Woods, J. rejected a submission of the Crown that it would have represented an abuse of the Canada-Barbados Income Tax Convention to use the gains exemption in Article XIV(4) to avoid an anti-avoidance rule such as s. 94 of the Act (after noting that in the OECD Commentary, the OECD indicated that contracting states may need to explicitly provide in income tax conventions for the preservation of the right to apply domestic anti-avoidance provisions).
She also rejected a submission that it represented an abuse of that Convention to rely on such treaty exemption where the trust in question had very little connection with Barbados. She noted (at para. 381) that such an approach would result in a selective application of the Treaty to residents of Barbados, on the basis of criteria other than residence, and that the object and spirit of the Treaty was that residents of Barbados qualified for exemption.