After the taxpayer had, for some time, been disposing of apartments suites which it held under a headlease by way of assignment rather than a sublease, it realized that a sublease would give rise to a more favourable income tax result (by accessing the reserve under s. 20(1)(m)). Accordingly, it entered into modification agreements with the bulk of the assignees under which one day of the term covered by the lease was reserved to the taxpayer, thereby effectively converting the assignment into a sublease. When the provincial Land Titles Office declined to register the modification agreements, the taxpayer obtained an order of the Supreme Court of British Columbia declaring that the assignments were so modified. The taxpayer then registered the court-approved modifications and a further 49 modification agreements were registered after the court order without the necessity of an application to the court.
Bowman T.C.J. found that the Dale decision applied to make the court-approved modification agreements effective ab initio but concluded at p. 451 (with respect to the remaining 49 modification agreements) that "it would be pushing the Dale principle too far if I applied it to contractually agreed fiscal revisionism without the benefit of a court order".