In order to avoid the application of the pre-1994 version of section 80, debt owing by the taxpayer was sold by a bank (for consideration equal to 2.2% of the total amount owing) to a corporation ("W720") that had similar ownership to the taxpayer.
In finding that the avoidance of the application of section 80 by this transaction did not represent a "misuse". Rothstein J.A. stated (at p. 5028) that:
"If a provision of the Income Tax Act is not used cannot be misused",
and also found that there was no "abuse" stating (at pp. 5028-5029) that:
"We are not satisfied from the references given to us that there is a clear and unambiguous policy that debts that are not legally extinguished are to be treated as if they were."