In December 1991 the taxpayers (who were Canadian residents) acquired most of the partnership interests in a partnership ("Klink") that had been formed approximately 12 years earlier and whose principal asset, in December 1991, was an IBM mainframe computer which originally had cost U.S.$3.7 million but which had a current fair market value of $5,000. Klink then transferred the computer to a recently-formed British Columbia limited partnership in consideration for a partnership interest therein.
After finding that it was contrary to the scheme of the capital cost allowance provisions of the Act to permit Klink to recognize a terminal loss based on the original historical cost of the computer, Noël J.A. noted (at p. 7180) that the relevant provisions of the Act nonetheless were clear on this point and that:
Faced with such clarity it would be inappropriate, for the reasons expressed by the Supreme Court in a number of recent decisions to attempt to modify the words of the relevant provisions to provide a result which conforms with their object and spirit ... .