In order to help her friend (Davies) defeat efforts of CRA to collect unpaid taxes from Davies, the taxpayer opened up a bank account in the taxpayer's own name to which Davies deposited funds from time to time and from which Davies from time to time withdrew funds to pay Davies' expenses
Without discussion of the issue of factual arm's length dealing, the Court found that s.160(1), whose application to the taxpayer depended upon there having been a transfer to her from a person with whom she was not dealing at arm's length, so applied to the taxpayer.