Bellingham v. Canada
T-2349-86
Jerome A.C.J.
7/7/94
6 pp.
Appeal from reassessment for 1984 taxation year-Town of Grand Centre in Alberta expropriating plaintiff's land in 1981-Land Compensation Board fixing compensation, awarding interest-Alberta Court of Appeal dismissing appeal from award-Cash settlement reached in 1984 representing 74% of Board's award-Plaintiff receiving $577,106.19-Minister assessing profit as business income-Plaintiff alleging settlement funds should be allocated in accordance with, and in same proportion, as constituent elements appearing in Board's award-Appeal allowed to extent $181,319, representing ordinary interest, to be taxed as interest- Profit realized on disposition of property acquired as adventure in nature of trade taxable as income whether disposed of by sale or expropriation-Part of settlement funds constituting ordinary interest and should be taxed accordingly-Shaw v. Canada, [1993] 2 F.C. 190 (C.A.) applied-Interest not owing because land expropriated, but because Town not immediately paying capital sum-Parties agreeing ordinary interest component of settlement to be determined on pro rata basis, i.e. $181,319-Income Tax Act, S.C. 1970-71-72, c. 63, ss. 9, 12(1)(c) (as am. by S.C. 1980-81-82-83, c. 140, s. 4)-Expropriation Act, R.S.A. 1980, c. E-16, s. 66(4).