After affirming a finding that the taxpayers had not become members of a Texan partnership notwithstanding expert evidence that under the laws of Texas the partnership existed, the Court stated (at p. 5156):
"... Where a Canadian taxpayer seeks to deduct a partnership losses through s. 96 of the Act, the taxpayer must satisfy the essential ingredients of a partnership under Canadian law. Even in respect of foreign partnerships, for the purposes of s. 96 of the Act, the essential elements of a partnership that exists under Canadian law must be present. A partnership must be that entity familiar to Canadian law, it must be more than a partnership in name only."
The majority found that the determination of who was a director of a Nova Scotia corporation for purposes of s. 227.1 of the Act should be governed by the provisions of the Companies Act (Nova Scotia).