The taxpayer, a family trust, made a non-arm's-length sale of shares to a numbered corporation ("404") for a promissory note of approximately $2.6 million. The numbered corporation then immediately sold the shares at arm's length to a third party ("Keolis") for approximately $2.8 million. The lower sale price on the first transfer reflected that it had been determined that 404 would bear the cost of professional fees, relating to the structuring of the sale to Keolis, of $233,786. In finding that the $233,786 was a deemed dividend received by the taxpayer by operation of s. 84.1(1)(b), Archambault J. stated (at para. 15):
I can understand that in his testimony, the tax consultant whose services the Gaunthier family retained contended that the market value had to be $6,010 [per share] in order to take account of the fact that 404 was to pay the $233,786 in fees. However, in my opinion, it more accurately reflects reality to say that Fiducie transferred 433 shares whose unit market value was $6,550, that the actual selling price of those shares was $2,836,423 (433 × $6550), an amount which, in fact, 404 obtained when it resold the shares to Keolis, and that the consideration given for this market value of $2,836,423 included two elements: a $2,602,637 promissory note, and 404's agreement to pay fees that Fiducie would have had to pay if 404 had not been interposed in the series of transactions carried out to sell the shares in question to Keolis.