Law Times

Law Times • augusT 22, 2016 Page 13 www.lawtimesnews.com CASELAW 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. Supreme Court of Canada Courts JURISDICTION Dispute had sufficient connection to contract made in Ontario Class action was certified in On- tario on behalf of terminated dealerships by defendant GMCL as result of financial crisis and auto bailout in summer of 2009 as well as against Cassels Brock, who acted as counsel for Cana- dian Automobile Dealers Assn., for failing to provide appropriate legal advice regarding Winding- Down Agreements (agreements) presented by GMCL. It was found that agreements were sufficiently connected with tortious claim against out of province lawyers to raise presumption of real and substantial connection between subject matter and Ontario and Ontario was most appropriate and convenient forum. Chal- lenge to Ontario's jurisdiction was dismissed. Quebec law firms appealed to Supreme Court of Canada. Appeal dismissed. Dis- pute had sufficient connection to contract made in Ontario. Local lawyers' provision of legal advice brought them within scope of contractual relationship between GMCL and dealers. Lapointe Rosenstein Mar- chand Melançon LLP v. Cassels Brock & Blackwell LLP (July 15, 2016, S.C.C., McLachlin C.J.C., Abella J., Cromwell J., Karakat- sanis J., Wagner J., Gascon J., and Côté J., 36087) Decision at 242 A.C.W.S. (3d) 88 was affirmed. 267 A.C.W.S. (3d) 340. Employment WRONGFUL DISMISSAL Labour Code provisions offered statutory alternative to common law of dismissal Employee was dismissed with- out cause after four-and-one-half years' employment, and given six months' pay. Employee brought successful unjust dismissal com- plaint under s. 240 of Canada Labour Code. Adjudicator found that, as matter of statutory inter- pretation, Code only permitted dismissals for just cause. Employ- er brought successful application for judicial review. Employee's appeal to Federal Court of Ap- peal was dismissed. Employee appealed. Appeal allowed. Stan- dard of review was reasonable- ness, and issue was whether adju- dicator's interpretation of ss. 240 to 246 of Code was reasonable. Purpose of statutory scheme was to ensure that non-unionized federal employees would be en- titled to protection from being dismissed without cause under Part III of Code. Provisions of- fered statutory alternative to common law of dismissals, and to align protection from unjust dismissal for non-unionized fed- eral employees with those avail- able to unionized employees. If employer could dismiss without cause under Code by providing severance pay, no role would exist for plurality of remedies available to adjudicator. Wilson v. Atomic Energy of Canada Ltd. (July 14, 2016, S.C.C., McLachlin C.J.C., Abella J., Cromwell J., Moldaver J., Kara- katsanis J., Wagner J., Gascon J., Côté J., and Brown J., 36354) De- cision at 249 A.C.W.S. (3d) 347 was reversed. 267 A.C.W.S. (3d) 349. Federal Court of Appeal Taxation INCOME TAX No basis for rejecting taxpayer's use of mark to market accounting Taxpayer traded in purchased and written foreign exchange option contracts to reduce ex- posure to foreign currencies. Taxpayer included option con- tracts in income, valued at end of taxation year on mark to market basis that recognized changes in market value as gain and loss, claiming losses exceeding $91 million. Minister assessed tax- payer under Income Tax Act (Can.) on basis that contracts should be included and valued only when finally realized. Tax- payer's appeal was allowed in part, on basis that realization principle applied except for its purchased foreign exchange op- tion contracts that were found to constitute inventory, and Crown was awarded costs. Taxpayer appealed. Appeals allowed. Tax Court judge's finding that real- ization was overarching prin- ciple that applied in absence of Act provision authorizing or requiring application of differ- ent method directly contradict- ed precedents establishing that other methods of computing in- come could be used where they provided more accurate pic- ture of income. Taxpayer made prima facie demonstration that mark to market accounting pro- vided accurate ref lection of in- come and Crown did not show that realization produced better picture of taxpayer's income. There was no basis for rejecting taxpayer's use of mark to market accounting in computing in- come. There was no doubt that Act allowed intangible property to be treated as inventory or that, because written options only embodied liability, they were not "property" and could not form part of "inventory". Require- ment that qualifying property be "held for sale" had to be read into definition of "inventory" under governing authority, such that taxpayer's foreign exchange options did not qualify as inven- tory as they were not for sale. Purchased and written options impacted on computation of in- come and had to be recognized in service of goal under s. 9 of Act to provide accurate picture of that income. Taxpayer was entitled to use mark to market method of accounting to com- pute income derived from for- eign exchange option contracts and was entitled to costs before Tax Court and appeal. Kruger Inc. v. R. (June 22, 2016, F.C.A., Marc Noël C.J., A.F. Scott J.A., and Yves de Montigny J.A., A-296-15, A-195-16) Deci- sions at 252 A.C.W.S. (3d) 868 and 262 A.C.W.S. (3d) 532 were reversed. 267 A.C.W.S. (3d) 485. Canada Revenue Agency officials did not act maliciously and unlawfully Accused was payroll bookkeep- er enlisted by disabled patients to make proper tax deductions. Accused's clients had accrued liabilities to Canada Revenue Agency (CRA) exceeding one million dollars. Accused was charged under Criminal Code (Can.) with fraud, making false or deceptive statements in tax return, and tax evasion. Accused brought action against CRA for damages for negligence, breach- es of Canadian Charter of Rights and Freedoms, misfeasance in public office, defamation, and malicious prosecution. Federal Court judge dismissed action on basis that none of causes of ac- tion were established. Judge held that, because prosecution of ac- cused had not been concluded, tort of malicious prosecution was not available to him. Judge found no evidence to support pleading of defamation. Judge held that CRA officials did not act maliciously and unlawfully or violate accused's Charter rights when they tried to col- lect payroll remittance arrears from him. Judge found CRA's conduct was fair, responsible, reasonable and lawful and was sensitive to concern that its ac- tions not disrupt provision of re- spite care to those who needed it. Accused appealed. Appeal dis- missed. Judge did not make any errors, reasons were clear, and allegation of bias was dismissed. Judge's comments were instanc- es of good trial management, not bias. If there were instances of bias or unfairness, accused's counsel should have objected at initial hearing. There were no grounds to set aside judge's costs award. Hennessey v. R. (June 15, 2016, F.C.A., Johanne Tru- del J.A., David Stratas J.A., and Richard Boivin J.A., A-215-14) Decision at 242 A.C.W.S. (3d) 827 was affirmed. 267 A.C.W.S. (3d) 479. Judgment of Tax Court of Canada was set aside Taxpayer appealed from judg- ment of Tax Court of Canada affirming assessments by Minis- ter of National Revenue of 2009 and 2010 taxation years, denying losses from business and rental property. Taxpayer appealed on basis that Tax Court of Canada judge (judge) erred in conclu- sions that rental losses and busi- ness losses were properly disal- lowed. Appeal allowed in part. Judge did not err in finding that taxpayer did not have source of income and could not therefore claim losses in relation to rental properties. Judge did not make palpable and overriding errors of fact that undermined his con- clusion on issue. Appeal with respect to business losses must succeed. Oral reasons on issue of s. 67 of Income Tax Act (Can.) suffered from lack of clarity, lack of structure, and confusion. It was taken for granted that there was source of income and all ex- penses had been incurred to earn business income. Judge, without saying why, considered globally whether expenses were reason- able and accepted that, as set out THE MOST COMPLETE DIRECTORY OF ONTARIO LAWYERS, LAW FIRMS, JUDGES AND COURTS. NEW EDITION Perfectbound Published December each year On subscription $80 One time purchase $83 L88804-764 Multiple copy discounts available Plus applicable taxes and shipping & handling. (prices subject to change without notice) Visit carswell.com or call 1.800.387.5164 for a 30-day no-risk evaluation With more than 1,400 pages of essential legal references, Ontario Lawyer's Phone Book is your best connection to legal services in Ontario. Subscribers can depend on the credibility, accuracy and currency of this directory year after year. More detail and a wider scope of legal contact information for Ontario than any other source: • Over 27,000 lawyers listed • Over 9,000 law firms and corporate offices listed • Fax and telephone numbers, e-mail addresses, office locations and postal codes Includes lists of: • Federal and provincial judges • Federal courts, including a section for federal government departments, boards and commissions • Ontario courts and services, including a section for provincial government ministries, boards and commissions • Small claims courts • The Institute of Law Clerks of Ontario • Miscellaneous services for lawyers ORDER YOUR COPY TODAY! Untitled-4 1 2016-08-16 2:08 PM

• Cover