At the time of death of the deceased, a director of his family business corporation, he was under investigation by the Department of National Revenue for having misappropriated sums from the company (namely, proceeds of sales made by the company to customers). Three years later, the Department determined that the misappropriated sums amounted to $183,507.99. The matter was settled on the basis that the corporation would be assessed to include this sums in its income, and the estate would not be assessed for a shareholder benefit provided that it repaid this sum to the corporation.
Lacroix J. found that this sum could be deducted in determining the net assets of the estate for estate tax purposes on the basis that it was a debt owing by him to the corporation at the time of his death, i.e., (quoting Beament Estate v. MNR) it was "a sum payable in respect of [a] liquidated money demand, recoverable by action" by the corporation at that time. He stated (at p. 5093) that "the assessments made by the Department of National Revenue established that there were amounts owing to the company" and (at p. 5094) that there was "a 'money demand' that the company was entitled to require from Joseph Lorenzo Guay, or his estate," and "the amount of this money demand was liquidated by the Department itself and set at $183,507.99."