"The appellant was a chartered accountant and licensed trustee in bankruptcy and one of the main shareholders of Andrich Developments Limited, an Ontario company incorporated for various purposes including land development. The appellant and his wife each owned 35 per cent of the company's shares, with the remainder belonging to their three children. In 1966, the company acquired a 16-acre parcel of land near Guelph with the purpose of subdividing it into residential building lots, but the municipal authorities did not approve the project, which by the summer of 1978 appeared doomed to failure. In 1977, the appellant conceived the idea of having the company build a larger and more luxurious house for him on its land. He and his wife designed the new house and hired a draftsman to prepare the blueprints under their direction. In the fall of 1977, the company entered into a cost-plus building contract for construction of the house, initially estimated to cost approximately $250,000. The house was finished in December 1978, and its final cost amounted to $395,549."