Peach v. The Queen (March 14, 2017 – 2017 TCC 40, Bocock J.).
Précis: At trial Justice Bocock dismissed the taxpayer’s appeal both on the issue of rental losses and expenses from a financial consulting business. That decision was sustained in the Federal Court of Appeal on the issue of rental losses but reversed on the consulting business and remitted back to the Tax Court for a determination of the reasonableness of the expenses claimed. Justice Bocock made that determination on the basis of the trial record and additional submissions of the parties. He allowed somewhat less than half of the amounts at issue. Costs were awarded to Mr. Peach on the informal procedure Tariff, subject to the right of the parties to make further submissions within 30 days.
Decision: The decision contains detailed commentary on the various types of expenses claimed but to a certain extent turns on the following general factual background:
 Of particular note in that regard, are the following facts concerning the 2009 and 2010 taxation years adduced into evidence by Mr. Peach, either in his testimony in chief, his documents or on cross-examination:
(a) the vast majority of Mr. Peach’s testimony related to his purported rental property;
(b) his testimony and submissions regarding his financial consulting business were primarily directed towards demonstrating that he had a business source of income (a finding the Court originally made);
(c) Mr. Peach spent no more than 8 hours a week on his business during 2009 and 2010;
(d) primarily, these efforts consisted of attending training sessions in St. John’s, some 125 km away from his residence;
(e) aside from training, business growth was attempted through face to face, direct marketing rather than advertising and promotion, which was discouraged by the principal, Primerica;
(f) Mr. Peach produced no travel log for his business travel, nor did he testify that he kept one;
(g) Mr. Peach previously operated the business for 10 years and incurred losses in each year;
(h) his losses increased as time passed;
(i) Mr. Peach moved to Nunavut in August of 2010;
(j) Mr. Peach claimed expenses and capital cost allowance for five (5) vehicles during the 2009 and 2010 appeal years;
(k) Mr. Peach was the only person undertaking the financial consulting business;
(l) Mr. Peach testified that the operation of his business was not “reasonable”, but rather “hopeful”; and
(m) Mr. Peach produced no expense receipts for the appeal years, however, the Respondent admitted she did not contest that the quantum of the amounts claimed were incurred by Mr. Peach, but only that such amounts were not reasonable or were not incurred in respect of the business.
As a result Mr. Peach was allowed somewhat less than half of the expenses at issue:
 On the basis of the foregoing, the findings contained below represent this Court’s determination, on the facts, of the extent of the unreasonable expenses and, by deduction, the reasonable expenses that shall be allowed Mr. Peach for his business in the 2009 and 2010 taxation years. As a summary, the original expenses claimed, those which were unreasonable and those which are reasonable and allowed for the two taxation years are as follows:
Costs were awarded to Mr. Peach on the informal procedure Tariff, subject to the right of the parties to make further submissions within 30 days.