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LAW TIMES 14 COVERING ONTARIO'S LEGAL SCENE | FEBRUARY 25, 2019 www.lawtimesnews.com necessary repairs to bridge to be conducted at plaintiff 's own ex- pense. Plaintiff commenced ac- tion against defendants alleging unseaworthiness of vessel and negligence, and plaintiff asked for damages for cost of repair- ing bridge. Defendants brought motion for summary judgment that sought to dismiss plaintiff 's action on basis that plaintiff 's losses constituted unrecover- able economic losses. Motion granted in part. Motion was al- lowed but judgment was grant- ed in favour of plaintiff, because it was found that plaintiff was entitled to recover its losses, as its situation fell within posses- sory and proprietary exception to general exclusionary rule barring recovery for contractual relational economic loss. It was found satisfactory that Canada Marine Act and agreements gave plaintiff exclusive posses- sion of and possessory interest in bridge, managed asset, for purpose of managing and op- erating seaway. Accordingly, plaintiff 's claim for its damages incurred in paying for repair of bridge fell within possession or proprietary interest exception and were recoverable relational economic losses. If plaintiff were not permitted to bring this action that sought to recover its actual repair costs, then there would be no deterrence fac- tor and all users of seaway who negligently damaged seaway as- sets would be free of liability for their actions. St. Lawrence Seaway Man- agement Corporation v. BBC Lena (Vessel) (2018), 2018 Car- swellNat 7507, 2018 Carswell- Nat 8953, 2018 FC 1026, 2018 CF 1026, Cecily Y. Strickland J. (F.C.). Tax Court of Canada Civil Practice and Procedure PARTIES Vexatious proceedinGs / abuse oF process Taxpayer proved to be vexatious litigant Vexatious litigant. Taxpayer filed notice of appeal accusing federal public servants and law- yers in the federal government of dishonesty, incompetence, fraud, and other criminal acts. Minister of National Revenue brought motion under s. 19.1 of Tax Court of Canada Act for order prohibiting taxpayer from continuing this proceeding and for order prohibiting tax- payer from commencing other proceedings before Tax Court without leave of Court. Motion granted. Taxpayer's notice of ap- peal had already been struck out without possibility of amend- ment as being scandalous, frivo- lous and vexatious, constituting abuse of process and revealing no reasonable grounds of ap- peal. Appeal contained allega- tions that were extremely in- sulting, scandalous, vexatious and defamatory. Brief history of taxpayer's role in other proceed- ings showed that he was vexa- tious litigant. Taxpayer had filed 50-page notice of appeal and continued to send many frivo- lous, vexatious, accusatory and defamatory documents in dif- ferent proceeding. Taxpayer had interfered directly or indirectly in at least two other proceed- ings, where he had been finan- cial advisor for appellants and authored several documents of vexatious quality. Taxpayer had proved to be vexatious liti- gant and he should be barred from commencing any further proceedings in this Court or continuing any proceedings, either on his own behalf or as representative for other persons, without leave from Court. Desrosiers c. La Reine (2018), 2018 CarswellNat 8323, 2018 CCI 251, Rommel G. Masse D.J. (T.C.C. [General Procedure]). Tax INCOME TAX administration and enForcement Taxpayers had burden of establishing correctness of reassessment Taxpayers PM and TM were son and daughter-in-law of NK, who was principal of tax debtor N Ltd.. Tax debtor did not object to three reassessments and did not pay tax owing. Tax debtor issued cheques to taxpayers without consideration. Minister of National Revenue assessed taxpayers pursuant to s. 160 of Income Tax Act. Taxpayers appealed. Appeals dismissed. Monies were transferred by tax debtor to taxpayers for no con- sideration. Taxpayers and tax debtor were not dealing at arm's length. Tax debtor had tax debt owing at time of transfers. Min- ister did not establish that first two underlying reassessments were correct because Canada Revenue Agency (CRA) lost or destroyed documents relating to those years and taxpayers never had access to those tax records. Taxpayers had tax debtor's in- come tax return for third year of reassessment so they had bur- den of establishing correctness of that reassessment. Minister correctly reassessed tax debtor for third year, in disallowing tax debtor's small business deduc- tion. Since tax debt of at least $70,000 in third year's reassess- ment was higher than transfer of monies of $56,500, s. 160 of Act applied. Monsell v. The Queen (2019), 2019 CarswellNat 233, 2019 TCC 5, Johanne D'Auray J. (T.C.C. [General Procedure]). To allow motion to succeed would disproportionately prejudice Crown Minister of National Reve- nue reassessed taxpayer to deny them SR&ED expenditures and related investment tax credits for four taxation years. Tax- payer appealed. Taxpayer did not attend status hearing and Minister's motion to dismiss taxpayer's appeal was granted. Taxpayer brought motion for extension of time to set aside judgment and to set aside judg- ment rendered against it for its failure to attend status hearing. Motion dismissed. Taxpayer had continued intention to pur- sue appeal. Lack of compliance with Tax Court's procedures and process was due to lack of communication provided by counsel on how appeal was pro- ceeding. Appeal did appear to have some merit. To allow mo- tion to succeed would dispro- portionately prejudice Crown due to failure of taxpayer to carry out fundamental obliga- tion in litigation. Reasonable explanation was not given for delay. Taxpayer had not satis- fied requirements necessary for Court to exercise discretion and grant motion requested. Akanda Innovation Inc. v. The Queen (2018), 2018 Car- swellNat 535, 2018 TCC 35, Eugene P. Rossiter C.J. (T.C.C. [General Procedure]). Ontario Civil Cases Civil Practice and Procedure COSTS costs oF particular proceedinGs Plaintiffs did not succeed on most important issue Plaintiffs brought motion for summary judgment for relief relating to interment rights, and for damages for breach of contract. Claim for order di- recting defendants to issue in- terment rights certificate was settled. Plaintiffs were granted summary judgment on breach of contract issue. Before court was functus officio, motion for summary judgment was continued and, on expanded evidentiary record, motion was dismissed in respect of breach of contract. Plaintiffs were to pay costs of $30,000. In sup- port of plaintiffs' claim that they were entitled to costs, they submitted that certificate was always necessary to complete reinterment of remains of their father and that it was reason- able for them to first take steps to obtain certificate. Submis- sion conf licted with finding that plaintiffs would have been in same position with respect to process for obtaining order for disinterment and completing arrangements for disinterment and reinterment as they would have been if there had been no breach of contract. Because of conclusion that delivery of certificate was not needed by plaintiffs to make necessary ar- rangements, plaintiffs did not succeed on most important is- sue, whether there was any prej- udice to them caused by failure of defendant congregation to deliver certificate in timely way. Tsekhman v. Spero (2018), 2018 CarswellOnt 2090, 2018 ONSC 1053, Cavanagh J. (Ont. S.C.J.); additional reasons (2017), 2017 CarswellOnt 3819, 2017 ONSC 1718, P.J. Cavana- gh J. (Ont. S.C.J.). (Ont. S.C.J.); additional reasons (2017), 2017 CarswellOnt 19394, 2017 ONSC 7326, Cavanagh J. (Ont. S.C.J.). Construction Law CONSTRUCTION AND BUILDERS' LIENS practice on enForcement oF lien Equitable grounds for piercing corporate veil rejected by Canadian courts Plaintiff P Ltd. was solely owned, operated and controlled by SP. SB was owner of both corporate defendants, MVMB Inc. and tenant, R Ltd.. MVMB Inc. owned land upon which construction lien had been placed by plaintiff. Last signifi- cant work was done on April 27, 2016 and final work was done on May 15, 2016. Invoice in amount of $34,601.66, as rep- resenting outstanding claim by plaintiff, was issued on May 18, 2016. Defendants have neglect- ed or refused to pay it. Plaintiff brought action claiming to be entitled to lien upon interests of defendants on property for sum of $34,601.66. Action allowed. Plaintiff was granted judgment in amount of $34,101.66. Judg- ment was against two corporate defendants and not against SB, personally. SB should not be held liable for any successful claims by plaintiff for improve- ments done and unpaid for. There had been no significant evidence of bad faith and cer- tainly no evidence of fraudulent activity on his part or with re- spect to either corporation that he controls. There were number of legitimate reasons to incor- porate businesses, including a legitimate concern to protect personal liabilities, but also tax considerations, ability to retain earnings, etc.. Equitable grounds for piercing corporate veil had been rejected by Cana- dian courts and principles re- ferred to above were governing principles. It was established law that supported incorpora- tion of businesses in the man- ner done so by defendant, SB. There was no evidence being provided at this trial to justify establishing his personal li- ability. Plaintiff sent invoices to R Ltd. quite properly. They were not aware of existence of MVMB Inc.. Pryers Construction Ltd. v. MVMB Holdings Inc., et al (2018), 2018 CarswellOnt 21480, 2018 ONSC 7605, K.E. Pedlar J. (Ont. S.C.J.). Contracts RECTIFICATION OR REFORMATION prerequisites Court could not rectify individual's error of judgment Plaintiff creditor/assignee moved for summary judgment, in action against defendant. Motion was successful. Credi- tor was granted declaratory re- lief, setting aside transfer of six subject properties. Transfer had been made by company which plaintiff oversaw in bankrupt- cy, to defendant individual. Issue of mortgage granted by defendant's company to over- seen company was still live. Individual sought rectification as equitable relief, based on unilateral mistake. Individual claimed that discharge of mort- gage should be set aside, and that mortgage should be regis- tered on title. Individual applied for order granting above-noted relief. Application dismissed. Individual testified as to discus- sions with her real estate law- yer. Individual would have had knowledge that indebtedness of overseen company was not discharged, even though mort- gage was not discharged. Court could not rectify individual's er- ror of judgment. Truestar Investments Ltd. v. Baer (2018), 2018 Carswel- lOnt 20819, 2018 ONSC 7372, Sylvia Corthorn J. (Ont. S.C.J.); additional reasons (2018), 2018 CarswellOnt 8093, 2018 ONSC 3158, Sylvia Corthorn J. (Ont. S.C.J.). Family Law COSTS support Neither party obtained order that was as favourable or more favourable than offer to settle Parties were married for three years. Wife brought motion for interim spousal support, and for interim disbursement of $15,000. Husband was ordered to pay support on interim, without prejudice basis of $750 per month. Wife's request for interim disbursement was dis- missed. Parties made submis- sions on costs. Costs awarded to wife. While wife was successful in her claim for interim spousal support, she was not success- ful on quantum nor on her re- quest for interim disbursement. Neither party obtained order that was as favourable or more favourable than offer to settle. Since spousal support was main issue argued at motion, and wife was successful party on that is- sue, she was entitled to costs in amount of $8,182.40 inclusive of disbursements and HST. Blackstock v. Comeau (2018), 2018 CarswellOnt 2437, 2018 ONSC 1098, Hélène C. Desormeau J. (Ont. S.C.J.); addi- tional reasons (2018), 2018 Cars- CASE LAW

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