Law Times

Page 18 September 3, 2018 • Law timeS www.lawtimesnews.com refused to exercise discretion in s. 220(3.1) of Income Tax Act to cancel or waive remaining inter- est and penalties although it did waive some penalties and inter- est. Taxpayer brought applica- tion for judicial review of CRA's decision. Application dismissed. Additional evidence tendered by taxpayer did not add any- thing new. CRA's decision was reasonable, balanced and proce- durally fair. CRA took account of taxpayer's difficult circum- stances in some periods but bal- anced that consideration with taxpayer's ability to take out further loan and to lease cars, which suggested that taxpayer's post-traumatic stress disorder (PTSD) was not so severe that he was unable to pay his tax debt. For periods when taxpayer's PTSD was severe, tax relief was granted. Norris v. Canada (Attorney General) (2018), 2018 Carswell- Nat 1, 2018 CarswellNat 6, 2018 FC 1, 2018 CF 1, Michael L. Phel- an J. (F.C.). Tax Court of Canada Tax INCOME TAX Administration and enforcement Real estate agent grossly negligent in not reporting profit from sale of condo Taxpayer C was real estate agent and grandmother of taxpayer D. C and D signed contracts of pur- chase and sale to acquire condos in 2006, purchases closed in 2010 and both condos were sold within months. Neither C nor D reported any income relating to condo on her 2010 tax return. Minister of National Revenue reassessed D's tax year on ba- sis that she had failed to report business income of $106,025 on sale of condo, reassessed C's tax year on basis that she had failed to report business income of $103,206 on sale of condo and assessed gross negligence pen- alties against both. Taxpayers appealed. Appeal by D allowed and appeal by C dismissed. C was grossly negligent in not re- porting her profit. When C filed her tax return, she had been real estate agent for 23 years, and it was not believed that she was unaware that profits made selling real estate that was not one's principal residence were taxable. C's unreported income was more than five times higher that reported taxable income on her tax return. D was not grossly negligent and her appeal was al- lowed on this ground. D was 17 when she signed contract of purchase and sale and 21 when sale occurred. D simply signed documents that her grand- mother and father asked her to sign and did not receive any of profit from sale. It was reason- able for D to rely on her grand- mother and father to tell her if she needed to report income on her tax return. DaCosta v. The Queen (2017), 2017 CarswellNat 7652, 2017 TCC 235, David E. Gra- ham J. (T.C.C.). In GAAR appeal, draft documents inform Minister's mental process leading to assessment and understanding of policy at issue MPW Inc., 107 Inc., and MPP Inc. were part of same corporate group (companies). Companies' predecessors had unused non- capital losses, net capital losses, scientific research and experi- mental development expenses and / or investment tax credits ("tax attributes"). Predecessors engaged in two separate but similar series of transactions in respect of tax attributes. MPP Inc. appealed in respect of taxa- tion years ending in 2009, 2011 and 2013 and relating to series of transactions that occurred in 1998, appeal by MPW Inc. was in respect of taxation year end- ing in 2008 and appeal by 107 Inc. was in respect of taxation years ending in 2008, 2009 and 2010. MPW Inc. and 107 Inc. ap- peals related to series of transac- tions that took place in 2006. Ex- act mechanisms and entities in- volved in two sets of transactions were different but end result of transactions shared common elements. In filing their income tax returns during years in issue, companies applied some or all of tax attributes to shelter income derived from profitable real es- tate business. MNR reassessed each of companies to deny tax attributes claimed by them and notionally delete any unused tax attributes available for carry- forward. During audit stage of cases, companies' counsel filed access to information request with each of Finance and CRA seeking all written communica- tion for specified time period re- lating to utilization and/or trad- ing of tax losses. Requests were not specific to companies and were made in names of com- panies' counsel. Companies' counsel made subsequent access to information request in name of MPW Inc. for all records re- lating directly or indirectly to MPW Inc. for taxation years ending 2008 and subsequent. Companies' counsel received hundreds of pages of documents in response, and many were fully or partly redacted and compa- nies requested that they be given unredacted version of docu- ments. Companies brought mo- tion for order to compel MNR to produce documents refused at joint examination for discovery and MPP Inc. brought separate motion for similar orders. Mo- tions were heard at same time. MNR ordered to produce docu- ments as directed by court. In GAAR appeal, draft documents prepared in context of taxpay- ers' audit or considered by of- ficials involved in or consulted during audit and assessment of taxpayers should be disclosed as they inform Minister's mental process leading to assessment and may also inform Minister's understanding of policy at issue. MP Western Properties Inc. v. The Queen (2017), 2017 CarswellNat 2356, 2017 Car- swellNat 9456, 2017 TCC 82, 2017 CCI 82, Valerie A. Miller J. (T.C.C. [General Procedure]). Ontario Civil Cases Civil Practice and Procedure PRACTICE ON APPEAL Leave to appeal General importance relates to matters relevant to development of law and administration of justice Respondent property owner brought action against applicant municipality for declaration re- garding permit. Municipality brought motion for summary judgment dismissing property owner's claim. Motion was dis- missed. Municipality brought application for leave to appeal. Leave to appeal refused. Rule 62.02(4)(a) and (b) of Rules of Civil Procedure sets out test that applies for granting leave to ap- peal. To satisfy court that leave to appeal should be granted, applicant need only meet one branch of rule but each branch must be read conjunctively. Un- der R. 62.02(4)(a), applicant first must show that there is conf lict- ing decision by another judge in Ontario or elsewhere on matter involved in proposed appeal. Secondly, applicant must satisfy court that it is desirable that leave to appeal be granted. Judge who exercises his or her discretion when circumstances of case are different than in other jurispru- dence is not necessarily making "conf licting decision". Decision of motions judge is entitled to considerable deference. There- fore, in order to be successful on motion for leave to appeal, it is necessary for applicant to dem- onstrate that there is difference in principles chosen by motion judge as guide to exercise of dis- cretion, and not simply different set of facts leading to different conclusion. Requirements of R. 62.02(4)(a) were not met. Mu- nicipality did not demonstrated that motion judge's decision conf licted with another decision in Ontario or elsewhere, nor had it shown that it was desirable that leave to appeal be granted. Test under R. 62.02(4)(b) con- tains two branches. To succeed, applicant must satisfy court that there is good reason to doubt correctness of motion judge's decision and that appeal raises matters of general importance. Test is whether decision is open to serious debate. It was well within motion judge's discretion to rule that doctrine of res judi- cata did not apply or to find that action commenced by owner was not abuse of process. There was no good reason to doubt correctness of motion judge's decision and municipality failed to show that decision was open to serious debate. For purpose of R. 62.02(4)(b), matters of impor- tance refer to matters of general importance, not matters of par- ticular importance relevant only to litigants. General importance relates to matters of public im- portance and matters relevant to development of law and admin- istration of justice. Matters at is- sue were of great importance to litigants but were not matters of such general public importance that leave to appeal should have been granted. Bodnar v. Thunder Bay (City) (2017), 2017 CarswellOnt 5144, 2017 ONSC 1724, G.P. Smith J. (Ont. S.C.J.); leave to appeal re- fused (2016), 2016 CarswellOnt 14896, 2016 ONSC 5894, W.D. Newton J. (Ont. S.C.J.). PRACTICE ON APPEAL Powers and duties of appellate court Thin-skull principle was inapplicable without other elements of successful damages claim Plaintiff city bus driver claimed that he was injured in work- place accident, while riding bus home from his route. Driver also claimed injury in separate slip and fall accident, while walking to bus route. Driver brought ac- tion against defendant transit authority and driver for first ac- cident. Driver brought second action against defendant city for second accident. Both ac- tions were dismissed. Plaintiff appealed from dismissal of both actions. Appeal dismissed. Vast majority of driver's grounds for appeal were alleged factual er- rors. Trial judge made no pal- pable and overriding errors in findings of fact. Trial judge did not fail to apply thin-skull principle. Thin-skull principle was inapplicable without other elements of successful damages claim. Trial judge made reason- able conclusions based on evi- dence, finding that city was not grossly negligent as required. Zaravellas v. City of Toronto (2018), 2018 CarswellOnt 10636, 2018 ONSC 4047, Morawetz R.S.J., Whitten J., and Gray J. (Ont. Div. Ct.); affirmed (2016), 2016 CarswellOnt 8959, 2016 ONSC 3616, S.A.Q. Akhtar J. (Ont. S.C.J.). TRIALS Jury trial Use of inherent jurisdiction to order separate hearing for one or more issues required consent of parties Bifurcating jury trial. Insureds' vehicle was struck from behind by vehicle owned by motorist but driven by her son, allegedly without her consent. Insureds brought action against motorist and son for damages for neg- ligence and against insurer for uninsured motorist coverage. Motorist and insurer delivered jury notices, but insurer wished to separate issue of consent from damages determination. Insurer brought motion for, among oth- er things, order bifurcating jury trial. Motion dismissed. Court had no jurisdiction to bifurcate jury trial. Appellate authority indicated there was no jurisdic- tion to order bifurcation in jury trial unless all parties consented. Majority in Divisional Court authority held use of R. 6.1.01 of Rules of Civil Procedure to order separate hearing for one or more issues required consent of par- ties. Insurer made compelling policy-based argument in sup- port of use of court's inherent ju- risdiction to control its process allowing it to bifurcate even jury trials without consent of all par- ties, but prior authorities were binding. Jurisprudence to date favoured right of party to insist on single trial, and particularly single jury trial, over efficiency of process and related access to justice benefits. Robichaud et al v. Constan- tinidis et al (2018), 2018 Carswel- lOnt 10995, 2018 ONSC 4204, J.T. Akbarali J. (Ont. S.C.J.). Criminal Law CONSTITUTIONAL AUTHORITY Prosecutorial responsibility Crown attorneys enjoy immunity from civil suit in negligence arising from exercise of official functions Plaintiff was subjected to "Mr. Big" operation, in course of which he confessed murder to undercover police officer. Plain- tiff was charged with first degree murder but was acquitted after confessions were excluded from evidence. Plaintiff brought ac- tion against provincial Crown and three Crown attorneys ("Crown defendants") for negli- gence in providing police with legal advice, other torts, and breaches of Canadian Charter of Rights and Freedoms, and against police defendants for negligent investigation and other torts. Police defendants cross- claimed for indemnity against Crown defendants, who brought motion to strike action and crossclaim. Action was struck, but not crossclaim. Appeal by Crown defendants allowed. Mo- tion judge erred in refusing to strike crossclaim on basis that it was not plain and obvious that common law prosecutorial im- munity applied. Given existing appellate authority on prosecu- torial immunity, nature of claim in negligence, and policy consid- erations, it was plain and obvious that defendants' claim would fail. Based on current legal authority, it is clear that Crown attorneys enjoy immunity from civil suit in negligence arising from ex- ercise of their official functions unless they act with malice or intentionally breach accused's Charter right to disclosure. There was no policy concern that public confidence in administra- tion of justice would be eroded if Crown attorneys were not held liable in negligence because they made mistakes in providing legal advice. It was plain and obvious that crossclaim of police de- fendants' would fail because of common law prosecutorial im- CASELAW

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