An exploration company ("Deena") that entered into an agreement styled as a flow-through share agreement with the taxpayer failed to incur any Canadian exploration and development expenses so that its purported renunciation of such expenses was invalid, and went into receivership. The shares issued were found to be prescribed shares in light of a provision in the agreement providing:
"The Corporation hereby agrees to indemnify and save harmless the Subscriber from and against any liability loss, damage or expense which the Subscriber may sustain or incur arising out of or in any way connected with the expenditure of the Subscription Amount."