Law Times

Page 22 December 10, 2018 • Law Times www.lawtimesnews.com Supreme Court of Canada Constitutional Law LANGUAGE RIGHTS Under Charter of Rights and Freedoms Counsel for insurance company took appropriate steps to assert his own language rights Individual worked for insurance company, and when his con- tracted ended, individual asked that his employment be con- sidered insurable employment, which Canada Revenue Agency rejected. Individual took case to tax court and insurance compa- ny intervened as party, and ex- amined witnesses to make point that individual's contract was contract for services and not em- ployment. Individual was self- represented at hearing and in- dicated that he had troubles un- derstanding French and that he would need translator if French were used during proceedings. Some of witnesses and counsel for insurance company indi- cated that they wanted to speak in French, but judge asked them to speak in English and judge steered testimony and presenta- tion of counsel's argument back to English. Individual was suc- cessful in his proceedings, but insurance company successfully appealed and Federal Court of Appeal found that language rights of insurance company's counsel and witnesses had been violated, and new hearing before different judge was ordered. In- dividual appealed. Appeal dis- missed. It was found that there were numerous language rights violations, and they had unde- niable impact on witnesses and parties, on conduct of hearing and even on its outcome, and brought administration of jus- tice into disrepute. All persons who appeared in federal courts must be able to freely exercise their fundamental and substan- tive right to speak in official language of their choice, as two legislative provisions, namely s. 133 of Constitution Act, 1867 and s. 19 of Charter of Rights and Freedoms, protected indi- viduals' rights to use English and French in those courts. Counsel for insurance company took appropriate steps to assert his own language rights as well as language rights of his clients and his witnesses, and language rights were raised from start of hearing and reiterated forcefully throughout proceedings. Coun- sel's choice to defer to judge's instructions was result of judge's insistence that witnesses speak in English and was not tactical move, therefore order for new hearing was fully justified. Mazraani c. Industrielle Alliance, Assurance et services financiers inc. (2018), 2018 Car- swellNat 6701, 2018 CarswellNat 6702, 2018 SCC 50, 2018 CSC 50, Wagner C.J.C., Abella J., Mol- daver J., Karakatsanis J., Gas- con J., Côté J., Brown J., Rowe J., and Martin J. (S.C.C.); affirmed (2017), 2017 CarswellNat 1457, 2017 CarswellNat 1458, 2017 FCA 80, 2017 CAF 80, Johanne Gauthier J.A., Richard Boivin J.A., and Yves de Montigny J.A. (F.C.A.). Criminal Law APPEALS Miscellaneous Argument amounted to submission that even if there was error, no substantial wrong or miscarriage of justice occurred Curative proviso. Accused tax return preparer filed claims for charitable donations of used goods to registered charity on behalf of his clients, believing that claims were valid. Canada Customs and Revenue Agency (CCRA) investigator gave evi- dence that charity had reported very few donations and that donation claims were false. Jury convicted accused of fraud over $5,000 for filing false claims of charitable donations on behalf of his clients. Trial judge sentenced accused to 30 months in custo- dy. Majority of Ontario Court of Appeal dismissed accused's ap- peals from conviction and sen- tence. Accused appealed. Appeal dismissed. Majority commented that, while Crown did not ex- plicitly refer to curative proviso, Crown's argument amounted to submission that even if there was error in admitting investigator's evidence, no substantial wrong or miscarriage of justice had oc- curred. This comment was ad- opted. Given that there was no miscarriage of justice, curative proviso was properly relied on. R. v. Ajise (2018), 2018 Car- swellOnt 19672, 2018 Carswel- lOnt 19673, 2018 SCC 51, 2018 CSC 51, Abella J., Karakatsanis J., Côté J., Brown J., and Rowe J. (S.C.C.); affirmed (2018), 2018 CarswellOnt 8628, 2018 ONCA 494, Robert J. Sharpe J.A., Pardu J.A., and Fairburn J.A. (Ont. C.A.). Tax GOODS AND SERVICES TAX Special rules Bankruptcy of tax debtor and s. 222(1.1) of ETA render deemed trust ineffective as against secured creditor Tax debtor paid sales proceeds of property to defendant secured creditor C Corp. prior to bank- ruptcy. Crown brought action against creditor for recovery of dispositions made before bank- ruptcy on basis of deemed trust mechanism in s. 222 Excise Tax Act (ETA) because of prior unre- mitted GST and HST. Creditor brought motion for determina- tion of question of law, namely, whether bankruptcy of tax debt- or and s. 222(1.1) of ETA render deemed trust under s. 222 of ETA ineffective as against se- cured creditor who received, prior to bankruptcy, proceeds from assets of tax debtor that were deemed to be held in trust for Crown. Federal Court judge granted creditor's motion and answered question in affirma- tive. Majority of Federal Court of Appeal allowed Crown's ap- peal and answered question in negative. Majority held that, pursuant to s. 222(3) of ETA, any proceeds should have been paid to Crown in priority to any se- curity interest pre-bankruptcy, and since proceeds were paid out of priority, obligation to pay was created on creditor, inde- pendent of existence of deemed trust. Dissenting Federal Court of Appeal judge answered ques- tion in affirmative and held that trust created by s. 222(3) of ETA lapsed due to lack of subject mat- ter by operation of s. 222(1.1) of ETA following debtor's bank- ruptcy. Creditor appealed. Ap- peal allowed. Appeal was al- lowed for reasons of dissenting Federal Court of Appeal judge. Federal Court judgment that answered question in affirma- tive was reinstated. No comment was made on scope of deemed trust or any liability under s. 222 of ETA prior to bankruptcy. Callidus Capital Corp. v. Canada (2018), 2018 Carswell- Nat 6687, 2018 CarswellNat 6688, 2018 SCC 47, 2018 CSC 47, Wag- ner C.J.C., Abella J., Moldaver J., Karakatsanis J., Gascon J., Côté J., Brown J., Rowe J., and Martin J. (S.C.C.); reversed (2017), 2017 CarswellNat 3599, 2017 Car- swellNat 9496, 2017 FCA 162, 2017 CAF 162, J.D. Denis Pelle- tier J.A., D.G. Near J.A., and Don- ald J. Rennie J.A. (F.C.A.). Federal Court of Appeal Tax INCOME TAX Tax avoidance Interest commenced to accrue from balance-due date not from date reassessment was issued Two predecessor corporations, B Corp. and L Ltd., amalgamated with certain other corporations to form taxpayer in August 2004. In filing tax returns for taxation year that ended immediately be- fore amalgamation, B Corp. and L Ltd. reported income based on capital gains, capital losses, net capital gain and net capital loss. By notices of reassessments dated April 7, 2009, total amount of capital losses claimed by each were denied on basis that general anti-avoidance rule (GAAR) ap- plied to transactions that resulted in losses and as result, allowable capital losses were reduced to nil. Since there were then significant taxable capital gains their Part I tax liability was determined to be substantially more than had previously been assessed and in- terest was charged in relation to increased Part I tax liability for period commencing immediately after balance-due date for each. Tax Court Judge reviewed nature of assessment based on GAAR and completed textual, contex- tual and purposive analysis of ss. 245 and 161 of Income Tax Act. Tax Court Judge concluded that reassessment based on GAAR did not create tax liability upon is- suance of such reassessment and that interest commenced to ac- crue immediately following bal- ance-due date for particular year. Taxpayer appealed. Appeal dis- missed. Requirement that Minis- ter in GAAR cases must establish that tax benefit was not consistent with object, spirit or purpose of CASELAW Caselaw is a weekly summary of notable civil and criminal court decisions by the Supreme Court of Canada, the Federal Court of Canada and all Ontario courts. These cases may be found online in WestlawNext Canada. To subscribe, please access carswell.com or call 1-800-387-5164. CASELAW Containing contact information for more than 66,000 judges and legal professionals, more than 27,500 law offices, government departments, and law related offices, canadianlawlist.com attracts more than 325,000 page views a month and 110,000 unique visitors! Book your enhanced listing today! Contact Colleen Austin at 416.649.9327 or colleen.austin@tr.com www.canadianlawlist.com Enhance your presence on Canada's largest legal directory AVAILABLE ONLINE AND IN PRINT Untitled-2 1 2018-09-05 10:17 AM

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