The taxpayer was the subsidiary trust of an income fund. As part of a plan of arrangement to in effect replace the income fund by a public corporation ("Seafoods Inc."), the taxpayer was wound-up into the income fund, and the income fund was wound up into Seafoods Inc., in each case, in reliance on the rollover provisions of s. 88(1), as modified by s. 88.1(2). All liabilities of the taxpayer were assumed by the income fund on the taxpayer's winding-up, and it was dissolved; and similarly (it would appear) on the winding-up of the income fund.
D'Arcy J. dismissed the taxpayer's motion to have the appellant in the taxpayer's appeal (which had been filed four months before its winding-up) changed to Seafoods Inc.. (The motion was made under s. 29 of the Rules.) He stated (at paras. 29, 32):
In my view, an agreement by which a party assumes another party's tax liability cannot be binding on the Minister.
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That Seafoods Inc. may now have the legal obligation, as between itself and the Trust, to pay any income tax debt of the Trust does not change the fact that any such debt is still owed by the Trust to the Crown. Further, the assumption/assignment of any such debt does not result in the transfer by the Trust of its rights of appeal in respect of the relevant assessments.
D'Arcy J. declined to decide whether the taxpayer itself could continue the appeal in light of its winding up, because that issue was not before the Court and the evidence was inadequate.