Law Times

Law Times • June 13, 2016 Page 15 www.lawtimesnews.com CASELAW sented unacceptably high secu- rity risk, and standard was low and based on assessing possibili- ties. Minister would rely on wide range of information, and it did not have to be reliable and veri- fiable to standard required for conviction. Cumulative effect of incidents identified in LERC re- port was more than sufficient to raise serious concerns about ap- plicant's judgment, trustworthi- ness and reliability. While appli- cant had no criminal record, this was not benchmark required to justify Minister's decision, and applicant did not respond to concerns he was associating with known criminals. LERC report was considered reliable and Minister's decision entitled to deference. Sidhu v. Canada (Minister of Transport) (Jan. 8, 2016, F.C., Simon Fothergill J., T-2257-14) 265 A.C.W.S. (3d) 179. Tax Court of Canada Taxation INCOME TAX Shares of corporation were not shares of "eligible corporation" and did not qualify as investment for registered retirement savings plans Taxpayer agreed to purchase 150,000 class B shares of cor- poration for $1.00 each Tax- payer opened RRSP account and transferred amount of $117,139.00 to that account Tax- payer directed RRSP to purchase 117,000 shares at $1 per share for total purchase price of $117,000 for her RRSP account. Corpo- ration's only activities in 2001 were purported purchase of Bar- badian corporation's shares and purchase of $200,000 in mar- ketable securities, and only ac- tivities in 2002 were purported purchase and disposition of Bar- badian corporation's shares, and purchase of other long term in- vestments. Minister reassessed taxpayer under Income Tax Act (Can.), finding RRSP invest- ment was not qualified invest- ment and including $117,000.00 in taxpayer's income. Taxpayer appealed. Appeal dismissed. Class B shares of corporation were not qualified investment. Corporation had 91 per cent of its assets invested in shares of Barbadian corporation which was not related eligible corpora- tion. Taxpayer did not show that fair market value of shares is- sued from treasury was less than what she agreed to pay for. Tax- payer recognized that she did not conduct any due diligence concerning corporation and she did not recall consulting invest- ment advisor concerning invest- ment. Documents showed that taxpayer's RRSP acquired shares although exact date of acquisi- tion was subject of disagreement -- Shares of corporation were not shares of "eligible corporation" within meaning of s. 5100(1) of Income Tax Regulations (Can.). Shares of Barbadian company represented over 93 per cent of corporation's assets. Principal purpose of the business carried on by corporation in Canada was to derive income from prop- erty or from deriving gains from disposition of property, so that it did not use all or substantially all of its property in "qualifying active business." As Barbadian corporation was incorporated under laws of Barbados, received International Business Licence from government of Barbados and filed its tax returns for the 2001 and 2002 taxation years reporting that it was resident of Barbados, it was not "Canadian corporation" and, therefore, was not "eligible corporation", as de- fined in s. 5100(1) of Regulations, and its shares were not shares of related eligible corporation. Class B shares were not quali- fied investment pursuant to s. 4900(12) of Regulations as they were not shares of small business corporation. Business carried on by corporation was "specified investment business", principal purpose of which was to derive income from property without having more than five full-time employees. Determination of whether particular investment is qualified investment for RRSPs is complex and perilous exercise out of reach for vast majority of Canadian taxpayers Impossible for taxpayer to make determi- nation at time of acquisition of shares due to lack of information available. Chiasson v. R. (Apr. 21, 2016, T.C.C. [Informal Procedure], Réal Favreau J., 2014-3217(IT)I) 265 A.C.W.S. (3d) 259. Ontario Civil Cases Conflict of Laws CHOICE OF LAW Given strength of connections between company and Ontario, it could not be said company was engaged in " libel tourism" Company was incorporated in US but sold cloud-based busi- ness automation software from offices around world, including Alberta office. Company had annual revenue of $5,160,400 in Canada and $3,783,474 in Ontario. Blogger wrote 18 blog posts or articles about compa- ny from home in Quebec and posted them on websites in San Francisco and Ireland and made them accessible through Twitter feeds. In 2015, blog was viewed over 105,000 times in over 160 jurisdictions, with 10,588 of viewers or readers located in Canada, presumably many of whom were in Ontario. Compa- ny brought action against blog- ger in Ontario alleging defama- tion. Blogger brought motion for order staying action. Motion dismissed. Given company's business presence, customers and reputation in Ontario, test for jurisdiction was satisfied. Al- leged tort was committed in On- tario. There was real, substantial connection between action and Ontario. There was no other fo- rum in better position to dispose fairly and efficiently of litiga- tion. Blogger failed to discharge burden of demonstrating that court should decline to exercise its jurisdiction and displace fo- rum chosen by plaintiff. Sug- gestion that Quebec or US state where company did most of its business were more appropriate forums ignored fact that forum depended not on where blog was written but where it was read. Given strength of connections between company and Ontario, it could not be said company was engaged in "libel tourism." Sciquest Inc. v. Hansen (Mar. 14, 2016, Ont. S.C.J., Lederman J., CV-15-00535613) 265 A.C.W.S. (3d) 263. Family Law COSTS In context of family law disputes, court need not find special cir- cumstances to make costs award approaching substantial indemnity After mother made false alle- gations that father had abused child, parties entered into cus- tody agreement that was in- corporated into consent order. Pursuant to agreement, father had custody of child and mother had supervised access. Agree- ment stipulated that if mother initiated confrontations or made comments pertaining to allega- tions of abuse, her access shall be suspended immediately at option of father. Agreement stipulated that father shall not relocate without first giving mother sixty days' notice, and that father shall make best ef- forts to keep child in her cur- rent school. Father gave notice to mother that he intended to move with child on basis that it was better for child to grow up in community not privy to abuse allegations. Motion judge found that order did not contemplate move in question absent varia- tion, and that there was no ma- terial change in circumstances to justify such variation. Motion judge made costs award on sub- stantial indemnity basis and in- cluded costs in respect of earlier steps in proceeding. Father ap- pealed motion judge's decision, including costs disposition. Ap- peal dismissed. Costs for earlier appearances were properly be- fore motion judge, having been adjourned from those appear- ances. Award of substantial in- demnity costs by motion judge was not improper exercise of discretion. In context of family law disputes, court need not find special circumstances to make costs award approaching sub- stantial indemnity. Forrester v. Dennis (Mar. 16, 2016, Ont. C.A., Gloria Epstein J.A., S.E. Pepall J. J.A., and C.W. Hourigan J.A., CA C61051) 265 A.C.W.S. (3d) 154. Wills and Estates ESTATE ADMINISTRATION Not an accepted principle that executor's compensation be reduced where executor had previously acted as attorney Prior to grantor's death, ap- plicant was power of attorney for property and personal care. Application for 3 per cent, or $34,024.29 compensation as power of attorney for property, and $11,679 as executor of estate. Respondent objected to certain items, on basis of limitation period and on basis applicant should not receive full com- pensation for both roles. Ap- plication granted. Continuing power of attorney was valid un- til grantor's death. Language of Substitute Decisions Act, 1992 (Ont.) did not require attorney to take compensation annually, though it was permitted, so lim- itation period not triggered each year. Applicant did not take annual compensation due to grantor's modest circumstanc- es, and triggering event was his death, of which application was brought within two years. There was no requirement for appli- cant to produce evidence of her services for grantor's authoriza- tion during his lifetime. Only obligation was to maintain ac- counts so they could be passed under SDA when grantor died. Applicant did not sleep on her rights to detriment of estate as suggested by respondent. Re- spondent's objections to certain items were without merit: pre- existing power of attorney was in effect for pre-2006 claims, 3 per cent rate was average and encompassed simple and oner- ous tasks, and there was no need for more thorough analysis, ap- plicant was realtor and entitled to take commission when she sold grantor's home, no evi- dence of double-dipping or im- proper charges, and applicant's evidence of services accepted. It was not an accepted principle that executor's compensation be reduced where she had previ- ously acted as attorney. This was modest $250,000 estate requir- ing modest services and deserv- ing of modest compensation. Armitage v. Salvation Army (Mar. 23, 2016, Ont. S.C.J., Timothy D. Ray J., Belleville CV-15-0020-00) 265 A.C.W.S. (3d) 270. Ontario Criminal Cases Appeal SENTENCE APPEAL Earned remission applies to provincial, not federal system Accused was sentenced to global four and half years' incarcera- tion following his convictions of four firearms offences related to handgun found in residence of mother of accused's children. Accused successfully appealed his conviction on charge of pos- sessing firearm knowing it was obtained by crime. Trial judge granted accused 25.5 months' credit for pre-sentence custody at rate of 1.5-to-1. However, trial judge reduced credit by two months to ref lect accused's "bad behavior." This behav- iour resulted in assault charge while accused was in custody. Accused appealed sentence. Appeal allowed in part; pre- sentence custody increased by two months. Successful appeal of fourth count (possession of weapon obtained by crime) did not result in reduction of sen- tence being appropriate. All of counts on indictment, and two resulting convictions, related to possession of Beretta. Ac- cused had long criminal record and sentence imposed was well within appropriate range, re- gardless of success of his appeal on count four. Trial judge's com- ments during sentencing sub- missions indicated that he mis- understood concept of earned remission. Earned remission applies to provincial, not federal system. In federal system, under which accused was currently serving his sentence, he was en- titled to statutory release after period determined under s. 127 of Corrections and Conditional Release Act (Can.). Statutory release date is generally day on which offender completes two thirds of his sentence. Conse- quently, credit for pre-sentence custody was increased by two months. R. v. Jean (Feb. 22, 2016, Ont. C.A., J.C. MacPherson J.A., M. Tulloch J.A., and M.L. Benotto J.A., CA C58965) Deci- sion at 118 W.C.B. (2d) 706 was varied. 129 W.C.B. (2d) 60. Evidence IDENTITY OF ACCUSED Not every case in which the Crown leads identification evidence as part of its case requires a caution Accused was convicted of several robbery-related offences. Issue at trial was identification. Ac- cused appealed his convictions on ground that trial judge erred by failing to provide instruction to jury on frailties inherent in identification evidence. Crown's case consisted of identification evidence from complainant, powerful circumstantial evi- dence that connected accused to robbery and out-of-court state- ment recanted at trial made by friend of accused that indicated that accused confessed to him. Judge was not asked to give jury any special caution in respect of identification evidence. No objection to charge was made at conclusion of judge's instruc- tions. Not every case in which Crown led identification evi- dence as part of its case required caution. Even if failure to give instruction amounted to error of law, this was clear case for application of curative proviso. Circumstantial evidence on its own was overwhelming. R. v. Oswald (Feb. 19, 2016, Ont. C.A., Doherty J.A., E.A. Cronk J.A., and H.S. LaForme J.A., CA C57068) 129 W.C.B. (2d) 3.

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