Law Times

Law Times • OcTOber 29, 2018 Page 15 www.lawtimesnews.com scribed by taxpayer but he had not produced reliable evidence sufficient to demolish Minister's assumptions. Gorev v. The Queen (2017), 2017 CarswellNat 2422, 2017 TCC 85, Don R. Sommerfeldt J. (T.C.C. [General Procedure]). Potential basis for proving taxpayer misrepresentation was due to wilful default or neglect Corporate taxpayer was non- profit organization which oper- ated golf course and it realized gain on disposition of parcel of land in 2006. Taxpayer reported gain on T1044 Non-Profit Or- ganization Information Return, but not on T3 Trust Income Tax, and Minister reassessed taxpay- er in 2015 for not reporting dis- position and gain on its T3. Tax- payer filed notice of objection on basis that taxpayer believed that gain on disposition of land was exempt from taxation. Minis- ter's reassessment was made af- ter normal reassessment period set out in subsection 152(3) of In- come Tax Act and would be stat- ute barred unless Minister could satisfy s. 152(4) of Act, which had to show that taxpayer made mis- representation. In reply to tax- payer's notice of objection, Min- ister sent reply and subsequently amended reply and taxpayer successfully challenged Minis- ter's amended reply motion to strike it for not setting out facts to allow Tax Court of Canada to conclude that taxpayer made misrepresentation. Months later, Minister sent further amended reply to taxpayer to solve defi- ciencies in past reply. Taxpayer brought motion to strike Minis- ter's further amended reply. Mo- tion dismissed. It was found that some paragraphs of Minister's statements in further amended reply suggested potential basis for proving taxpayer misrepre- sentation was due to wilful de- fault or neglect and that taxpayer failed to exercise reasonable care as required to disprove s. 152(4) of Act. In particular, Minister's pleading of facts related to busi- ness experience of taxpayer's directors and their failure to seek professional opinions on tax consequences of disposition of land, and these were facts on basis on which court could con- clude that misrepresentation was attributable to neglect. This countered taxpayer's submission that Minister's further amended reply should be struck for not pleading facts which would al- low court conclude that taxpayer made misrepresentation. Mont-Bruno C.C. Inc. v. R. (2018), 2018 CarswellNat 2724, 2018 TCC 105, Réal Favreau J. (T.C.C. [General Procedure]). INCOME TAX Foreign income Taxpayer not competing in any manner in any international market but basically managed investment portfolio Minister reassessed LF on basis that income earned by its con- trolled foreign affiliate GBL was FAPI as defined under subsection 95(1) of Income Tax Act. LF filed objections. Minister brought mo- tion seeking to prevent LF from relying on Large Corporation Rule or under new definition of foreign bank. Motion dismissed. Broadening of LF's argument to encompass two issues was mi- nor. Taxpayer's appeals allowed in part. Foreign exchange gains/ losses associated more closely with income activity than capital. LF incorrect in not identifying GBL's income as FAPI. Whether GBL sought licence because it was a legal requirement to conduct type of activities it conducted or intended to conduct, or because it believed regulated licenced finan- cial institution would carry more weight in successful investment strategy program, or because it would avoid Canadian FAPI did not detract from fact it was a li- cenced international bank. GBL found to have more than five employees. To overcome lack of arm's length conduct on receipt of funds side of banking business, GBL had to demonstrate on use of funds side little or no conduct of business with non-arm's length persons. GBL unable to do so. Customers were referred by LF to GBL. GBL's business principally with non-arm's length persons so did not qualify for foreign institu- tion exemption. Choice of Bar- bados due to low tax regime may have been tax objective but it was not tax benefit avoidance objec- tive as contemplated by GAAR. While tax benefit arose from incorporation, licencing and investment of funds into GBL, there were bona fide commercial purposes that outweighed FAPI avoidance purpose at each step. As rationale for financial insti- tution exemption grounded in "competition," LF was misusing exemption as it was not compet- ing in any manner in any interna- tional market but basically man- aged investment portfolio for L. Loblaw Financial Holdings Inc. v. The Queen (2018), 2018 CarswellNat 5099, 2018 TCC 182, Campbell J. Miller J. (T.C.C. [General Procedure]). Ontario Civil Cases Administrative Law PREROGATIVE REMEDIES Habeas corpus in civil proceedings Habeas corpus can apply where person challenges deprivation of liberty arising from situation other than being held in custodial facility Foreign nationals (applicants) were arrested in Canada under Immigration and Refugee Pro- tection Act on basis that they had multiple fraudulent identi- ties and were fugitives from Chi- na. While on house arrest, ap- plicants unsuccessfully applied for habeas corpus. Application judge concluded that because applicants were not being held in custody, they were not detained, so writ of habeas corpus could not apply. Applicants appealed. Appeal allowed; application remitted for redetermination. Application judge's conclusion was not supported in case law and did not accord with funda- mental constitutional values un- derlying remedy. Habeas corpus can apply where person seeks to challenge deprivation of liberty that arises from situation other than being held in custodial fa- cility. Where state acts to restrict individual's liberty, individual must have right to seek review of legitimacy of those restrictions. Person subject to house arrest has had their liberty restricted. Wang v. Canada (2018), 2018 CarswellOnt 16199, 2018 ONCA 798, C.W. Hourigan J.A., I.V.B. Nordheimer J.A., and Harvison Young J.A. (Ont. C.A.); reversed (2017), 2017 CarswellOnt 7251, 2017 ONSC 2841, Diamond J. (Ont. S.C.J.). Civil Practice and Procedure CLASS AND REPRESENTATIVE PROCEEDINGS Representative or class proceedings under class proceedings legislation Small portion of costs payable to plaintiff in cause because of modest refusal to concede limitation period issue Costs of certification motion. Plaintiff acquired prepaid pay- ment card issued by defendant trust company providing finan- cial services. Face value of pay- ment card was pre-paid and de- posited with issuer of card. Plain- tiff learned that each month $2.50 had been deducted from balance of card as service fee. Plaintiff brought class action for breach of contract alleging unfair practice under Consumer Protection Act. Motion judge granted plaintiff 's motion for certification of class action. Parties made submissions on costs. Plaintiff awarded costs of $146,492, all inclusive. Amount of $136,492 was payable within 30 days and balance of $10,000, plus post-judgment interest was pay- able to plaintiff in cause. Motion was total success for plaintiff, even though there was revised class definition. Small portion of costs was payable to plaintiff in cause because of modest refusal to con- cede limitation period issue. Bernstein v. Peoples Trust Co. (2017), 2017 CarswellOnt 5120, 2017 ONSC 2189, Perell J. (Ont. S.C.J.); additional reasons (2017), 2017 CarswellOnt 1361, 2017 ONSC 752, Perell J. (Ont. S.C.J.). LIMITATION OF ACTIONS Actions in contract or debt Parties negotiated over time period where employee could have commenced litigation Plaintiff was employee of defen- dant school board. Employee executed new employment con- tract in 2011, after having worked with board since 1989. Employee claimed pensions were not paid to her for two separate periods, one beginning in 1992 and the other ending in 2011. Employee commenced action for these pensions in 2015. Board claimed action was statute-barred as out of time. Board moved for sum- mary judgment in actions. Mo- tion granted; action dismissed. School board denied liability for pensions in 2011. This was when employee should have known that litigation would be neces- sary to pursue pensions. There was indication of disagreement between parties when employ- ment contract was signed. Par- ties negotiated over time pe- riod where employee could have commenced litigation. In all circumstances, employee should have been aware of 2-year period running from 2011. Ryan v. Peel District School Board (2017), 2017 CarswellOnt 5660, 2017 ONSC 2331, Bloom J. (Ont. S.C.J.). Environmental Law STATUTORY PROTECTION OF ENVIRONMENT Approvals, licences and orders Clauses referring to property indicated adverse effect could occur on more than one property Previous tenant of subject prop- erty caused it to be contami- nated with solvents. Orderees acquired subject property and employees noticed substance seeping through f loor of build- ing on subject property. Director, Minister of Environment and Climate Change, issued order to orderees under s. 18(2)(b) of Environmental Protection Act to delineate contamination that migrated to off-site properties. Tribunal found director had ju- risdiction to make order, that heart of jurisdictional dispute was interpretation of s. 18(2)(b) and phrase "adverse effect", that s. 18(2) was to be read in context of s. 18 in its entirety and that, given s. 18(2) grounds were spe- cifically referred to in s. 18(1), it would be internally inconsistent to interpret grounds of s. 18 order more narrowly than list of items that could be required in s. 18 order. Tribunal further found that neither use of word "may" in phrase "may result from" in s. 18(2)(b) nor anything else in s. 18 expressly limited grounds for order to only future event or to subject property, and found broad interpretation of s. 18(2)(b) harmonious with Act's scheme and objective and Parliamentary intent. Orderees appealed. Ap- peal dismissed. Reasonableness standard applied and tribunal's interpretation of s. 18 was reason- able and correct. Fact that central issue was whether s. 18 permitted director to make off-site orders did not make it jurisdictional is- sue in narrow sense. There was no temporal or geographical constraint on director's powers to issue orders in s. 18(2)(b). Use of word "prevent" in conjunction with "decrease", or "eliminate" in s. 18(2)(b) did not indicate s. 18 order was limited to future events; "decrease" and "elimi- nate" could refer to future event or event that already happened or was responding to existing or ongoing circumstance. Tri- bunal's broad interpretation of wording of s. 18(2)(b) in context of s. 18 as whole was harmonious with scheme and object of EPA and intention of Parliament and consistent with Part XV.1 of Act. Clauses referring to property in- dicated adverse effect could oc- cur on more than one property. Given purpose of EPA, there was no absurdity in holding property owners and managers liable for adverse effects originating on their property or in granting di- rector f lexibility to issue order to anyone with nexus to contami- nated property. Director ordered off-site delineation, not off-site remediation. Tribunal had no need to consider additional in- terpretative principles as there was no ambiguity in s. 18. Hamilton Beach Brands Canada, Inc. v. Ministry of the Environment and Climate Change (2018), 2018 Carswel- lOnt 14488, 2018 ONSC 5010, Marrocco A.C.J. Ont. S.C.J., Harvison Young J., and Myers J. (Ont. Div. Ct.); affirmed (2017), 2017 CarswellOnt 13603, Robert V. Wright V-Chair (Ont. Envi- ronmental Review Trib.). Family Law CUSTODY AND ACCESS Interim custody Both parties worked from home with f lexible hours which made caring for child at home possible Parties began cohabiting in 2009, had one child and separated in December 2016. Father moved to California in September 2016, with understanding that mother and child would join him there once mother finished contract. When mother advised in De- cember 2016 that she and child would not move to California, parties' relationship ended. Fa- ther originally brought motion for shared parenting. Mother brought cross-motion for tem- porary sole custody and choice of school for child; father brought cross-motion for temporary sole custody and choice of school for child. Motions granted in part. Both parties worked from home with f lexible hours, which made caring for child at home possible. Temporary joint custody order was appropriate, with mother having decision-making au- thority on matters pertaining to religion and health, and father having decision-making author- ity on matters of education and daycare. Equal time-sharing residential arrangement was or- dered. Thomas v. Osika (2018), 2018 CarswellOnt 9913, 2018 ONSC 2712, J. Audet J. (Ont. S.C.J.). CASELAW

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