After quoting (at para.55) the statement in Sattva that “While the surrounding circumstances are relied upon in the interpretive process, courts cannot use them to deviate from the text such that the court effectively creates a new agreement,” Owen J found that, contrary to the taxpayer’s understanding of the arrangements as reflected in its financial statements, the arrangements at issue had not in fact been structured so as to give rise to a debt owing to the taxpayer by a corporation that subsequently became bankrupt – so that the taxpayer’s claim for a business investment loss was properly denied. Before, so concluding, he stated (at para. 66):
For a debt to be incurred, there must be an obligation to pay the amount of the debt. This is consistent with the most common definition of the word “debt”, which is “an obligation to pay a sum certain or a sum readily reducible to a certainty” [citing R.B. Dunlop, Creditor-Debtor Law in Canada, 2nd ed. (Toronto: Carswell, 1995) at page 16. Halsbury’s Laws of Canada].