What world does the CRA live in that it could think it would be a good idea to take a 78-year-old woman to Court under section 160 for cashing cheques for her disabled son? See Gambino v. The Queen, 2008 TCC 601.
It turns out the Crown believed that, in light of The Queen v. Livingston, 2008 FCA 89, “even a transfer of legal ownership without beneficial ownership will render the transferee liable under section 160 for the entire value of the property” (at ¶15). The Court responded:
[30] The Minister’s position is completely lacking in common sense. Its obvious fallacy is that the Minister could make the same arguments against Mrs. Gambino even if her son had used the cash to pay CRA to reduce his tax debt. Even more ridiculous is that the Crown’s technical arguments could be advanced had Mrs. Gambino’s son given her his endorsed Manulife cheques and asked her to walk them to the CRA taxation office and credit the amounts towards his much larger tax liability.
[31] I accept that Mrs. Gambino intended to and did oblige herself to bring the cash from the cashed cheques promptly back to her son. I also accept that Mrs. Gambino intended for her son to repay the $500 she had loaned him. I accept that she did not understand her son was intending to make a gift to her of any of the amounts. I am satisfied that there was consideration as that term is used in section 160 for all amounts that briefly passed through her hands. I am also satisfied that her commitment to do that, or in any event, her actually doing that, was at the time of the transfer of the endorsed cheques to her.
[…]
[34] I must close by expressing my strong disappointment that the government pursued Mrs. Gambino through to a trial. The government’s position makes no sense. While her son’s tax debt may remain unpaid, there is nothing she did that in any way contributed to that.
On the other hand, why would a taxpayer think that he can claim losses on some trades in securities and gains on other in the same taxation year? See Richer c. La Reine, 2008 CCI 547.
