The appellant, a real estate brokerage firm, determined (based on agreement between its two employees) that the remuneration paid to them would be allocated as to $165,000 and $192,000 to Mrs. and Mr. Sutton, respectively. CRA noted that all but $12,675 of such remuneration had been deposited into the bank account of Mr. Sutton, considered that all of such deposits to his account were remuneration received by him, and imposed a late source-deductions remittance penalty under s. 227(9) on the appellant regarding its computed under-remittance.
In finding that Mrs. Sutton had received remuneration in excess of the $12,675 deposited into her account, Gagnon J stated (at paras. 21, 25-26):
Case law has noted that the word “receive” means to get or to derive benefit from something, therefore to “enjoy its advantages without necessarily having it in one’s hands”. Moreover, an amount of money is deemed received by an employee when it is available to the employee. …
… [C]onstructive receipt applies with respect to Mrs. Sutton’s remuneration received from the Appellant.
[A]lthough this Court cannot confirm the exact remuneration received by Mrs. Sutton, and indirectly by Mr. Sutton, it remains clear that the remuneration used by the CRA to assess the penalty is incorrect.
Gagnon J went on to find that because the Crown had not proven its allocation of the remuneration between the Suttons, the penalty should be reversed.