The taxpayer and eight other managers worked for a business corporation ("Robert Ltd.") owned by an individual ("Robert"). Robert had Robert Ltd.'s assets sold to a 3rd party. The managers continued to work for the business, hired by a subsidiary of the buyer.
Starting a few months later, Robert had Robert Ltd. make alleged gifts to its former managers in several installments over approximately a year. The amount of the gifts was $10,000 per year employed - a total of $140,000 for the taxpayer. A letter from Robert indicated that the bonuses would only be payable if they continued to work for the new employer.
VA Miller J relied on the statement at para. 9 of Blanchard that, because of the breadth of the words "in respect of" in s. 6(1)(a), a benefit from an employer is a taxable benefit unless it is "wholly 'extraneous' or 'collateral' to one's employment." Although the taxpayer emphasized that he had a deep personal friendship with Robert, it was clear that the payments were within the scope of s. 6(1)(a) as posited in Blanchard.
VA Miller J stated (at para. 21):
The fact that the Appellant was not employed by Mr. Robert when he received the Payment does not alter my conclusion. ... Although the taxpayer must be an employee or an officer, it is not necessary that he be the employee or officer of the person who bestowed the benefit at the time the benefit was given: C v Minister of National Revenue, 1950 CarswellNat 33 (TAB). ...