The Queen v. Fording Coal. Ltd., 95 DTC 5672 (FCA)

Before finding that former s. 245(1) applied to deny the deduction of resource pools that otherwise would have been available to the taxpayer because of a "seeding transaction" (i.e., a transfer, prior to its acquisition of resource interests, of a minute interest in the property by it to the vendor), Strayer J.A. noted (at p. 5673) that "these were legal transactions which had the effect of transferring and retransferring interests so as to make possible the claim by the respondent for the deductions".

Strayer J.A. stated (at p. 5673), before finding that former s. 245(1) applied to deny the tax benefit that otherwise should have been obtained from a "seeding transaction":

I do not understand the leading authorities on the interpretation of taxing statutes... although they call for a teleological approach to the interpretation of such statutes, to direct that the object and spirit of the Act are to govern even where the words are clear but not in accord with such object and spirit.... Although I find, for reasons to be discussed later, that such a deduction in these circumstances is contrary to the object and spirit of the sections in questions and of the Act, I do not consider this to be a justification for treating the 'seeding transaction' as of no effect for the purposes of subsections 66.1(4) and 66.2(3).