A Canadian corporation ("C&A") paid two dividends to its Canadian-resident parent ("Holdings"), which distributed the same amounts to its U.S.-resident parent ("Products") as distributions of paid-up capital. Boyle J. noted (at para. 21) that there was no dispute that a distribution of stated capital by a Canadian corporation, that did not have a bank account, to its non-resident shareholder had been paid by it through directions in respect of a dividend payable to it by its subsidiary:
Since Holdings did not have a bank account, in each case the amount of Holdings' return of capital to Products was distributed electronically from C&A's bank account directly to Products' bank account. There was no dispute that C&A was acting as Holdings' agent in this regard with satisfactory directions and financial reporting.