A home purchase loan arrangement was evidenced by a resolution of the corporation authorizing the making of the loan and providing for its repayment in six equal annual instalments without interest. Mr. Taylor found that there was not a bona fide arrangement for a repayment given that no loan agreement or promissory note was signed by the taxpayer for the loan (p. 1638):
"An arrangement is an accord or agreement between parties and where the purpose of that arrangement is the conscious avoidance of income tax otherwise payable, it behooves the parties affected to be meticulous in the extreme ... It is difficult for the Board to accept that an arrangement for repayment of a loan from a shareholder to his personally-held corporation, should be regarded as 'bona fide' when it is less stringent than that which the same shareholder would insist his corporation impose on an unrelated third party."