The taxpayer facilitated a leveraged buy-out of him and his co-shareholder of a company ("Brouillette Automobiles") by incorporating a corporation ("9016") of which he controlled 51% of the voting shares with the balance of the shares being owned by the purchaser corporation ("9017") of which two unrelated individuals were equal shareholders, with 9016 using the proceeds of a loan to it by Brouillette Automobile to purchase for cash the shares of the co-shareholder of Brouillette Automobile, the taxpayer rolling his shares of Brouillette Automobile into 9016 for non-voting shares of 9016 (so that Brouillette Automobile was now a wholly-owned subsidiary of 9016) and then selling his shares of 9016 to 9017 for a promissory note.
Lamarre Proulx J. found that as she had already found that s. 84.1 did not apply to the transaction (because the taxpayer was dealing at arm's length with 9017), s. 245 should not be applied. To do so would be to legislate. Even if s. 245 could be so applied, the transactions were entered into fundamentally for a business or commercial purpose (obtaining the best possible price).