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Page 14 August 22, 2016 • LAw times www.lawtimesnews.com CASELAW in assessment, some of expenses should be allowed to extent they matched taxpayer's commission income. He did not have regard to particular expenses and tax- payer's explanation for them. Judge did not ask self question of whether actual expenses were unreasonable and what reduc- tion in claimed expenses might be necessary to be reasonable. Judgment of Tax Court of Cana- da set aside with respect to busi- ness losses and returned to Tax Court of Canada for redetermi- nation of s. 67 issue. Peach v. R. (June 8, 2016, F.C.A., Johanne Trudel J.A., Stra- tas J.A., and Boivin J.A., A-406- 14) 267 A.C.W.S. (3d) 482. Federal Court Aboriginal Peoples CROWN RELATIONSHIP Expropriation under s. 35 of Indian Act (Can.) did not require Band's consent Pipeline right-of-way through reserve of Indian Band was granted in 1955 to third-party company, through indenture. Respondent Minister of Indian Affairs and Northern Develop- ment consented to assignment of indenture to respondent com- pany, executing assignment con- sent agreement. Applicant Band and its chief applied for judicial review. Application dismissed. Minister owed fiduciary duty to Band in deciding whether to consent to assignment of inden- ture and it also owed duty of good faith to company arising under indenture. Duty of good faith owed to company was subordi- nate to fiduciary duty owed to Band. Test used in expropriation under s. 35 of Indian Act (Can.) applied to assignment of interest that arose from expropriation. Minister must first determine that assignment of instrument was in public interest and then must ensure that Band's interest in reserve was only minimally impaired. Minister did not have fiduciary duty until second stage of analysis, where consultation with Band was required. Section 35 did not require Band's con- sent. Expropriation was made in proper manner for lawful pur- pose and was in public interest. Minister's consent to assignment was continuation of initial rec- ognition of public interest aris- ing from expropriation. Minis- ter's consent to assignment was minimal impairment of Band's use and enjoyment of its land. Assignment of indenture did not increase impairment of Band's use of reserve land. Minister en- gaged Band many times during administrative proceeding. Min- ister discharged fiduciary duty owed to Band. Minister's deci- sion to consent to assignment of indenture was justifiable, trans- parent and intelligible and it met standard of reasonableness. Coldwater Indian Band v. Canada (Minister of Indian Affairs and Northern Devel- opment) (May. 30, 2016, F.C., E. Heneghan J., T-133-15) 267 A.C.W.S. (3d) 255. Tax Court of Canada Taxation GOODS AND SERVICES TAX Registrant was required to pay Goods and Services Tax on annual resort fee Canadian Developer created registrant CI to facilitate ad- ministration of vacation homes in resorts in Canada, US and Mexico as part of vacation home ownership program. Ca- nadian Developer transferred its interests in Canadian vaca- tion homes, and US Developer transferred its interests in vaca- tion homes in US and Mexico, to registrant pursuant to bare trust agreements in consideration of occupancy rights. Developers sold resort points for right to oc- cupy time in vacation homes to point purchasers. Members of registrant, including point pur- chasers and Developers, paid annual resort fee to registrant, which funded annual costs of registrant, and included vaca- tion home operating costs, costs of operating program, and cor- porate costs of registrant. Reg- istrant billed point purchaser annually for full amount and developers monthly for por- tion of fee. Minister of National Revenue assessed registrant in respect of its monthly reporting period for October for each year from 2002 to 2007 on basis that annual resort fee was subject to Goods and Services Tax (GST) as consideration for taxable sup- ply of intangible personal prop- erty. Registrant appealed. Ap- peal dismissed. Registrant was required to pay GST on annual resort fee. There was no agency relationship between registrant and each member in respect of vacation homes expenses. An- nual resort fee was paid as con- sideration for supply of service rendered by registrant to mem- bers as registrant agreed to use funds to pay operation costs. Registrant made single supply of services that related directly or indirectly to real property situat- ed outside of Canada, real prop- erty situated in Canada, and things other than real property such as operating costs. Since single supply made by registrant related at least partly to things other than real property, place of supply of service was deemed, under ss. 142(1)(g) and 142(2)(g) of Excise Tax Act (Can.), to be made in Canada since registrant performed annual services par- tially in Canada. GST applied to all of annual resort fee paid by members. Amount assessed by Minister was less than what should have been assessed given that registrant's net tax for each October included GST on full amount of annual resort fee pay- able by purchasers who owned resort points on September 30 and GST on one-twelfth of an- nual resort fee payable by Devel- opers. Canada Revenue Agency used method to determine reg- istrant's net tax for its October reporting periods that was not consistent with definition of net tax in s. 225(1) of Act and did not comply with ss. 152 and 168 of Act. Club Intrawest v. R. (June 9, 2016, T.C.C. [General Proce- dure], Steven K. D'Arcy J., 2012- 3401(GST)G) 267 A.C.W.S. (3d) 473. Ontario Civil Cases Aboriginal Peoples CROWN RELATIONSHIP Honour of Crown stands apart from law of negligence Plaintiff mining company had entered series of agreements with SL First Nation (SL FN") regarding three groups of claims, including T Lake. KI First Na- tion ("KI FN") had made claim over land that overlapped with that of SL FN. Ontario issued withdrawal order regarding land claimed by KI FN. In so doing, it took into account interests of SL FN and made sure that lands subject to T Lake claim were not included. Agreement between plaintiff and SL FN broke down in 2012. Plaintiff brought ac- tion against Crown for breach of duty. Action dismissed. Honour of Crown stands apart from law of negligence. Duty has arisen largely in treaty context, where Crown's honour is pledged to diligently carrying out its prom- ises. This requires Crown to act in best interest of First Nation when exercising discretionary control over specific First Nation interests. In present case, land in question was subject to Treaty 9. To extent that there were rights to be protected arising from treaty or outside treaty, Crown acts as fiduciary of First Nation. In event that interest at issue is one that attracts constitutional protection that is accompanied by fiduciary responsibilities, there can be no duty owed by Crown to plaintiff. In such cir- cumstances, loyalty of Crown is to First Nation. It cannot be that Crown would, at same time, owe independent duty to mining company to work to protect its exploration rights in face of le- gitimate constitutional concern of First Nation. Crown would be in untenable position of be- ing required to serve two oppos- ing masters, each insisting it can rely on one of two contradictory responsibilities. In such circum- stances, it would not be mat- ter for tort law. Constitutional rights and concerns of First Na- tion would govern. As fiduciary, Ontario would have been "un- der a duty to act for the benefit of, (other FN) on matters within the scope of the relationship". Ontario's fiduciary responsibili- ties of trust and loyalty to FN do not allow for corresponding duty to any company that holds min- ing rights that challenge treaty or aboriginal rights of First Nation. Underlying result was preserva- tion of whatever claim KI FN had to rights in respect of lands affected by mining leases and claims of nearby property. Up- shot of constitutional protec- tion of interests of First Nations, founded in honour of Crown, with or without accompanying fiduciary duty, is that duty to consult, which is expression of protection, is responsibility owed to First Nations. It was not owed to third parties and provided no legally enforceable benefit to them. Northern Superior Resourc- es Inc. v. Ontario (May. 25, 2016, Ont. S.C.J., Lederer J., CV-13- 00491444-00) 267 A.C.W.S. (3d) 493. Bankruptcy and Insolvency PROPERTY Motion judge's finding was palpable and overriding error C group of companies oper- ated marina located on premises owned by landlord 212 Inc.. C group became insolvent. Re- ceiver was appointed and con- tinued to operate marina. When marina's lease expired, 212 Inc. leased location to new tenant and brought motion to establish its right to occupation rent from re- ceiver. Motion judge determined receiver was not obligated to pay occupation rent. 212 Inc. ap- pealed. Appeal allowed. Receiver occupied marina and was liable to pay occupation rent. Receiver deprived 212 Inc. of its rights of use of premises in manner that constituted occupation. Motion judge's finding to contrary was palpable and overriding error. Where deprivation of use is tan- tamount to actual occupation, liability to pay occupation rent is engaged. Motion judge erred by focusing primarily on "depriva- tion of use", when there was ad- mitted possession and evidence of actual occupation, and by conf lating "deprivation of use of premises" in real property sense with "deprivation of use" in more general cost/benefit or economic sense. Presumption in favour of obligation to pay rent had not been rebutted, and no equitable considerations applied. Crate Marine Sales Ltd., Re (June 3, 2016, Ont. C.A., Alexandra Hoy A.C.J.O., R.A. Blair J.A., and L.B. Roberts J.A., CA C61243) Decision at 259 A.C.W.S. (3d) 278 was reversed. 267 A.C.W.S. (3d) 272. Contracts FRANCHISE AGREEMENTS Determination of who was franchisor's associate required full factual record US auto manufacturer's pre- decessor declared bankruptcy. As part of court-supervised restructuring, manufacturer received assets of bankrupt pre- decessor company and bailouts from, among others, Canadian and Ontario governments. Canadian dealers brought ac- tion against manufacturer and Canadian subsidiary alleging manufacturer's preferential financial support to US deal- ers constituted breach of duty of good faith in performance of franchise agreements and breach of Arthur Wishart Act (Franchise Disclosure), 2000 (Ont.). Manufacturer and sub- sidiary brought successful mo- tion under R. 21 of Rules of Civil Procedure (Ont.) to strike claims. Motion judge dismissed entire claim against manufac- turer without leave to amend, finding, among other things, that manufacturer was not par- ty to franchise agreement and could not be held liable under s. 3(2) of Act or at common law for alleged breaches of franchise agreement by subsidiary. Deal- ers appealed. Appeal allowed with costs fixed at $20,000. It was not plain and obvious ac- tion that manufacturer was not franchisor's associate. Motions judge approached motion as if it were motion for summary judgment and required dealers to demonstrate that they would succeed rather than requiring manufacturer to demonstrate that dealers could not possi- bly succeed. Interpretation of "party" in s. 3 would likely have important precedential value and answer should be decided on full record. Determination of duties owed under remedial legislation such as Act involved important questions of legal interpretation, were subject of limited jurisprudence, and re- quired factual record. Interpre- tation of "party" and extent of duty in s. 3 would likely have important precedential value and answer should be decided on full record, as did question of whether level of control alleged and special obligations owed in context of franchise relationship could open door for imposition of common law duty. Determi- nation of who was franchisor's associate required full factual record. Motion judge concluded that manufacturer could not be "directly involved in grant of franchise" because grant of franchise occurred before man- ufacturer was in existence, but conclusion was based on im- proper treatment of document on R. 21 motion as evidence. Conclusion required trial based on full record, not R. 21 motion. Addison Chevrolet Buick GMC Ltd. v. General Motors of Canada Ltd. (May. 3, 2016, Ont. C.A., Doherty J.A., G. Par- du J.A., and M.L. Benotto J.A., CA C60644) Decision at 254 A.C.W.S. (3d) 334 was reversed. 267 A.C.W.S. (3d) 329. Corporations OPPRESSION Oppression claim was rejected G lent $6.5 million to compa- nies including SG Group and A Ltd., which were controlled by G's friend, real estate developer K. Relationship between G and K soured. After G threatened litigation, parties reached settle- ment involving various pay- ments and transactions. Several of K's companies went bankrupt. Trustee in bankruptcy sought to set aside transactions arising from settlement, and challenged transactions under oppression provisions in s. 248 of Business

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