The taxpayer was a trustee for a family trust, which received a dividend in 2001 of over $2 million. The trust adopted an unconditional resolution on 11 September 2001 to pay (i.e., distribute) the dividend to the non-resident capital beneficiary, with the beneficiary having the right to require payment to himself at any time. The taxpayer then resigned as a trustee on 12 January 2002 and the beneficiary was paid on 18 January 2002. The trust failed to withhold and remit the 25% Part XIII tax.
After finding that the taxpayer was not liable under s. 215(6) for the failure to remit at the time of the resolution as the distribution amount had not been "credited" (or paid) at that time, he went on to reject a submission that the taxpayer was liable under s. 227(5) because he authorized the payment of the dividend distribution. The resolution created an obligation to pay the amount but did not authorize its payment, which did not occur until the taxpayer had ceased to be a trustee.