Law Times

Law Times • November 23, 2015 Page 13 www.lawtimesnews.com FEDERAL COURT OF APPEAL Constitutional Law DISTRIBUTION OF LEGISLATIVE AUTHORIT Y Labour relations of First Nation Police Service were provincially regulated First Nation established First Nation Police Service under management of applicant, to provide effective, efficient and culturally appropriate police services for people of First Na- tion area. Canada Industrial Relations Board, acting under Canada Labour Code, certi- fied respondent as bargaining agent for two bargaining units of employees working for ap- plicant. Certification orders were based, in part, on view that labour relations of First Nation Police Service were federally regulated. After Supreme Court of Canada released two deci- sions, applicant thought that labour relations of First Nation Police Service might be provin- cially regulated and it applied to board to set aside certifica- tion orders. Board upheld cer- tification orders, finding that labour relations of First Nation Police Service were federally regulated. Applicant applied for judicial review. Application granted. There was presump- tion that labour relations were provincially regulated. In order to rebut presumption, nature, operations and habitual activi- ties of entity had to be exam- ined to determine whether it constituted federal undertak- ing. Essential nature and func- tion of First Nation Police Ser- vice was to provide policing services and was matter within provincial sphere. Presumption had not been rebutted. Status of being First Nation constable f lowed directly from Police Services Act and not any fed- eral law. First Nation constables had powers of police officer for purposes of carrying out duties. Appointment of First Nation constable allowed them to ex- ercise policing authority only in Ontario, but First Nation Police Service was not limited to po- licing on reserves. Recruits had to train through Ontario Police College. First Nation constables performed essentially same functions as Ontario Provin- cial Police officers. First Nation Police Service was function- ally integrated with OPP. First Nation Police Service was in- dependent and autonomous from First Nation. Fact that First Nation Police Service had to deliver policing services in culturally sensitive way did not rebut presumption that labour relations of First Nation Police Service were provincially regu- lated. First step of inquiry was conclusive. Nature, habitual activities and daily operations of First Nation Police Service were provincial in nature and labour relations of First Nation Police Service were provincially regulated. Board did not have authority to make certification orders and they were set aside. Nishnawbe-Aski Police Service Board v. PSAC (Oct. 2, 2015, F.C.A., J.D. Denis Pelletier J.A., David Stratas J.A., and Wyman W. Webb J.A., File No. A-432- 13) 258 A.C.W.S. (3d) 190. Taxation INCOME TAX Decision striking portions of taxpayer's notice of appeal was reversed in part Predecessor corporations made deductions for payments to em- ployees for surrender of share options. Minister assessed tax- payer under Income Tax Act, denying deductions as current expense. Taxpayer appealed. Minister's motion to strike certain portions of claim was granted in part. Certain por- tions of notices of appeal struck. Trial judge found sole issue set out in notices of objection was whether taxpayer could deduct payments on current account. Trial judge found notices of objection proposed one reason why deduction should be per- mitted but that did not preclude corporation from raising other reasons in its notices of appeal. Trial judge found some alternate arguments by corporation were new reasons, not new issues. Trial judge found arguments that payments were deductible on income account due to op- eration of s. 20(1)(e) of Tax Act were alternative reasons. Trial judge found argument that pay- ments were deductible under ss. 20(1)(b) and 111(5.2) was new is- sue and not alternate argument, as operation of s. 111(5.2) would entitle taxpayer to deductions unrelated to payments at issue. Trial judge found s. 111(5.2) was not optional and was required to be claimed if preconditions met. Trial judge found taxpayer not entitled to make arguments based on s. 20(1)(b) on ground that minister assessed large cor- poration in respect of certain issues, large corporation ob- jected and minister confirmed assessment, but on different basis trial judge found minis- ter had not abandoned original basis of assessment. Trial judge found relief sought was ad- equately described as required by large corporation rules in s. 165(1.11)(b) of Act. Taxpayer and Crown appealed. Appeal by taxpayer allowed, appeal by Crown dismissed. Taxpayer entitled to appeal. Taxpayer was seeking to claim deduction under s. 9 of Act in computing income or loss of its predeces- sors, and surrender payments were not on account of capital and therefore deduction of such payments would not have been denied as result of s. 18(1)(b) of Act. Notice of objection did not encompass alternative and in- consistent arguments related to s. 20(1)(b) and (e) of Act, which were new arguments. New de- ductions claimed were based on different premise (payments on account of capital versus cur- rent expense) and on different statutory provisions. However, Canada Revenue Agency act- ing on behalf of minister, re- sponded in relation to merits of submissions with respect to s. 20(1)(b) and (e) and minister, in notices of confirmation, stating that basis of objection included argument that predecessors of taxpayer should be entitled to deduction under s. 20(1)(b) of Act. Minister explicitly accept- ed that issue related to s. 20(1) (b) of Act was part of objection. Minister accepted additional submissions at objection stage and treated them as part of ob- jection, and submissions should be considered to be part of no- tice of objection for purposes of s. 169(2.1) of Act. Devon Canada Corp. v. R. (Oct. 8, 2015, F.C.A., Johanne Tru- del J.A., Wyman W. Webb J.A., and Donald J. Rennie J.A., File No. A-388-14, A-389-14, A-390- 14, A-391-14) Decision at 243 A.C.W.S. (3d) 758 was reversed in part. 258 A.C.W.S. (3d) 238. FEDERAL COURT Contempt of Court PUNISHMENT Contemnors fined $50,000 for continuing to use trade-mark Judge ruled that respondent in- fringed applicant's trademark HIGH TIMES, contrary to ss. 19 and 20 of Trademarks Act. Judge determined that respon- dent directed public attention to its goods, services or business in way that caused or was likely to cause confusion between its goods, services or business and those of applicant, contrary to s. 7(b) of Act. Judge permanently enjoined respondent from sell- ing, distributing or advertising goods or services in associa- tion with applicant's registered trademark or trademark likely to be confused with that of ap- plicant. Respondent continued to use trademark and name HIGH TIMES. Respondent pleaded guilty to five counts of contempt. This was to deter- mine penalty. Acts of contempt were objectively and subjec- tively serious. Respondent's behaviour challenged judicial authority of court and public's confidence in administration of justice. Aggravating factors included seriousness of acts of contempt and unexplained de- lay in compliance. Mitigating factors included this being first offence, guilty plea and fact that respondent's business was rela- tively small and unsophisticat- ed. Respondent had not accept- ed responsibility or apologized. Applicant was diligent in efforts to rectify contemptuous con- duct, which warranted award of solicitor-client costs. Applicant was awarded solicitor-client costs of $62,500, payable jointly and severally by respondent and officer and director. Given his- tory of trademark infringement and primary consideration of general deterrence, it was ap- propriate to order respondent and officer and director were to pay fine of $50,000 on joint and several basis. Trans-High Corp. v. Hightimes Smokeshop and Gifts Inc. (Jul. 27, 2015, F.C., Simon Fother- gill J., File No. T-1004-13) 258 A.C.W.S. (3d) 57. Elections POLITICAL PARTIES Conservative Party of Canada was not legal entity that exercised pow- ers by or under act of Parliament In underlying proceeding ap- plicant challenged decisions of respondent, Conservative Party of Canada, disqualifying him as candidate for nomination to run under Conservative Party banner in Kanata-Carleton riding. Applicant brought mo- tion for order enjoining Con- servative Party of Canada from conducting proposed candidate nomination meeting for federal riding of Kanata-Carleton. Mo- tion dismissed. Federal Court's jurisdiction to grant prerogative relief that applicant sought was limited to decisions made by federal board, commission or other tribunal. Political parties were voluntary associations. Conservative Party of Canada was not legal entity that exer- cised powers by or under act of Parliament. Decisions applicant sought to challenge were private matters that did not constitute decisions of federal board, com- mission or other tribunal. Fed- eral Court had no jurisdiction to grant interim relief that was sought and it had no jurisdic- tion to deal with underlying ap- plication for judicial review. Olumide v. Conservative Party of Canada (Jul. 22, 2015, F.C., R.L. Barnes J., File No. T-970- 15) 258 A.C.W.S. (3d) 71. Environmental Law ENFORCEMENT Determination that signifi- cant adverse environmental effects from construction of dam and hydroelectric generat- ing station were justified was upheld on judicial review Provincial hydro company pro- posed to construct dam and hydroelectric generating station on Peace River. Dam would re- sult in Peace River Valley being f looded for some 83 kilometres, creating reservoir with surface area of about 9,330 hectares. Federal Minister of Environ- ment made determination under s. 52(1) of Canadian En- vironmental Assessment Act, 2012, that significant adverse environmental effects would likely result from construction of this project. Governor in Council made determination under s. 52(4) of Act that these significant adverse environ- mental effects were justified. Property owners in Peace Val- ley region brought application for judicial review. Application dismissed. Standard of review was reasonableness since con- sultation process and adequacy of consultation was question of mixed fact and law, and GIC's decision attracted considerable deference. GIC's decision was reasonable despite apparent focus on Aboriginal concerns. It was reasonable to presume that all relevant information considered by minister could be imputed to have been consid- ered by GIC. Moreover, Order in Council was not considered to be exhaustive in indicating what was considered by GIC. Entire record should be re- viewed to determine if decision was unreasonable, and should be read together in context of evidence and process to serve purpose of showing whether result fell within range of rea- sonable, possible outcomes. In addition, press release issued by minister after Order in Council was released could be accepted and acknowledged as indica- tion of considerations of GIC. This contemporaneous press release at very least was infor- mative and indicative of consid- eration of economic issues and concerns. While reasons pro- vided by GIC could have been better articulated and more transparent, they were within reasonable boundaries and re- quirements for GIC reasons. 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 BestCase and other electronic resources from carswell.com. To subscribe, please call 1-800-387-5164.

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