http://decision.tcc-cci.gc.ca/tcc-cci/decisions/en/item/144658/index.do
Connolly v. The Queen (June 2, 2016 – 2016 TCC 139, Favreau J.).
Précis: Ms. Connolly was assessed under subsection 160(1) for $76,884.17 in respect of cheques she received from her common-law partner, Mr. Wayne MacVicar, while he had a tax debt in the amount of no less than $76,884.17 in respect of his 2000 taxation year. The Tax Court reviewed the evidence and concluded that Ms. Connolly met the evidentiary onus of establishing that she had given consideration for the funds she received from Mr. MacVicar in the form of various loans and payments made by her in prior years. As a result her appeal was allowed with costs.
Decision: This case turned entirely on the evidence adduced on behalf of Ms. Connolly which was accepted by the Court:
[31] The appellant appeared to me as a highly credible witness that, unfortunately, had a conjugal relationship with a recurrent tax debtor. Throughout the 2002 and 2003 taxation years, in order to overcome Mr. MacVicar’s financial difficulties, they agreed that she would advance him the money he needed for his two businesses and for his personal expenses. The evidence revealed that, during those years, the appellant had effectively advanced funds to Mr. MacVicar for both businesses and for his personal expenses.
[32] Under the terms of the verbal agreement, he had the legal obligation to reimburse her whenever he would have money available and which he did during the Period.
[33] In my opinion, the appellant gave consideration in exchange for the transfer of property from her common-law partner. The considerations were in the form of advances and loans for his painting business’ payroll, rent and his miscellaneous businesses and personal expenses.
…
[42] I am satisfied from the evidence before me that the appellant gave adequate consideration for the transfers received as she had:
(a) advanced, between January 1, 2002 and September 5, 2003, the aggregate sum of $67,329.05 to Mr. MacVicar for the purpose of paying his painting business’ employees;
(b) paid the amounts of $3,150 and $9,058.50 respectively for the purchase of Truck #1 and Truck #2 between January 1, 2002 and October 31, 2003, which were both used strictly by Mr. MacVicar for the purpose of his painting business;
and that the sum of these amounts ($79,537.55) exceeds the sum of amounts received from Mr. MacVicar during the Period ($76,884.17) for which she was assessed under subsection 160(1) of the Act.
As a consequence the appeal was allowed with costs.