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LAW TIMES COVERING ONTARIO'S LEGAL SCENE | MARCH 4, 2019 13 www.lawtimesnews.com Supreme Court of Canada Bankruptcy and Insolvency PRIORITIES OF CLAIMS UnsecUred claims "Disclaimer" did not empower trustee to simply walk away from " disclaimed" assets Provincial legislation imposed environmental obligations with respect to abandonment and re- mediation of "end of life" oil wells. Trustee-in-bankruptcy G Ltd. sought to disclaim R Corp.'s inter- est in wells where costs of reme- diation exceeded wells' value (dis- claimed wells), but sought to keep and sell valuable wells to maxi- mize recovery of secured credi- tor. Orphan Wells Association (OWA) and Regulator applied for declaration that G Ltd.'s disclaim- er of licensed wells was void and G Ltd. cross-applied for approval of sales process that excluded re- nounced wells. Chambers judge dismissed main application and granted cross application. Ap- peals by OWA and Regulator dismissed. Section 14.06 of Bank- ruptcy and Insolvency Act (BIA) did not exempt environmental claims from general bankruptcy regime, other than super prior- ity in s. 14.06(7). Role of G Ltd. as a "licencee" under Oil and Gas Conservation Act and Pipeline Act was in operational conf lict with provisions of BIA. OWA and Regulator appealed. Appeal al- lowed. There was no conf lict be- tween Alberta's regulatory regime and BIA requiring portions of former to be rendered inoperative n context of bankruptcy. "Dis- claimer" did not empower trustee to simply walk away from "dis- claimed" assets when bankrupt estate had been ordered to remedy any environmental condition or damage. No operational conf lict was caused by fact that G Ltd., as licensee, remained responsible for abandoning renounced assets. End-of-life obligations binding on G Ltd. were not claims prov- able in R Corp. bankruptcy, so they did not conf lict with general priority scheme in BIA. Orphan Well Association v. Grant Thornton Ltd. (2019), 2019 CarswellAlta 141, 2019 CarswellAlta 142, 2019 SCC 5, 2019 CSC 5, Wagner C.J.C., Abella J., Moldaver J., Kara- katsanis J., Gascon J., Côté J., and Brown J. (S.C.C.); reversed (2017), 2017 CarswellAlta 695, 2017 ABCA 124, Frans Slatter J.A., Frederica Schutz J.A., and Sheilah Martin J.A. (Alta. C.A.). Federal Court of Appeal Tax OTHER FEDERAL TAXES miscellaneoUs Ministerial review period only began at point that criminal charges were stayed Return of items seized under Ex- cise Act, 2001. Pursuant to search warrant issued under Crimi- nal Code, RCMP seized cash and other items. Plaintiffs were charged under Excise Act, 2001 and Code, but charges were later stayed. Plaintiffs received seizure report listing items seized on ba- sis of contravention of Act, but did not request return of money with- in time period. Defendant Crown did not return money because it was forfeited at time of seizure and was not subject to applica- tion under s. 490 of Code. Federal Court judge dismissed plaintiffs' motion for summary judgment of their action for declaration that defendant was unlawfully detain- ing seized funds and granted de- fendant's motion to summarily dismiss claim. Plaintiffs appealed. Appeal allowed in part. Plaintiffs' motion for summary judgment was granted only to declare that 90-day period for seeking minis- terial review under s. 271 of Act of seizure of funds began with date of this judgment. In these circum- stances, and in respect of money only, seizure report did not trigger 90-day period. Money retained dual character as it was at heart of charges under Code, included in report, referred to in information, and central to prosecution under Act. If goods were forfeit upon seizure, all evidence except weap- ons and ammunition should have been subject to ministerial review, but some items were re- turned via process under s. 490 of Code. On these facts, ministerial review period under s. 271 of Act only began at point that criminal charges were stayed. As matter of law, goods seized in execution of search for violations of Act were forfeit on seizure, and Ministerial review period ran concurrently with criminal proceedings in re- spect of those seized goods. Flaro v. Canada (2019), 2019 CarswellNat 308, 2019 FCA 30, Johanne Gauthier J.A., Donald J. Rennie J.A., and Mary J.L. Glea- son J.A. (F.C.A.); reversed (2018), 2018 CarswellNat 650, 2018 Car- swellNat 997, 2018 FC 229, 2018 CF 229, Ann Marie McDonald J. (F.C.). Federal Court Pensions PRIVATE PENSION PLANS administration of pension plans Provision of health services to Indians was long standing federal undertaking Applicants P Inc. and NITHA were non-profit health services corporations that delivered health services to PB Cree Na- tion pursuant to health agree- ments with federal government. Applicants provided registered pension plans to employees and registered them with federal authority, Office of Superin- tendent of Financial Institu- tions of Canada (OSFI). Pri- vate Pension Plans Division of OSFI notified applicants that their pension plans did not fall under federal jurisdiction and were transferred to provincial pension regulator. Applicants brought application for judicial review. Application granted. Constitutional question of divi- sion of powers was reviewed for correctness, while findings of fact were reviewed for reason- ableness. OSFI decision-maker erred in conducting functional test, by unreasonably failing to consider treaty relationship between First Nations and fed- eral government when decid- ing whether applicants' delivery of health services was federal undertaking. Declaration was made that delivery of health services for on-reserve First Nations members pursuant to health agreements between fed- eral government and applicants constituted federal undertak- ing that came within definition in s. 4(4)(i) of Pension Benefits Standards Act. Historical treaty record showed that provision of health services to Indians was long standing federal under- taking made in keeping with treaty relationship. Applying functional test, nature of ap- plicants' activities was delivery of health services promised in treaties and realized through federal government's undertak- ing to provide health services to First Nations, which came within federal jurisdiction pur- suant to s. 91(24) of Constitution Act, 1867. To alter jurisdiction for delivery of health services to provincial jurisdiction was impermissible abandonment of federal treaty promises to pro- vide health services. Northern Inter-Tribal Health Authority Inc. v. Can- ada (Attorney General) (2018), 2018 CarswellNat 7409, 2018 CarswellNat 8538, 2018 FC 1180, 2018 CF 1180, Leonard S. Man- damin J. (F.C.). Tax Court of Canada Tax GOODS AND SERVICES TAX exempt sUpplies Brokers had no authority to enter into any contracts on behalf of registrant Registrant was sole shareholder of company and retained ser- vices of two brokers to find buyer for business. Registrant preferred share sale arrange- ment over other ways to dis- pose of business. When brokers found buyer who purchased shares of business, registrant paid brokers' commission plus Harmonized Sales Tax (HST) of $140,792 for each broker for to- tal of $281,584. Registrant then applied for refund of HST paid on commission, on basis that it was paid in error on ground that such services were exempt supplies of financial services. Minister denied HST refund. Registrant appealed. Appeal dismissed. It was clear that es- sential duty of brokers was to find buyer for registrant's busi- ness and not specifically for shares of registrant. Brokers had no authority to enter into 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. Case Law CASE LAW 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! 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