series of transactions

Owen J found (at para. 704) that the concept of a “series” under s. 247(2) should be interpreted narrowly, stating:

To allow for a meaningful comparative or substitutive analysis, the transaction or the series identified in the preamble must be susceptible of such an analysis. An overly broad series renders the analysis required by the transfer pricing rules impractical or even impossible by unduly narrowing (possibly to zero) the set of comparable circumstances and substitutable terms and conditions.

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.

Rothstein JA found that transactions that had the effect of transferring properties with accrued losses to a partnership were a “common law” series, which he defined (at para. 24) as follows:

Lord Jauncey stated:

"If it were appropriate to prepare a formula defining 'composite transaction' in the light of the passages in the speeches in Ramsay, Burmah and Dawson to which I have referred I should be tempted to suggest the following: