Business losses and investment tax credits allocated to an accountant ("Maege") and chemical engineer ("Jevremovic") by an alleged partnership were disallowed by the Minister on the grounds inter alia that their investments in the partnership were a tax shelter. Maege admittedly was a "promoter" as she had made "statements or representations" about losses and credits available to investors (such as Jevremovic) in offering memoranda.
In rejecting a submission made on behalf of both taxpayers that their decision to invest was not made on the basis of statements or representations but, instead, was based on the quality of the project, Noël J.A. stated (at para. 4) that he agreed with Rip J. (as he then was) in the Tax Court "that the existence of a tax shelter does not depend on the motivation of the investor, but rather on the equation provided for in section 237.1".
Furthermore, the submission on behalf of Maege, that although she was a promoter, no statement had been made to her, was rejected. Noël J.A. agreed with Rip J. (who had found that it was irrelevant that Maege had not made any statements to herself) and stated (at para. 5) that "what is relevant is that she knew that beneficial tax consequences would arise as a result of her investment, as had been announced [by her]".