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Page 18 pointed to them Appeal by taxpayer. In payroll audit of group of related companies, companies provided list of subcontractors that included taxpayer's misspelled name and address. Apart from confirming that taxpayer lived at address provided, CRA did no other verification that taxpayer received any amounts from audited group of companies before assessing him to add $28,000 in income. Appeal allowed. Taxpayer, who spoke only Russian, consistently maintained that he had never heard of any of these companies or their principals, never worked for any of them, and never received any money from them. Taxpayer's position was plausible prima facie while Minister did not adduce credible evidence to support assessing position. It was simply insufficient to tax taxpayer solely because person under audit pointed to them and provided their name and address. Names and addresses were readily available publicly, and audited companies did not provide social insurance numbers or any other evidence to support amounts allegedly paid to those on list. No reconciliation of taxpayer's banking records or net worth assessment was conducted. Principal of one company testified that she hired taxpayer as driver but that her company did not pay him. It was entirely possible that taxpayer did work for and got paid by these companies, but evidence fell very short of establishing that conclusion on balance of probabilities. Gorfain v. R. (Apr. 10, 2013, T.C.C. [Informal Procedure], Patrick Boyle J., File No. 20121331(IT)I) 228 A.C.W.S. (3d) 871. Use of material sought by taxpayer would be breach of implied undertaking Motion by taxpayer to enter evidence based on information provided by representative of Canada Revenue Agency in tax appeal process, and motion by employer for intervener status. Taxpayer's employer claimed he misappropriated funds from workplace and terminated him. Taxpayer's employer commenced civil action to recover alleged misappropriated funds, and taxpayer pursued wrongful dismissal claim. Both proceedings settled. Minister investigated taxpayer and reassessed him for unreported income. Taxpayer's appeal from reassessment was settled by consent judgment. Taxpayer claimed employer provided Canada Revenue Agency with series of false, incomplete and misleading documents and improperly disclosed privileged information. Taxpayer brought action against employer. Taxpayer's motion was dismissed, and employer's motion was granted. Use of material sought by taxpayer would be breach of implied undertaking rule. Parties September 16, 2013 Law Times • caselaw and issues were different in that issue in appeal before current court had to do with applicant's tax liability for unreported income and for penalties, and issues in other action concerned malicious prosecution and defamation. Evidence presented by taxpayer was unclear as to what efforts were made to obtain documents from other sources. Evidence had not been adjudicated on and could be unreliable. Contrary to public interest to allow evidence to be entered. No delay would occur if employer made intervener as it had already provided submissions. No prejudice shown if employer made intervener. Employer had interest in matter as it could be affected financially by information provided. Armstrong v. R. (Feb. 20, 2013, T.C.C. [General Procedure], François Angers J., File No. 2009-2099(IT)G) 228 A.C.W.S. (3d) 874. Taxpayer was well educated and magnitude of misstatement was huge Appeal by taxpayer from imposition by Minister of penalties for gross negligence. Taxpayer ran business as musician and later claimed to run another business as agent. Taxpayer claimed large amount of business losses. Taxpayer claimed that as natural person he was not required to pay taxes and that expenses could be legitimately deducted on behalf of fictitious person. Minister assessed taxpayer under Income Tax Act (Can.), disallowing business expenses and imposing penalties. Appeal dismissed. Taxpayer claimed that he, as agent, paid expenses to himself as principal, and while he may not have understood what this meant he knew that he had not incurred expenses at issue. Taxpayer made statement knowingly and was not willfully blind. Taxpayer was well educated and magnitude of misstatement was huge. Taxpayer should have been aware that claiming losses much larger than income was improper. Taxpayer did not properly educate himself about tax preparer who prepared his returns. Janovsky v. R. (Apr. 24, 2013, T.C.C. [Informal Procedure], Valerie A. Miller J., File No. 2012-4340(IT)I) 228 A.C.W.S. (3d) 879. Court had no jurisdiction to waive interest Appeal by taxpayer from reassessment by Minister under Income Tax Act (Can.). Taxpayer worked as post-doctoral scholar in 2009 and 2010 at university receiving annual stipend of $39,500. In position, taxpayer was not pursuing credits, certificate or degree from university to which her research work related. Prior to coming to university, taxpayer was in United States and obtained work permit to take position in Canada. Permit was not student or study permit. Legislative amendment was enacted to make clear that qualifying educational program for tax-exempt scholarships only included university research programs if program led to degree. Amendment applied to 2010 and later years. University informed post-doctoral fellows of change in October 2010 at which time it also started making tax withholdings. In filing 2010 tax return, taxpayer reported it as scholarship income, which was consistent with how university issued her 2010 T4. Taxpayer was initially assessed on this but was reassessed in late 2011 to deny her tax exemption for scholarships on her post-doctoral research stipend. Appeal dismissed. It was clear from amended definition of "qualified educational program" that taxpayer's postdoctoral research work could not qualify. Parliament had power to pass retroactive legislation and had clearly done so in this case. There was no ambiguity or uncertainty in what legislature had chosen to do and it was within their power to do it. There was no basis for court not to apply properly enacted law on grounds of equity or fairness. Court could not delay application of law to date when university informed its post-doctoral researchers or when it began to withhold from them. Court had no jurisdiction to waive interest. Lewis v. R. (Apr. 8, 2013, T.C.C. [Informal Procedure], Patrick Boyle J., File No. 2012-1805(IT) I) 228 A.C.W.S. (3d) 883. ONTARIO CIVIL DECISIONS Contracts INTERPRETATION Phrase "including GST" did not imply discount to appellant Appellant appealed application judge's interpretation of contract. Appellant was Indian Band. Respondent provided fundraising services to clients such as appellant. Respondent contracted with appellant to solicit donations. Contract provided that respondent would be paid fee equal to 15%, including GST of gross amount of donations raised for appellant. Appellant was exempted from paying GST on services provided to it. Service provider to appellant was not required to collect GST from it. Dispute arose. Appellant argued that GST constituted deduction from 15% it was required to pay while respondent claimed that "including GST" meant that GST payable on services to appellant was zero because of exemption. Application judge agreed with respondent's interpretation. Appeal dismissed. Phrase "including GST" referred to GST that client had to pay for services, which given appellant's tax exempt status was zero. Phrase "including GST" did not imply discount to appellant. Application judge was correct to find www.lawtimesnews.com that language of contract was clear and that respondent read it correctly. Global Learning Group Inc. v. Eskasoni First Nation (May. 16, 2013, Ont. C.A., M. Rosenberg J.A., S.T. Goudge J.A., and M. Tulloch J.A., File No. CA C56153) 228 A.C.W.S. (3d) 693. Civil Procedure DISCOVERY Litigation not contemplated as dominant purpose in commissioning investigation Motion by plaintiff for production of documents. Plaintiff contracted with defendant for various items of electrical work from 1980 to 2001 on basis of contracts that were awarded according to process set out in unilateral bidding contracts. Plaintiff claimed that from 2005 on, it was excluded from projects, except for two minor ones, in spite of having been asked to bid. Plaintiff said it was excluded corruptly and in breach of bidding contract, and that defendant agents libelled plaintiff by publishing defamatory comments to persons in industry. In examination for discovery of defendant's representative, plaintiff asked for production of reports of investigations commissioned by defendant. Defendant refused to produce reports on basis of litigation privilege and solicitor-client privilege. Motion granted. One report was commissioned to determine merits of allegations and whether any internal action was required. It had nothing to do with litigation. Second report was result of independent investigation by external body with relevant expertise. Litigation was not contemplated as dominant purpose in commissioning investigation. Solicitorclient privilege did not apply. Retainer of investigator was not essential to existence or operation of solicitor-client relationship. Both reports were to be produced within 30 days. Weinmann Electric Ltd. v. Niagara Falls Bridge Commission (May. 15, 2013, Ont. S.C.J., J.A. Ramsay J., File No. St Catharines 53868/12) 228 A.C.W.S. (3d) 657. JURY NOTICE Proprietary estoppel rooted in equity and to be tried without jury Motion by defendants to strike out jury notice. Plaintiffs purchased residence on reserve of defendant First Nation, together with assignment of vendors' interest in long-term land lease. While plaintiffs were looking for year-round residence, lease provided that property could only be occupied from April to October. Plaintiffs occupied residence during first winter. Before second winter they were advised they could not occupy property in winter. Band council then passed resolution terminating lease. Plaintiffs alleged that defendants were estopped from enforcing restrictive cove- nant of lease that prevented occupation during winter months. They also sought compensation for damage to property by vandals. Plaintiffs served jury notice. Motion granted. Claim that plaintiffs were entitled to year-round occupancy of property was based on proprietary estoppel. Proprietary estoppel was principle rooted in equity. Therefore, plaintiffs action was essentially claim for equitable relief. Under s. 108(2) of Courts of Justice Act (Ont.), it had to be tried without jury. Lightfoot v. Chippewas of Georgina Island First Nation (Apr. 30, 2013, Ont. S.C.J., Boswell J., File No. 62777/02) 228 A.C.W.S. (3d) 658. PLEADINGS Plaintiff could not rely on common law to advance claims or psychological injuries Defendant airline brought motion for order striking out plaintiff 's claims for punitive, aggravated and exemplary damages. Airline also sought declaration to exclude recovery for damages for purely psychological injuries not caused directly by bodily injury. Plaintiff brought proposed class action on behalf of passengers on airline flight. Plaintiff alleged that passengers suffered physical or psychological injury or both from harrowing experience during flight from Toronto to Zurich. First officer mistook planet Venus for another aircraft. First officer violently forced aircraft control column forward, which caused it to enter into sudden and steep dive into path of oncoming aircraft. Captain was forced to execute emergency manoeuvre to restore aircraft to straight and level at its assigned altitude. As result of terrifying episode, passengers were violently shaken and thrown. Objects were dangerous projected throughout interior of aircraft. Class members suffered serious physical and psychological injuries. Airline claimed that terrifying experience occurred when flight hit unexpected turbulence and no further explanation was offered. Plaintiff sought compensatory and punitive or exemplary damages. Motion granted. It was assumed that Warsaw Convention or Montreal Convention applied to claims. Based on assumption, there was no claim for pure psychological injuries under Conventions. It was plain and obvious that plaintiff 's claim under Conventions for pure psychological injury was legally untenable. Claim for punitive and exemplary damages was not available under Conventions. Genuine claim for aggravated damages was available under Conventions. Plaintiff 's negligence claim based on cover-up was precluded by Conventions because it was claim already covered by Conventions or was claim arising out of international carriage of air for which common law claims were precluded because Con-

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