The taxpayer's wife ("Jordanna") borrowed $562,500 from the Bank of Montreal under an interest-bearing demand promissory note in order to purchase some of the shares of the a family corporation from the taxpayer for that sum, with the sale proceeds being used by the taxpayer to purchase a family home. The next day, a mortgage loan on the home received from the Bank was used to retire the demand promissory note. The taxpayer did not report a capital gain on the sale of the shares (on the basis that the inter-spousal rollover in subsection 73(1) applied) and included in the computation of his income both the dividends on the shares purchased by Jordanna, and the interest expense incurred by her on the mortgage loan, on the basis that the attribution rules in subsection 74.1(1) applied.
After noting (at para. 47) that in the Canada Trustco case, the Court had confirmed that "the expression 'series of transactions' in section 245 refers to transactions that are 'pre-ordained in order to produce a given result' with 'no practical likelihood that the planned events would not take place in the order ordained'", the Court noted that here the series of transactions comprised those described in the paragraph above together with the following events which were later completed in contemplation of the series, namely, the deduction by Jordanna of interest costs, and the utilization by the taxpayer of the attribution rules.