Law Times

Law Times • sepTember 17, 2018 Page 15 www.lawtimesnews.com did not have any jurisdiction to investigate alleged criminal ac- tivity or to order that investiga- tion be conducted. Where person had been victim of alleged crime, person should report incident to police. Applicant alleged that she has been victim of cyber hack- ing continually since 2006, but she did not explain whether she had reported to police extensive allegations she now made. It was not court's role to direct criminal investigation. Underlying appli- cation for judicial review should proceed as soon as possible, and new timetable was established. Theaker v. Canada (Justice) (2018), 2018 CarswellNat 3537, 2018 CarswellNat 3692, 2018 FC 662, 2018 CF 662, Catherine M. Kane J. (F.C.). Tax INCOME TAX Administration and enforcement Minister's review was selective and made without regard to some of information before her Taxpayer was 70-year-old reg- istered nurse who received pen- sion and who looked after her husband and daughter, both of whom were persons living with disabilities. In 2012, taxpayer filed her taxes late and did not include her "T4A – Statement of Pension, Retirement Annuity and Other Income" when filing. Canada Revenue Agency (CRA) reassessed taxpayer's 2012 return to include unreported income for that year and levied penal- ties. Taxpayer applied for can- cellation of penalties. Taxpayer's wages began to be garnished in order to recover debt. On first- level review, request for taxpayer relief was rejected and taxpayer's reapplication for relief was later rejected. Taxpayer paid balance of $13,962.02 owing on her account in full. Taxpayer requested review of Minister's decision to deny re- quest for taxpayer relief. Request granted. Minister's review was selective and made without re- gard to some of information be- fore her. Second-level report did not appear to take into account that taxpayer cleared her entire debt to CRA and said nothing of taxpayer's hardship submissions. Had Minister considered totality of taxpayer's evidence, it was pos- sible that she could have arrived at different conclusion. Minister committed reviewable error that should be rectified upon redeter- mination. Shantakumar v. Canada (Attorney General) (2018), 2018 CarswellNat 3665, 2018 Car- swellNat 3737, 2018 FC 677, 2018 CF 677, Shirzad Ahmed J. (F.C.). Tax Court of Canada Tax INCOME TAX Corporations Father did not transfer property to taxpayer by working for no consideration Taxpayer corporation was in- corporated by three lawyers, fa- ther and two daughters. Almost decade later, Minister assessed taxpayer for over $2 million and assessment was premised on as- sumption that father had trans- ferred property worth more than $3 million to taxpayer for little or not consideration. Tax- payer appealed. Appeal allowed. It was found that father was ei- ther employed by taxpayer for no salary or worked for taxpayer as volunteer. Father provided services to taxpayer's clients on behalf of taxpayer and fact that he chose to do so for no consid- eration did not change nature of his relationship with taxpayer. Nothing employee provided to firm could be described as prop- erty, because employee provides services, not property. If father and taxpayer had agreed that father would be paid and had father later waived that right, fa- ther could have been said to have transferred property, for exam- ple, salary receivable, to taxpay- er. As it was found that father did not transfer property to taxpayer by working for no consideration, appeal was allowed and assess- ment was vacated. Aitchison Professional Cor- poration v. The Queen (2018), 2018 CarswellNat 3675, 2018 TCC 131, David E. Graham J. (T.C.C. [General Procedure]). INCOME TAX Employment income There was no consensus that Torah education to children was, in and of itself, spiritual act Taxpayers were ordained rab- bis who taught Judaic studies to children at Orthodox Jewish el- ementary day school. Taxpayers claimed clergy residence deduc- tion in their income tax returns for 2011, 2012 and 2013 years. Minister of National Revenue denied deductions on basis that taxpayers were not minister- ing to congregation pursuant to s. 8(1)(c)(ii) of Income Tax Act. Taxpayers appealed. Appeals dismissed. Taxpayers satisfied first part of test as they were members of clergy or religious order or regular denomination but did not satisfy second part of "ministering to congrega- tion" in s. 8(1)(c)(ii) of Act. Tax- payers' role in teaching Judaic studies did not constitute "min- istering". Prior case narrowed scope of "ministering" by spe- cifically carving out exception pertaining to full-time teachers of religious studies. Taxpayers were hired as teachers to teach children about Torah and Or- thodox Judaism, which did not represent specialized ministry. There was no consensus that Torah education to children was in and of itself spiritual act and that its religious dimension out- weighed academic dimension. Even if taxpayers' activities did constitute "ministering", class of elementary school students gathered for Jewish religious ed- ucation was not "congregation" within s. 8(1)(c)(ii) of Act as Jew- ish elementary day school was not place of worship and stu- dents were not there for purpos- es of religious worship. Taxpay- ers were encouraged to provide spiritual leadership but were not expected or obligated to engage in outreach activities that would involve use of their residence. While taxpayers may have min- istered to congregation of wider Jewish community, they did not earn employment income from those activities and were not en- titled to deduction. Lichtman v. R. (2017), 2017 CarswellNat 7304, 2017 Car- swellNat 8488, 2017 TCC 252, 2017 CCI 252, Diane Campbell J. (T.C.C. [Informal Procedure]). Ontario Civil Cases Civil Practice and Procedure PLEADINGS Application to strike Possible for company to demonstrate that city's failure to issue permits contributed to nuisance Plaintiff company owned and operated bridge, which connect- ed Canada and United States. Canadian portion of bridge was within defendant municipality. Company bought property near bridge, for future expansion or replacement. Residents of neigh- bourhood complained that purchased properties were va- cated or boarded up. Residents brought actions in nuisance against company. Company brought actions for contribution and indemnity from city. City claimed that company had no reasonable cause of action, and that action was frivolous and vexatious. City applied to strike pleadings of company. Applica- tion dismissed. Company was to amend pleadings. It was possible for company to demonstrate at trial that city's failure to issue permits contributed to nuisance. Cause of action was somewhat novel, but this was not bar to proceeding with cause of action. Interpretation of applicable law by company was reasonable, in- cluding on issue of jurisdiction. There was possibility of joint and several liability. Facts of claim as to misfeasance in public office had been partially pleaded by company. Canadian Transit Company v. City of Windsor (2018), 2018 CarswellOnt 11683, 2018 ONSC 3812, Christopher M. Bondy J. (Ont. S.C.J.). SERVICE OF ORIGINATING PROCESS Statement of claim Insured provided explanation for failure to serve notice of action and statement of claim on time Extension of time. Insured suf- fered water damage and imme- diately notified insurer of loss. Insurer attended premises to as- sess loss, requested documents from insured and advised of one-year limitation period. In- sured brought motion for order extending time for service of notice of action and statement of claim nunc pro tunc. Motion granted. Insured provided expla- nation for failure to serve notice of action and statement of claim on time. Insured explained it did not want to upset settlement negotiations, and there was in- advertence in counsel's failure to diarize or enter dates in tickler system. Insured rebutted pre- sumption of prejudice because delay in serving originating pro- cess was only two months, and insured had access to property early on and had resolved con- tents claim. Outstanding equip- ment and business interruption claim was founded largely on documents, which were still available. There was no evidence insurer was prejudiced by delay. Bargain Club Inc. v. Co- Operators General Insurance Company (2018), 2018 Carswel- lOnt 11310, 2018 ONSC 3402, Trimble J. (Ont. S.C.J.). Construction Law CONSTRUCTION AND BUILDERS' LIENS Practice on enforcement of lien Original project contained in architectural drawings was substantially altered Defendants, incorporated medi- cal practice and principal, con- struction management contrac- tor, to build one-stop type of medical facility. Parties never ex- ecuted stipulated price contract but entered into arrangement for plaintiff 1 to proceed with project and agreed to contract price of $2,652,464.85. Proposed period for completion of project was 22 weeks but no final com- pletion date was agreed upon and almost from beginning there were unanticipated delays due to defendants or defendants' representatives failures to decide on millwork, design and layout changes. Defendants also asked for changes to project, some- times after significant work had already been done. Shortly af- terward, architects issued report that declared project substantial- ly complete and plaintiff 1 deliv- ered demand for payment, which included unresolved project ex- tras in amount of $1,210,256.80 and included unresolved project extras that involved additional labour and material which to- talled $513,583.52. Plaintiff 1 brought claim for amount for extras that remained owing on construction project. Plaintiff 1 awarded $508,333.76 for extras that was included in total award of $888,335.11. It was found that extras were substantially dif- ferent from and wholly outside scope of work contemplated by contract, which was derived from very detailed architects' drawings. Evidence made it clear that original project contained in architectural drawings was sub- stantially altered, mostly as result of decisions and directions from defendants or its representatives. It was found highly unlikely that plaintiff 1 would proceed to en- gage in services and incur charg- es of subtrades on mere whim or misunderstanding. Rather it was found that defendants' consent to extra work was either explicit- ly or implicitly obtained through directions or discussions which accompanied or followed request design and project changes. Proxema v. Birock (2018), 2018 CarswellOnt 6909, 2018 ONSC 2553, McCarthy J. (Ont. S.C.J.). Family Law COSTS In family law proceedings generally Father entitled to costs of procedural and substantive motions on substantial indemnity basis Parties had one child who pri- marily resided with mother. Both parties claimed to be in dire fi- nancial circumstances, and each party accused other of causing business they jointly owned to fail. Mother's motion for relief, including interim sole custody of child and interim child and spou- sal support, was granted in part. While it was reasonable for child to continue to primarily reside with mother, she was not granted interim sole custody. Father was ordered to pay interim child sup- port of $113.92 per month, but no interim spousal support was ordered. Father sought costs of $4,000 on substantial indemnity basis. Father awarded costs of $3,880. Father was largely suc- cessful in his response to relief sought by mother, who volun- tarily rejected continued pay- ment of child support and father's contribution towards s. 7 expens- es. He was entitled to his costs of both procedural and substantive motions. Issue of child support, while important to parties, was not particularly complex, but fa- ther relied on what alleged unrea- sonable behaviour on mother's part. Father was ordered to pay child support in amount signifi- cantly less than he was willing to continue to pay on voluntary basis and/or in accordance with draft minutes of settlement. In all of circumstances, father was entitled to his costs of procedural and substantive motions on sub- stantial indemnity basis. Hourly rate of father's counsel, counsel fee for procedural motion, time spent in client communication and in preparation for motion, and counsel fee requested were reasonable when considered on full indemnity basis. Reason- able substantial indemnity costs were $3,880. Father was awarded $3,880, to be paid out of mother's share of $150,000 proceeds from sale of matrimonial home. Szonyi v. Szonyi (2017), 2017 CarswellOnt 5131, 2017 ONSC 2171, Sylvia Corthorn J. (Ont. S.C.J.); additional reasons (2016), 2016 CarswellOnt 16684, 2016 ONSC 6661, Sylvia Corthorn J. (Ont. S.C.J.). CASELAW

• Cover