The taxpayer was the sole shareholder and director of Internorth Limited ("IL") and a majority shareholder and director of Internorth Construction Company ("ICC"). ICC ran a construction business, and IL was incorporated to manage ICC. The minister assessed the taxpayer for unremitted source deductions, in his capacity only as director of IL, in respect of salaries and wages paid to ICC employees. After noting that IL had neither the financial resources nor backing to pay ICC's employees without reimbursement from ICC, Webb J. stated (at para. 51):
Since the Respondent made the assumption that ICC did not reimburse IL, the Appellant did not have to challenge this assumption but could rely on it to dispute the other assumption that IL paid the employees of ICC.
The taxpayer's reliance on this assumption, along with IL's and ICC's financial records which recorded all the salaries as being paid by ICC, led Webb J. to find that the taxpayer had made a prima facie case to demolish the Minister's key assumptions in the case, which the Minister did not subsequently meet the onus of proving.