The two sons of the taxpayer had transferred to him shares of a family corporation. The shareholders' agreement provided that, on the death of a shareholder, his shares were deemed to have been redeemed by the company on the day preceding that of death.
After affirming the finding of the Tax Court Judge that the deemed redemption provisions in the agreement did not effect a retroactive disposition of the shares the day before the taxpayer's death, the Court indicated that it was not persuaded that the sale of the shares to the taxpayer was void for a mistake because the sale did not have one of its intended tax consequences.
Evans J.A. stated (at p. 5241):
"The mistake of law concerning the tax consequences of the redemption provision in the shareholders' agreement was not such as to render the contract, and hence the transfer, null and void from the beginning."