The taxpayer, which at the relevant times operated a ranch and was a real estate developer, acquired, in an arm's length transaction, another BC company ("860") that operated a parking lot. Following the transfer of the parking lot to the creditor of 860 and an amalgamation of the taxpayer and 860 about two months later, the amalgamated corporation sought to deduct the losses of 860 from income of its real estate development business. In dismissing the Crown's appeal, Strayer J.A. stated (at pp. 5207-8):
"In the present case the learned trial judge was faced with a generic type of business, namely real estate development, and it was open to him to conclude that such business had not disappeared. It was also open to him to conclude that a period of inactivity of two months was not enough to demonstrate the end of such a business ... ."