The taxpayer was formed on amalgamation, and purported to avoid the application of s. 87 by causing some of its property to be transferred to a numbered corporation simultaneously with the amalgamation (so that it did not possess "all of the property" of its predecessors, as required by s. 87).
In the course of finding that this attempt failed, Rothstein J rejected a "tracing" approach of the Court of Appeal which, in effect, treated the shares of the numbered company as being the same as the surplus properties. He stated (at para. 57):
It is a basic rule of company law that shareholders do not own the assets of the company: see, e.g., Wotherspoon v. Canadian Pacific Ltd., [1987] 1 S.C.R. 952, at p. 1033.