The taxpayer's common-law partner, in order to circumvent a hold on his account relating to personal financial difficulties, would have the taxpayer deposit the cheques in her account, and then usually transfer the funds to him on the same day. Tardif J. found that these transactions did not effect a "transfer of property" to the taxpayer for the purposes of s. 160(1). Although the Court of Appeal in Livingston held that the mere deposit of funds into another person's bank account constitutes a transfer of property, Tardif J stated (at TCC para. 35):
The fact that an item of property is simply in the possession or control of a third party does not have the effect of removing it from the tax debtor's patrimony. Although the scope of the word "transfer" is broad, a transfer still requires the transferor to meet a condition precedent, namely, to have actually vested the property in the alleged transferee or recipient.
The taxpayer followed her partner's instructions precisely, she rarely held the funds for more than a few hours, and she never had any right to enjoy or dispose of the proceeds (para. 71). Tardif J therefore found that, even if there were a transfer, the taxpayer's behaviour was consistent with a mandatary relationship under civil law, and transfers of property to a mandatary are not transfers of property under s. 160(1).
Noël JA affirmed that Tardif J's decision was correct under civil law, noting in particular that Livingston dealt with common law (FCA para. 30).