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www.lawtimesnews.com LAW TIMES COVERING ONTARIO'S LEGAL SCENE | FEBRUARY 4, 2019 15 squad and his opportunity to leave. GIC reasonably took into account judicial concerns about applicant's testimony being unreliable and minimizing his wartime role. GIC reasonably concluded that applicant could not have been unaware of what squad did and did not partici- pate under duress. Oberlander v. Canada (At- torney General) (2018), 2018 CarswellNat 5347, 2018 Car- swellNat 5348, 2018 FC 947, 2018 CF 947, Michael L. Phelan J. (F.C.). Tax GOODS AND SERVICES TAX AdministrAtion And enforcement Strict interpretation of Excise Tax Act was reasonable and consistent with past jurisprudence Remission order. Registrant de- livered travel trailers to US cus- tomers on Canadian side of bor- der and customers transported trailers through US customs. Registrant did not collect Har- monized Sales Tax (HST) from US customers based on mistaken understanding that supply was made outside Canada and not taxable under s. 142 of Excise Tax Act (ETA). Registrant paid as- sessed HST and interest. Canada Revenue Agency (CRA) officer refused to recommend that re- mission order be granted under s. 23(2) of Financial Administra- tion Act (FAA) in respect of HST. Registrant brought application for judicial review. Application dismissed. Officer reasonably concluded that for business with average annual revenues of $7 million, tax debt of less than $300,000 did not constitute fi- nancial setback justifying remis- sion order. Officer's failure to conduct proper analysis of finan- cial records or explicitly acknowl- edge registrant's contention that tax amount represented 90 per cent of annual after tax income did not make decision unreason- able. Officer's conclusion that there was no extenuating factors was reasonable, even though he did not mention registrant's error in not collecting HST. Officer's failure to pursue registrant's offer of sworn statutory declaration as to advice given by CRA did not result in procedural fairness vio- lation. Officer's strict interpreta- tion of s. 142 of ETA, that goods and services received by final consumer in Canada were tax- able, which led to conclusion that trailers should be subject to HST, was reasonable and consistent with past jurisprudence. Inter- pretation may not have been cor- rect as it frustrated intent of ETA to tax consumption of goods in Canada and was at odds with eq- uitable underpinnings of s. 23(2) of FAA. Escape Trailer Industries Ltd. v. Canada (Attorney Gen- eral) (2019), 2019 CarswellNat 60, 2019 FC 31, Michael D. Man- son J. (F.C.). Tax Court of Canada Tax INCOME TAX AdministrAtion And enforcement Estate pleaded sufficient basis in Notice of Appeal to challenge correctness of reassessments Estate was reassessed by Minis- ter of National Revenue for taxa- tion years 1992 to 1996 under Income Tax Act so as to increase taxable income and included ar- rears interests. Notices of reas- sessment were sent to daughter of late taxpayer and daughter objected to reassessments, ask- ing that they be vacated. Min- ister confirmed reassessments and daughter filed appeal. Re- spondent brought motion for order quashing, striking out or expunging Notice of Ap- peal. Motion dismissed. Section 169(1) provides that where tax- payer has served notice of objec- tion under s. 165, taxpayer may appeal to this Court to have as- sessment vacated or varied and s. 248(1) defines word "taxpayer" for purposes of Act as includ- ing "any person whether or not liable to pay tax". Definition of "person" in Act was expan- sive definition which includes heirs, executors, liquidators of succession, administrators or other legal representatives of such person, according to law of that part of Canada to which context extends. Word "heir" contemplated by definition of "person" had to be interpreted in accordance with Civil Code of Québec (CCQ) and CCQ did not require that, to be consid- ered "heir", one had to admin- ister, wind-up, control or oth- erwise deal in representative or fiduciary capacity with property that belonged to another person. Daughter qualified as heir of Es- tate and was therefore "person" and "taxpayer" as defined under s. 248(1). Accordingly, daughter could object to reassessments under s. 165 and initiate appeal under s. 169. Daughter had legal capacity to commence or con- tinue proceeding for Estate. Es- tate had pleaded sufficient basis in Notice of Appeal to challenge correctness of reassessments. Estate of Winifred Straessle v. The Queen (2018), 2018 Car- swellNat 3779, 2018 TCC 144, Dominique Laf leur J. (T.C.C. [General Procedure]). Blind acceptance of returns amounted to wilful blindness and gross negligence Taxpayer had her tax returns prepared by DSC and signed them without review. Minister reassessed taxpayer for 2008 and 2009 taxation years, including gross negligence penalties in re- spect of net business loss falsely claimed for each taxation year. Taxpayer appealed. Appeal dis- missed. Taxpayer was aware that Minister had disallowed 2005 and 2006 charitable deductions and assessed gross negligence penalty. Taxpayer admitted that she had done no work for busi- ness pushed by DSC. Blind ac- ceptance of returns prepared by DSC in face of reassessments and disallowances of deductions amounted to wilful blindness and as well to degree of negli- gence sufficient to constitute gross negligence. Educated tax- payer cannot fob off responsibil- ity so as to be unaware of what is being claimed on his/her behalf; while giving no credence to am- ple signs of non-acceptance of previous filings by Minister. Tavernier v. The Queen (2018), 2018 CarswellNat 4760, 2018 TCC 173, B. Russell J. (T.C.C. [General Procedure]). INCOME TAX Business And property income Payments were consideration for termination, cancellation or extinguishing of options, but not cost of options In context of two corporate takeovers, by A of N and by D of A, N and A made surrender payments to various individu- als who held options to acquire shares. Corporations deducted surrender payments but Min- ister disallowed deductions. D as successor corporation con- tended 75 per cent of surrender payments were deductible as eligible capital expenditures un- der s. 20(i)(b) and s. 111(5.2) of Income Tax Act. D appealed re- assessment and determination. Appeal allowed. Surrender pay- ments were made or incurred by N and A respectively in respect of their businesses for purpose of gaining or producing income from businesses and qualified as eligible capital expenditures. As options ceased to exist on payment, payment was not cost of property within s. 14(5)(f ) (iii) or (iv) exclusions. Payments were consideration for termina- tion, cancellation or extinguish- ing of options, but were not cost of options. Reassessment and determination referred back to Minister for reconsideration and reassessment or re-determi- nation on basis that surrender payments were eligible capital expenditures. Devon Canada Corpora- tion v. The Queen (2018), 2018 CarswellNat 4610, 2018 TCC 170, Don R. Sommerfeldt J. (T.C.C. [General Procedure]). Ontario Civil Cases Aboriginal and Indigenous Law PRACTICE AND PROCEDURE miscellAneous Municipality, not "Crown" authority in any sense of the word, also named as defendant Claim by plaintiff group of four first Nations sought declaration that strip of land adjacent to re- serve was part of that reserve. Defendants were provincial and federal Crown and mu- nicipality. Issues determined at trial were whether plaintiffs' claim barred by res judicata or issue estoppel; whether strip was set aside as part of reserve; and whether it was intended pursuant to Treaty #3 and re- serve selection process that followed that strip was to be part of reserve such that fail- ure to include it was a breach of Crown's fiduciary duty or honour of Crow. Plaintiffs suc- ceeded regarding issue estop- pel, but defendants succeeded on other grounds. Municipal- ity claimed total costs claim of $1,474,833 on partial indemnity basis. Plaintiffs submitted that municipality's costs should be reduced to ref lect complex and novel Aboriginal law issues in- volved in this case, importance of promoting reconciliation in claims with merit involving First Nations and to promote access to justice for First Na- tions who are advancing claims related to their constitutional rights. Costs awarded to mu- nicipality. Plaintiffs' submis- sions are well supported in case law and have considerable merit in general sense. However, ap- plication of these principles is necessarily fact specific and were not applicable in present case. Uncertainty that existed for 135 years as to exact bound- aries of reserve following sign- ing of Treaty #3 rested squarely with Crown. Ancestors of plaintiffs reasonably assumed that reserve's boundaries ex- tended to normal high water mark of adjacent water bodies, thus it was fair and reasonable for plaintiffs to now assert that their claim had merit and that their exposure for costs of ac- tion brought to assert what they reasonably assumed to have been theirs for 135 years should be reduced. However, this claim was somewhat unique because municipality, which is not "Crown" authority in any sense of the word, was also named as defendant. Municipality had nothing to do with negotiation of Treaty #3 or reserve creation process mandated by Treaty #3. Canada and Ontario did not seek their costs from plaintiffs, who were therefore been re- lieved of any costs consequenc- es of action vis-à-vis federal and provincial Crowns. There was no compelling policy reason why plaintiffs should be further relieved of usual fair and rea- sonable costs consequences in relation to municipality. Costs of $1,396,296 awarded to mu- nicipality on partial indemnity basis. Couchiching v. Canada (A.G.) (2018), 2018 CarswellOnt 14016, 2018 ONSC 5051, J. Fre- geau J. (Ont. S.C.J.); additional reasons (2014), 2014 Carswel- lOnt 1945, 2014 ONSC 1076, J.S. Fregeau J. (Ont. S.C.J.). PLANNING prActice And procedure on enActment or ApprovAl of plAn Any plan was subject to qualification where limited funds were available Bridge in issue was one-lane structure over river, which, appli- cants submitted, provided traffic calming and maintained serenity of the surrounding conservation area. Applicants made applica- tion for judicial review of city's decision to replace one-lane, load- restricted heritage bridge on road with two-lane, highway standard bridge. Application dismissed. There was nothing in record that would suggest that different result would occur if city were ordered to start process over. Indeed, pro- cess that applicants wished still allowed for council to approve or disapprove. Even with approval, any plan was subject to qualifi- cation where limited funds were available. City was not unreason- able in following the process it did to come to decision it made. Whiteley et al v. The Cor- poration of the City of Guelph (2019), 2019 CarswellOnt 47, 2019 ONSC 118, G.D. Lemon J. (Ont. S.C.J.). ZONING legAl non-conforming use Previous use of property was substantially different than present use Respondent purchased prop- erty. Applicant municipality amended zoning bylaw allow L to establish and operate tow- ing business out of garage on property as "home industry". Respondent built large "cover- all" structure on vacant lot next to property without obtaining building permit. Municipal- ity was concerned that towing business no longer conformed to definition of home indus- try. Dispute was resolved when respondent moved business to property purchased elsewhere in municipality. Municipality amended bylaw to expressly ex- clude repair of motor vehicles as home industry. Municipality received complaint that respon- dents operating auto repair shop on property in contravention of bylaw. Municipality brought application for injunction to re- strain respondents from operat- ing auto repair shop on property. Application granted. Property was being used as auto repair shop. Auto repairs undertaken at property before towing business moved were incidental to towing business. Respondent operated towing business at property and not auto repair shop. Previous use of property was substantially different than present use. Auto repair shop presently operating at property was not legal non- conforming use. The Municipality of West Nipissing v. Lafond (2017), 2017 CarswellOnt 8011, 2017 ONSC 3097, Ellies J. (Ont. S.C.J.). CASE LAW

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