At the same time as the taxpayer and his brother purchased the remaining 50% of the common shares of a road-paving company in financial difficulty ("Paving"), they purchased book debts owing to shareholders controlled by the vending shareholders for $70,000, which was approximately 1/9 of their face amount.
Urie J.A. affirmed the finding of the trial judge that the purchase of these book debts had the desired purpose of reaping over $600,000, perhaps tax free, if the Paving venture went well. Accordingly, the book debts were purchased as an adventure in the nature of trade rather than as an investment.