In Brown v R, 2022 FCA 200, the Court overturned the judgment of the Tax Court, which had found that the taxpayer, a lawyer, undertook the management of an art gallery for a personal purpose: he began managing the gallery because his wife, the former manager, became ill and unable to do the job herself. The Federal Court of Appeal panel found that, while the taxpayer’s motivation might have been personal (he wanted to help his wife), the activity as such was not. Accordingly, the higher level of scrutiny for personal activities (per Stewart) was not engaged and the taxpayer’s losses were deductible provided he was engaged in the “pursuit of profit” (per Paletta), which the Court found he was.
