I
Tariff
in
respect
of
the
mainline
preliminary
expenditures
will
be
refunded
to
the
Alberta
producers
when
Alaskan
gas
flows
through
the
Foothills
(Yukon)
system;
In
response
thereto,
the
respondent
wrote
to
the
then
Minister
of
State
for
Economic
and
Regional
Development
on
September
28,
1982,
in
part
as
follows
(Appeal
Book,
Vol.
4,
page
524):
In
approving
these
charges
for
inclusion
in
the
prebuild
cost
of
service,
the
Board
stated
that
it
would
require
that
provision
be
made
so
that
when
the
mainline
commences
operation
the
Alberta
producers
of
natural
gas
will
be
compensated
with
interest
for
having
to
absorb
these
charges.
The
Board
further
stated
that
it
plans
to
amend
the
special
regulations
in
respect
to
depreciation
charges
in
excess
of
our
percent,
currently
in
preparation,
(in
this
letter
referred
to
as
the
“Special
Regulations")
to
provide
for
such
compensation.
Foothills
(Yukon)
acknowledges
that
under
the
current
formula
for
pricing
export
gas
it
will
be
appropriate
to
compensate
Alberta
producers
in
the
manner
to
be
provided
for
in
the
Special
Regulations
once
the
mainline
commences
operation
and
hereby
undertakes
to
the
Government
of
Canada,
as
represented
by
the
Minister
of
State
for
Economic
and
Regional
Development,
to
make
such
payments
to
the
shippers
for
the
benefit
of
the
producers
of
natural
gas
in
Alberta
and
in
such
amounts
as
may
be
determined
by
the
Board
pursuant
to
the
Special
Regulations.
It
was
counsel
for
the
respondent's
contention
that
the
foregoing
is
conclusive
evidence
that
the
respondent's
obligation
to
repay
the
Alberta
shippers
the
amounts
which
it
received
under
the
Phase
l
tariff
in
respect
of
mainline
preliminary
expenditures,
is
a
present,
subsisting
obligation
which
was
neither
income
nor
a
contingent
or
latent
liability.
This
is
because,
counsel
said,
the
decision
and
reasons
of
the
Board
specify
that
the
Special
Charge
is
to
be
repaid
“when
Alaska
gas
flows”,
“once
the
mainline
proceeds",
or
“when
the
mainline
commences".
Moreover,
he
argued,
if
the
mainline
does
not
go
ahead
the
respondent
will
not
be
automatically
entitled
to
keep
the
Special
Charge;
its
disposition
will
be
a
matter
for
the
Board
to
deal
with
at
that
time.
When
one
thinks
of
a
liability
of
the
kind
which
the
respondent
envisages
that
this
is,
one
would
expect
that
a
present,
subsisting
obligation
would
have
identifiable
payees,
repayment
would
be
at
identifiable
times
and
in
prescribed
or
identifiable
ways.
That
none
of
these
characteristics
existed
in
this
case
was
recognized
by
the
respondent,
as
is
shown
in
the
following
excerpt
from
its
comments
contained
in
its
letter
of
March
29,
1985
on
the
Board's
draft
regulation
in
respect,
inter
alia,
of
the
Special
Charge
(Appeal
Book,
Vol.
4,
page
595)
:
The
Company
has
the
following
comments
to
make
re:
the
National
Energy
Board's
Draft
Special
Charge
Accounting
Regulations:
In
general,
the
timing
of
a
regulation
does
not
seem
appropriate
from
the
Company's
standpoint.
The
whole
nature
of
the
"Draft"
is
to
put
regulations
into
place
today
for
Phase
II
which
isn't
likely
to
occur
in
the
1980's.
This
is
not
realistic
as
many
things
are
unknown:
the
timing,
who
the
shippers
will
be
at
the
time,
who
the
refund
will
be
made
to,
and
what
then
might
be
the
mix
of
Alaska
and
Canadian
gas
and
the
appropriate
method
in
light
of
those
circumstances
to
handle
any
refund
which
may
be
required.
The
regulation
could
only
be
meaningful
in
the
case
a
future
event
happens
exactly
as
forecast
today.
Things
change
and
regulations
put
in
place
today
for
a
future
event
could
be
outdated
in
a
short
time.
The
Special
Charge
regulations
as
not
drafted
are
no
longer
effective
in
many
respects.
Specifically,
the
sections
of
the
Draft
Regulations
deal
with
three
areas:.
.
.
[Emphasis
added.]
Presumably
as
a
result
of
these
observations,
no
regulations
had
been
enacted
as
at
the
date
of
trial.
Fourth,
the
payments
received
by
the
respondent
from
the
Alberta
shippers
as
Special
Charges
were
not
in
any
way
set
aside,
either
in
trust
or
by
the
creation
of
some
sort
of
reserve,
but
rather
were
used
by
it
in
the
same
way
as
any
other
such
revenue
receipts,
in
carrying
out
its
operations.
Such
payments
were
generated,
in
fact,
in
the
same
way
as
most
of
the
respondent's
revenue
and
were
billed
in
accordance
with
the
tariff
approved
by
the
Board
for
the
transmission
of
the
shippers
gas.
Fifth,
in
its
application
to
the
Board
for
the
inclusion
of
the
preliminary
expenditures
on
the
mainline
in
the
cost
of
service
tariff
for
Phase
I,
the
respondent
argued,
successfully,
that
the
Phase
I
part
of
the
pipeline
would
not
have
been
in
existence
to
enable
the
Alberta
shippers
to
ship
Alberta
gas
to
the
United
States,
had
the
preliminary
expenses
not
been
incurred,
since
it
was
part
of
the
whole
pipeline
for
theeventual
transmission
of
Alaska
gas.
In
that
respect
then,
the
Special
Charge
was
for
the
provision
of
a
service
to
the
shippers,
although
in
the
argument
of
the
appeal,
counsel
urged
us
to
find
that
no
service
was
provided
by
the
respondent
to
the
shippers
so
that
there
could
be
no
revenue
derived
from
the
provision
of
such
a
service.
Without
the
requirement
of
repayment
of
the
Special
Charges,
the
foregoing
evidence
would
strongly
indicate
that
they
constituted
income
in
the
hands
of
the
respondent
for
tax
purposes.
Did
the
facts
that
the
date
of
completion
of
the
pipeline
was
unknown
(and
that
date
must
occur
before
the
requirement
to
repay
can
be
implemented);
that
the
recipients
of
the
repayments
could
not,
in
the
relevant
years,
be
identified
and
that
the
method
of
repayment
was
completely
unknown,
deprive
the
obligation
of
the
degree
of
certainty
necessary
to
characterize
it
as
a
liability
for
tax
purposes
or
even,
as
the
respondent
termed
it,
as
a
deferred
liability?
On
the
basis
of
the
jurisprudence
I
think
they
do
deprive
the
obligation
of
that
quality.
I
turn
now
to
the
applicable
law.
The
Commonwealth
Construction
case,
supra,
provides
an
analogous
fact
situation.
There
the
appellant
obtained
a
judgment
in
a
mechanics
lien
action
in
1974
and
was
paid
the
full
amount
thereof
in
that
year
and,
in
1975
was
paid
the
costs
awarded
by
the
judgment,
each
subject
to
a
guarantee
if
the
judgment
was
reversed
or
varied
on
appeal.
When
certain
conditions
were
fulfilled,
counsel
for
the
appellant
paid
the
moneys
which
he
had
held
in
trust,
to
his
client
without
any
restrictions
as
to
their
use
other
than
the
obligation
to
repay
them,
pursuant
to
the
guarantee,
in
whole
or
in
part
should
the
judgment
be
reversed
or
varied.
The
appellant
did
not
include
the
sums
so
received
in
its
1974
and
1975
tax
returns.
As
a
result
the
Minister
issued
reassessments
for
those
years
to
include
the
sums
paid
for
the
judgment
and
costs.
After
referring
to
the
excerpt
from
the
judgment
of
Thorson,
P.
in
the
Kenneth
B.
S.
Robertson
case,
supra,
the
Court
had
this
to
say
at
page
342
(D.T.C.
6424):
To
apply
phrases
from
that
quotation
to
the
case
at
bar,
the
record
discloses
that
the
rights
of
the
appellant
to
the
amounts
paid
to
it
in
1974
and
1975
were
"absolute
and
under
no
restriction,
contractual
or
otherwise,
as
to
its
disposition,
use
or
enjoyment".
They
were
not
held
subject
to
any
specific
and
unfulfilled
conditions.
Once
the
conditions
precedent
imposed
in
the
letter
agreements
between
the
parties,
supra,
had
been
fulfilled,
as
they
were,
the
right
to
receive
the
moneys
and
to
retain
them
had
accrued
and
was
absolute.
True,
it
might
be
necessary
to
return
the
moneys
in
whole
or
in
part
if
the
appeal
were
successful.
But,
as
I
see
it,
that
was
a
condition
subsequent
which
did
not
affect
the
unrestricted
right
of
the
appellant
to
use
them
until
such
a
requirement
occurred.
It
did
not,
as
I
see
it,
affect
their
quality
as
income
upon
receipt.
As
to
the
difference
in
effect
of
a
condition
precedent
from
a
condition
subsequent
on
the
question
of
an
accrual
to
income,
the
learned
trial
judge
relied
on
a
quotation
from
Meteor
Homes
Ltd.
v
MNR,
[1960]
CTC
419;
61
DTC
1001
at
430-431;
[1007-8]
which
substantiates
the
view
which
I
expressed,
supra:
.
.
I.
Mertens,
Law
of
Federal
Income
Taxation,
Vol
2,
c
12,
p
127,
considers
"the
problem
of
when
items
are.
.
.deductions
to
the
taxpayer
on
the
accrual
basis”,
and
deals
with
it
at
p
132
in
these
terms:
Not
every
contingency
prevents
the
accrual
of
income:
the
contingency
must
be
real
and
substantial.
A
condition
precedent
to
the
creation
of
a
legal
right
to
demand
payment
effectively
bars
the
accrual
of
income
until
the
condition
is
fulfilled,
but
the
possible
occurrence
of
a
condition
subsequent
to
the
creation
of
a
liability
is
not
grounds
for
postponing
the
accrual.
(Emphasis
mine).
The
possibility
of
a
successful
appeal
does
not,
therefore,
appear
to
derogate
from
the
quality
of
income
of
the
payments
in
issue
at
the
time
of
receipt.
I
can
see
no
difference
in
the
principle
to
be
applied
on
the
facts
of
this
case
from
that
applied
in
the
factual
situation
in
the
Commonwealth
Construction
case.
If
an
amount
received
is,
as
here,
in
the
nature
of
income,
the
fact
that
in
the
future
the
recipient
may
be
under
an
obligation
to
repay
it
does
not
change
the
character
of
the
receipt
from
income
to
a
liability
whether
deferred
or
otherwise.
In
reaching
such
a
conclusion
it
is
important
to
have
regard
to
the
terms
of
the
contract
under
which
the
amounts
in
question
were
paid.
Here
the
shipper
was
obligated
by
its
agreement
with
the
respondent
to
pay
a
monthly
cost
of
service
charge
for
the
gas
it
transmitted
through
the
pipeline
during
that
month.
In
the
sample
service
agreement
between
the
respondent
and
Pan-Alberta
Gas
Ltd.,
which
was
Exhibit
35
in
the
record
(Appeal
Book,
Vol.
4,
page
526),
section
3
describes
the
service
rendered
by
the
respondent
to
the
shipper,
Pan-Alberta,
as
the
receipt,
transportation
and
delivery
of
gas,
for
which
service
the
shipper
was
obligated
to
pay
the
respondent
a
transportation
charge
for
each
zone
calculated
in
accordance
with
section
8
of
the
agreement
to
which
I
made
earlier
reference.
It
is
crystal
clear
from
that
agreement,
that
the
right
of
receipt
of
payment
for
the
provision
of
service
is
absolute
and
unconditional.
The
fact
that
a
portion
of
it
relating
to
the
Special
Charge
may
some
time
be
subject
to
repayment
does
not,
in
my
view,
change
the
character
of
the
payment,
which
is
income,
to
that
of
a
liability.
As
this
Court
held
in
The
Queen
v.
Burnco
Industries
Ltd.
et
al.,
[1984]
C.T.C.
337;
84
D.T.C.
6348
"an
obligation
to
do
something
which
may
in
the
future
entail
the
necessity
of
paying
money
is
not
an
expense",
and
only
proper
expenses
are
properly
deductible.
As
I
see
it,
the
possibility
of
any
liability
arising
out
of
the
Special
Charges
is
uncertain
and
therefore
is
contingent.
Furthermore,
it
is
not
possible
to
estimate
with
any
degree
of
accuracy
the
quantum
of
liability
or
who
the
recipients
of
the
repayments
would
be.
A
contingent
liability,
which
refers
to
a
contingency
which
may
or
may
not
occur,
could,
in
my
view,
aptly
describe
the
nature
of
the
obligation
imposed
by
the
order
of
the
Board
in
this
case.
It
is
not
a
present
liability
and
nor
is
it
a
deferred
one.
By
virtue
of
paragraph
18(1)(e)
of
the
Income
Tax
Act,
R.S.C.
1952,
c.
148
(am.
S.C.
1970-71-72,
c.
63)
(the
"Act"),
such
a
liability
is
not
deductible
in
the
computation
of
profits
notwithstanding
that
such
deductions
may
be,
for
financial
reporting
purposes,
in
accordance
with
generally
accepted
accounting
principles.
(See
Harlequin
Enterprises
Ltd.
v.
The
Queen,
[1977]
C.T.C.
208
at
212;
77
D.T.C.
5164
at
5166.)
As
a
result,
the
Special
Charges
represent
income
to
the
respondent
in
the
taxation
years
in
issue
so
that,
in
my
respectful
opinion,
the
learned
trial
judge
erred
in
finding
that
they
were
liabilities
properly
included
in
the
computation
of
the
respondent's
taxable
income
in
those
years.
I
will
deal
briefly
with
only
one
other
matter.
Earlier
in
these
reasons,
I
referred
to
the
fact
that
the
trial
judge
refused
to
accept
the
evidence
of
the
appellant's
expert,
Mr.
Kelsey,
that
the
Special
Charge
should
be
included
in
income
preferring
the
evidence
of
the
respondent's
two
experts.
More
importantly
he
made
a
finding
which
appeared
to
reflect
on
Mr.
Kelsey's
credibility,
when
he
made
this
comment
in
his
reasons:
“I
found
Mr.
Kelsey,
in
cross-
examination,
to
be
somewhat
of
an
advocate,
rather
than
dispassionate.”
Being
mindful
of
the
extreme
care
with
which
intermediate
appellate
courts
must
deal
with
findings
of
fact
by
a
trial
judge,
(N.V.
Bocimar
S.A.
v.
Century
Insurance
Co.
of
Canada
(1987),
76
N.R.
212.)
I
should
say
that
I
am
not
in
any
way
questioning
the
learned
trial
judge's
preference
for
the
evidence
of
the
respondent's
experts
to
that
of
the
appellant's
one
expert.
As
a
matter
of
law,
I
have
concluded
that,
contrary
to
what
the
trial
judge
found,
the
Special
Charge
was,
in
the
1982
and
1983
taxation
years,
income
in
the
hands
of
the
respondent
and
not
a
present,
subsisting
liability
at
that
time.
There
is
ample
support
in
the
jurisprudence
for
making
this
finding
as
a
matter
of
law.
If
any
further
authority
therefor
were
needed,
I
refer
to
the
judgment
of
Jackett,
P.
(as
he
then
was)
in
the
Exchequer
Court
case
of
Associated
Investors
of
Canada
Ltd.
v.
M.N.R.,
[1967]
C.T.C.
138;
67
D.T.C.
5096
where
at
page
143
(D.T.C.
5099)
of
the
report
he
said:
Profit
from
a
business,
subject
to
any
special
directions
in
the
statute,
must
be
determined
in
accordance
with
ordinary
commercial
principles
(Canadian
General
Electric
Co.
Ltd.
v.
M.N.R.,
(1962)
S.C.R.
3,
per
Martland
J.
at
p.
12;
[1961]
C.T.C.
512
at
520.)
The
question
is
ultimately
"one
of
law
for
the
court”.
It
must
be
answered
having
regard
to
the
facts
of
the
particular
case
and
the
weight
which
must
be
given
to
a
particular
circumstance
must
depend
upon
practical
considerations.
As
it
is
a
question
of
law,
the
evidence
of
experts
is
not
conclusive.
(See
Oxford
Motors
Ltd.
v.
M.N.R.,
(1959)
S.C.R.
548,
per
Abbott
J.
at
p.
553;
[1959]
C.T.C.
195
at
202;
and
Strick
v.
Regent
Oil
Co.
Ltd.,
(1965)
3
W.L.R.
636
per
Reid
J.,
at
pp.
645-6.
See
also
M.N.R.
v.
Anaconda
American
Brass
Ltd.,
[1956]
A.C.
85
at
p.
102;
[1955]
C.T.C.
311
at
319.)
[Emphasis
added.]
Accordingly,
for
all
of
the
above
reasons
I
would
allow
the
appeal
with
costs
throughout,
and
I
would
set
aside
the
judgment
of
the
Trial
Division
and
direct
the
Minister
to
restore
the
reassessment
which
had
been
directed
to
be
set
aside
by
the
judgment
under
appeal.
The
same
judgments
should
issue
in
each
of
the
other
five
appeals
but
since
the
appeals
were
tried
in
the
Trial
Division
and
argued
here
as
one,
there
should
be
no
costs
thereof
in
either
division.
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