http://decisions.fca-caf.gc.ca/fca-caf/decisions/en/item/143247/index.do
Salloum v. Canada (March 14, 2016 – 2016 FCA 85, Ryer (author), Near, Boivin JJ. A.).
Précis: This was a decision on combined income tax and GST appeals. In the Tax Court Justice Owen found that Mr. Salloum was not engaged in business during the period under appeal and dismissed his appeals. He appealed to the Federal Court of Appeal where his appeals were dismissed from the bench on the basis that the Court could not interfere with Justice Owen’s finding that Mr. Salloum was engaged in “the ‘inherently personal activity’ of getting an education so that, at some future time, he could use that education to pursue a profit.” [Para. 6].
As a result the appeals were dismissed with costs.
Decision: The Court of Appeal found no basis to interfere with the findings of Justice Owen in the Tax Court:
[5] The Taxpayer accepts that the Judge used the correct legal test with respect to the question of whether the Taxpayer was carrying on a business for ITA purposes. However, the Taxpayer argues that in applying this test to the facts, the Judge committed a palpable and overriding error that ought to compel us to intervene.
[6] In considering the evidence presented to him, and applying the test laid down in Stewart v. Canada, 2002 SCC 47, [2002] 2 S.C.R. 645, the Judge specifically noted the Taxpayer’s own testimony to the effect that during the time period under consideration, the Taxpayer did not offer mechanic’s services to the public because he lacked the qualifications to do so and his lack of qualifications made it impossible for him to obtain liability insurance. The Judge found that, during the time frame under consideration, the Taxpayer was not engaged in the current pursuit of profit. Instead, the Judge concluded that the Taxpayer was pursuing the "inherently personal activity" of getting an education so that, at some future time, he could use that education to pursue a profit.
[7] In our view, the evidence in the record before the Judge amply supports this conclusion and in reaching it, the Judge committed no palpable and overriding error, even if, as argued before us today by Appellant’s counsel, the alleged business was a research and development business, rather than an automotive service business, as found by the Judge in paragraph 40 of his reasons.
As a result the appeal was dismissed from the bench with costs.