In the course of the reorganization of the share structure of a Canadian holding company ("PMPL") for a Canadian automotive business, two newly established Barbados trusts for the two principals ("Dunin" and "Garron") of PMPL and/or family members subscribed for shares of newly-incorporated Canadian corporations ("325" and "333") which, in turn, subscribed for common shares of PMPL for nominal consideration. Two years later, the trusts sold shares of 325 and 333 for substantial cash proceeds.
Although the 1998 transactions entailed a transfer of property from the holders of common shares of PMPL to the new common shareholders (the trusts), these transactions did not entail any acquisition of property by the trusts from the former common shareholders. Accordingly, s. 94 did not apply even if the trusts were not resident in Canada.