Each appellant (along with 600 other taxpayers over several taxation years in the 1980's) bought units in a limited partnership. Each of the 36 limited partnerships was to acquire a large yacht to be used for catered vacation charters. The general partner ("OCGC") engaged in marketing activities and purchased a smaller yacht to be used for the provisioning of supplies to the envisaged fleet, and belatedly bought two more yachts, although none of the yachts was acquired by any particular partnership (paras. 348, 402). The capital raised was grossly insufficient for accomplishing the marketed objectives. Rossiter ACJ found (at para. 113, see also paras. 280, 261, 352) that "any yacht building and charter development efforts by OCGC and its related companies were mere window-dressing [to induce further investments]" and characterized the arrangements as a "Ponzi-like scheme [which] was set to collapse eventually" (para. 344, see also 356).
In finding that "the Limited Partnerships were not genuine partnerships" (para. 382), Rossiter ACJ found (at para. 383) that "there was no ‘business carried on' [as] there was merely a fraud," that there was no business "in common" ("how could there be a meeting of the minds when the foundation of the scheme is fraudulent yet the investors are not aware of or are ignorant of the fraud perpetuated on them" (para. 384), and that there was no "view to profit" as the principal of the general partner "had the intention to profit at the expense of the Limited Partnerships" (para. 385).