The wholly-owned Canadian subsidiary of the taxpayer declared a dividend on its shares, with the resolution stipulating that the dividend was to be payable "by the issuance of a demand promissory note".
The Court found that the Tax Court Judge had erred in finding that the dividend was includable in the income of the taxpayer in the year of declaration on the basis that the taxpayer was required to compute its income on an accrual basis: "The clear result of the combined operation of paragraph 12(1)(j) and clause 82(1)(a)(ii)(A) of the Income Tax Act is that such dividends are taxable only when received, not when they are merely receivable."