| Case name: |
Bellingham v. Canada (Minister of National Revenue) |
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| Jurisdiction: |
Canada - Federal |
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| Court: |
Federal Court - Trial Division |
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| Parties: |
Name |
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Appearing as |
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Bellingham, Brenda E. |
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Plaintiff |
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Canada |
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Defendant |
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| Before: |
Decision maker |
Designation |
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Jerome, James Alexander |
A.C.J. |
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| Lawyers: |
Name |
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Appearing for |
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Nichols, Neil W. |
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Plaintiff |
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Titosky, Douglas B. |
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Defendant |
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| Decision: |
Appeal by the Claimant from an income tax reassessment by Canada for the 1984 taxation year. In that year, the Claimant had been successful in obtaining a payment of compensation pursuant to the Expropriation Act, R.S.A. 1980, c. E-16, for the expropriation of two parcels of land by the Town of Grand Centre. The compensation resulted from a negotiated lump sum settlement in which the Claimant received a payment in the sum of $672,606. The full amount of this payment was reported by the Claimant on her 1984 income tax return as business income. Later, the Claimant sought to have the return re-assessed so that a portion of the amount received in the amount of $181,319 would be treated as interest income, another portion in the amount of $114,272 would be excluded from taxable income on the basis that it represented non-taxable punitive damages and the balance treated as a capital gain from the disposition of a capital asset. The Minister alleged that the entire payment resulted from a negotiated global settlement in which the components were not expressly allocated and as such the entire amount was properly assessed as business income. It was held that the parties had agreed on the components of the settlement, that the ordinary interest component in the amount of $181,319 should be taxed as interest in accordance with s. 12(1)(c) of the Income Tax Act and the remainder, including the additional interest, should be taxed as income from a business. The appeal was allowed. Costs were awarded to the Claimant. |
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| ExLaw citation: |
[1994] EXLAW 14 |
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| Parallel citations: |
(1994) 49 A.C.W.S. (3d) 407 |
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[1994] 2 C.T.C. 290 |
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(1994) 94 D.T.C. 6564 |
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[1994] F.C.J. No. 1064 |
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(1994) 83 F.T.R. 77 |
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