MacGuigan,
J.A.
(Heald
and
Linden,
JJ.A.,
concurring):—We
are
all
agreed
that
the
decisions
of
Pinard,
J.
at
trial
in
these
four
related
cases
should
be
upheld.
There
may
be
exceptional
circumstances
in
which
it
may
be
appropriate
to
allow
a
taxpayer
to
deduct
interest
on
funds
borrowed
for
an
ineligible
use
because
of
an
indirect
effect
on
its
income-earning
capacity:
The
Queen
v.
Phyllis
Barbara
Bronfman
Trust,
[1987]
1
C.T.C.
117,
87
D.T.C.
5059
at
page
129
(D.T.C.
5067)
(per
Dickson,
C.J.C.)
and
Canada
v.
Attaie,
[1990]
2
C.T.C.
157,
90
D.T.C.
6413
at
page
161
(D.T.C.
6417)
(per
Desjardins,
J.A.).
However,
in
our
view,
no
such
exceptional
circumstances
are
present
here,
since
the
fact
that
the
transactions
took
the
form
of
an
amalgamation
followed
by
a
redemption
of
shares
has
as
a
consequence
that
they
cannot
now
properly
be
characterized
as
an
acquisition
of
shares
by
the
taxpayer.
The
Court
must
deal
with
what
the
taxpayer
has
in
fact
done,
not
what
it
could
have
done.
The
appeals
must
therefore
be
dismissed
with
costs.
Appeals
dismissed.
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