The plaintiffs, two numbered companies acting as financing vehicles for tax shelter schemes, sued the defendant investor for repayment of $6.29 million in loans.
The defendant argued that the loans were satisfied by preferred shares held in trust and that claims for earlier loans were statute-barred.
The court found that the claims for the earlier loans were out of time as the limitation period commenced when the loans matured or were demanded by the tax shelter's operating company acting as the plaintiffs' agent.
Furthermore, the court held that the preferred shares were intended to repay the loans.
The action and the defendant's counterclaim were dismissed.
