The taxpayer was reassessed in respect of income from stock options exercised in 1997, 1999, and in 2001. He argued that he was not a Canadian resident in those years.
V.A. Miller J. accepted the taxpayer's argument only in respect of 1997, when he was employed in China, sold his house in Canada (but kept his cottage in Belleville, Ontario), and maintained a lease in a Chinese hotel suite, where he lived with his wife during his employment period. (The taxpayer's appeal for 1997 was nevertheless dismissed pursuant to 115(1)(a)(i) because he received the stock options in the course of employment in Canada.) The taxpayer's employment in China was terminated and the taxpayer moved back to his Belleville estate for over a year.
The taxpayer was a Canadian resident in 1999 and 2001, and V.A. Miller J. found that his assertions to the contrary amounted to willful neglect, for which he was liable for 50% penalties under s. 163(2). The taxpayer's severing of his ties to Canada was superficial - he ostensibly sold the Belleville estate to his children in exchange for a mortgage, but never actually requested payment from them. The core of his social and family life, as well as his finances, remained in Canada, and his personal investment in China, and subsequently Thailand, was only enough to maintain a particular lifestyle during his periodic sojourns there.