The taxpayer’s husband (Mr. White), who had previously been assessed as director of a defunct company for unremitted net GST and source deductions, deposited over a one-year period, $89,806.72 to a joint bank account of him and the taxpayer. During that period, amounts were transferred from the joint bank account to the taxpayer’s own bank account, which the taxpayer used to pay family expenses. The remaining amounts in the joint account were then garnished by a third party to pay off a debt of Mr. White. The taxpayer was assessed under ITA s. 160 and ETA s. 325 on the basis that her husband’s pay deposits to their joint account constituted “transfers” of “property, directly or indirectly” to her for purposes of those provisions.
In finding that the such deposits were not such transfers, D’Arcy J stated (at paras 28-30:
In my view, applying Fasken Estate, the mere placing of funds in a joint bank account does not constitute a transfer. Mr. White did not divest himself of the funds when he deposited them into the Joint Bank Account. He continued to have full access to the funds in the account. …
… Mr. White did not defeat or in any way hinder the Minister’s efforts to collect any tax he owed by placing his remuneration in the Joint Bank Account. The Minister could have taken collection action with respect to funds in the Joint Bank Account. …
Once the funds were placed in the Joint Bank Account, the Appellant had the ability to effect a transfer; however, such transfer did not occur until the Appellant removed the funds from the account.
D’Arcy J went on to find that $34,052 had been transferred from the joint account into the taxpayer’s own bank account during the relevant period, so that the assessment under s. 325 was confirmed to that extent, with the s. 160 assessment being vacated.