The taxpayer held 1000 shares in a Bermudan corporation ("Tyco"). In a corporate reorganization, Tyco distributed 250 shares to the taxpayer of its two wholly owned subsidiaries, and consolidated the taxpayer's 1000 shares into 250. The taxpayer was assessed for receiving a dividend in kind.
Rip CJ upheld that the shares distributions were a dividend in kind, as Tyco had failed to file a s. 86.1 election. He stated (at para. 13):
I agree with Mr. Ahmad and his representative that Mr. Ahmad incurred no economic benefit as a result of the Tyco reorganization. However, according to the Act, he did receive dividends in kind from Tyco and the dividends had a value.