The appellants, husband and wife, were equal shareholders of a corporation that paid them dividends between 1998 and 2013.
The Minister assessed them under section 160 of the Income Tax Act, making them jointly and severally liable for the corporation's tax debt.
The appellants argued that the dividends were part of the compensation for services they provided to the corporation, and thus they gave consideration for the property transferred.
The Tax Court of Canada rejected this argument, following Supreme Court precedent that a dividend is related to shareholding and not to any other consideration.
However, the appeals were allowed in part on consent to reduce the underlying liability to $86,848.04.
