The taxpayer, who was a highly-regarded senior geologist at Imperial Oil, received a lump sum from an indirect major shareholder of Home Oil upon becoming the president and managing director of Home Oil at the same salary as his previous salary at Imperial Oil. The agreement between the shareholder and the taxpayer pursuant to which the payment was made indicated that the sum was paid "in consideration of the loss of pension rights, chances for advancement and opportunities for re-employment in the oil industry, consequent upon the resignation of the [taxpayer] from his present position with Imperial Oil". In finding the sum to be taxable, Kerwin CJ stated (p. 1250):
"It is true that in order to fulfill his obligations under the contracts the appellant was obliged to resign his position with Imperial Oil Limited and thereby gave up not only the annual salary, a like amount which he was to receive, but also his pension rights and further prospects. However, the payment of $250,000 was made for personal service only and that conclusion really disposes of the matter as it is impossible to divide the consideration."