The taxpayers (a husband and wife) were not dealing at arm's length with a corporation ("29061") whose shareholder was a trust of which they and their accountant were the trustees. Although major decisions of the trustees were required to be unanimous, the accountant would never have voted against his clients' wishes, and as a role was essentially passive.
As the sale of shares by the taxpayers 29061 was a non-arm's length transaction, s. 84.1 applied to deem them to receive a dividend on the sale.