Law Times

Page 14 OctOber 31, 2016 • Law times www.lawtimesnews.com CASELAW tive relief precluding defendants from continuing their infring- ing activities, and injunctive relief requiring delivery up and destruction of remaining in- fringing goods. SL's appeal was allowed on limited grounds that there was ambiguity concern- ing SL's involvement in one of instances. Summary trial mo- tion was directed to be remitted to trial judge for redetermina- tion in accordance with reasons. Court was to resolve ambiguity with respect to SL's involvement in one of instances of infringe- ment and re-determine quan- tum of damages. Findings, dec- larations, orders and condem- nations made against corporate defendants and SL including compensatory damages award, punitive damages award and costs award were confirmed and remained unchanged. SL was jointly and severally liable with corporate defendants for in- fringement. In all respects and at all relevant times SL was person- ally liable of infringing activities that took place in business or at premises on all four instances. At all relevant times SL was controlling mind of corporate defendants. Corporate changes did not affect SL's personal lia- bility. SL continued to use prop- erty as her own and continued to control business. Motivation behind corporate changes and transfer of ownership alleged by SL was highly questionable and they were fraudulent. There were ample evidentiary base and compelling legal reasons to find SL personally liable of all four instances of infringement. There was no cause to reduce compen- satory and punitive awards. Chanel S. de R.L. v. Lam Chan Kee Co. (Aug. 30, 2016, F.C., Luc Martineau J., T-653- 13) 270 A.C.W.S. (3d) 181. Tax Court of Canada Taxation GOODS AND SERVICES TAX Nominee of corporation was ordered to answer certain questions in discovery Parties were involved in pro- ceedings in Tax Court regard- ing tax treatment of proceeds of sale retirement residence, as business income or as capital gain in 2008 taxation year and disallowance of tax treatment of numbered corporation's newer retirement residence as replace- ment property under s. 44 of In- come Tax Act (Can.). Numbered corporation claimed it correctly reported capital gain on sale of retirement residence in its 2008 taxation year, while Minister of National Revenue maintained numbered corporation was in business of building and selling retirement residences at profit and that Minister correctly re- assessed numbered corporation to include sale of residence as income from business. Nomi- nee of numbered corporation refused to answer certain ques- tions in discovery Minister brought motion for order that questions be answered. Motion granted in part. Numbered cor- poration was not the alter ego of shareholder L, but this was not end of matter as his trading history was relevant to issue of whether amount in question was capital gain. Even if shareholder L was not party to appeal, he was shareholder and president of numbered corporation. In trading cases, in order to deter- mine intention of corporation, trading history of controlling shareholder will be taken into account. Questions relating to shareholder L's trading history were relevant. Numbered corpo- ration's representative required to answer particular question only insofar as it related to part of statement regarding banking transactions. Whether particu- lar accountant was accountant of shareholder L in 2003, related to personal affairs of L and has nothing to do with issues un- der appeal. Question regarding purpose of certain company was relevant, as corporation was wholly owned corporation of shareholder L that held shares in numbered corporation. Funds from disposition of an- other retirement residence were used to acquire land on which particular retirement residence was subsequently built, and related question might be rel- evant. Questions regarding sale transactions regarding other retirement residences related to trading pattern of shareholder and president of numbered corporation, and were relevant Question regarding whether shareholder L held minority in- terest in number of retirement residences with spouse was not relevant and did not need to be answered. Question regarding whether shareholder L was deal- ing with certain others at arm's length did not need to be an- swered. Question regarding in- corporation of companies to act as holding and operating com- panies was relevant and should be answered. Question regard- ing corporate structure should be answered in part. Question regarding controlling mind of corporation was too vague to be answered Questions regarding corporate structure and cor- porate searches needed only be answered to extent of addressing trading patterns of shareholder L. Questions related to mistress were of personal nature and not required to be answered. 1716790 Ontario Inc. v. R. (Aug. 31, 2016, T.C.C. [General Procedure], Johanne D'Auray J., 2014-2383(GST)G, 2014- 2385(IT)G) 270 A.C.W.S. (3d) 215. Unemployment Insurance ENTITLEMENT Minister determined that employment was not insurable Worker worked as bricklayer and in other roles for construction company which he had incorpo- rated and was 40 per cent share- holder. Company was incorpo- rated to allow worker to collect employment insurance. Minister of National Revenue determined that worker's employment was not insurable because employ- ment relationship was not at arm's length. Worker appealed. Appeal dismissed. Construc- tion company was incorporated to give impression that worker was employed by independent third party. Payer was purport- edly controlled by worker's fa- ther and worker's spouse, and employment relationship was deemed not to be at arm's length by s. 251(1)(a) of Income Tax Act (Can.). Evidence adduced at court did not lead to conclusion that worker and person acting at arm's length would have en- tered into substantially similar contract of employment Spouse's only duty was to maintain books and records and spouse did not take on extra duties that worker claimed. Worker's testimony was self-serving. Worker de- cided when he would work, his own rate of pay, quotes issued by payer construction company, contracts which company would accept, days and hours he would work, and casual laborers who would be hired. Worker decided direction of payer construction company's business. Stuckless v. Minister of Na- tional Revenue (Sep. 8, 2016, T.C.C. [Employment Insur- ance], Valerie A. Miller J., 2016- 1392(EI)) 270 A.C.W.S. (3d) 222. Ontario Civil Cases Administrative Law JUDICIAL REVIEW Standard of review for Civilian Police Commission's decision was reasonableness Hearing officer found police constable guilty of disciplinary offence of unsatisfactory work performance. Constable's appeal to Civilian Police Commission was allowed. Application by city police service for judicial review was allowed. Constable appealed. Appeal allowed. On appeal, court had to determine whether ap- propriate standard of review was identified and applied on appli- cation for judicial review without any deference owed by appellate court to decision of Divisional Court on judicial review. Case law established that standard of review for Commission's deci- sion was reasonableness while standard of review that Com- mission had to apply to hearing officer's decision was correctness for questions of law and reason- ableness for other questions. Sug- gestion that both hearing officer and Commission be subject to standard of reasonableness on appeal or review was not accept- ed. Apparent paradox that Com- mission need only be reasonable in being sure that hearing officer was correct on questions of law was restricted to situations where there were more than one reason- able answer to question of statu- tory interpretation. There was nothing peculiar about review- ing court deferring to tribunal's assessment of whether decision- maker answered question cor- rectly, as its function was con- cerned mostly with justification, transparency and intelligibility within decision-making process. Objection that reasonableness standard resulted in no impetus for Commission to determine if hearing officer was correct rested on questionable proposition that it would only be accountable through intense level of judicial scrutiny. In any event, standard of review by which Commission was made answerable was not settled by efficacy but by discern- ing legislative intent. There was no justification for Commis- sion's argument that it owed no deference to decision of hearing officer on questions of fact, as ex- istence of statutory power to hold de novo hearing did not mean that correctness was standard of review when that power was not exercised. Ottawa Police Services v. Diafwila (Aug. 16, 2016, Ont. C.A., K. Feldman J.A., J.C. MacPherson J.A., and B.W. Mill- er J.A., CA C60683) Decision at 250 A.C.W.S. (3d) 507 was re- versed. 270 A.C.W.S. (3d) 205. Appeal PROCEDURE Motion to quash appeal on jurisdictional ground was heard before appeal Plaintiffs brought undertaking and refusals motion that was largely unsuccessful. Plaintiffs sought leave to appeal decision to Divisional Court, which was refused. Plaintiffs appealed de- nial of leave to appeal. Defen- dants sought to quash appeal in separate motion on grounds that court lacked jurisdiction. Defen- dants brought motion to extend time to deliver their responding materials for plaintiffs' appeal; plaintiffs brought cross-motion to have motion to quash heard at same time as appeal. Motion granted; cross-appeal dismissed. Where basis for motion to quash was that court lacks jurisdic- tion to hear appeal, motion was heard before appeal. Defendants were granted 60 days to deliver their materials. Yim v. Song (Aug. 24, 2016, Ont. C.A., B.W. Miller J.A., In Chambers, CA M46733, M46813, (C61980)) 270 A.C.W.S. (3d) 9. Employment DUTIES OF EMPLOYER Employer had overall discretion to refuse approval of rehabilitation plan Plaintiff employee was involved in motor vehicle accident and she suffered injuries. Employee worked for defendant employer and sought both short-term and long-term disability ben- efits through plan managed by defendant insurer. Except for one-month period, employee re- ceived benefits under plan. Em- ployee brought action against defendants seeking payment of missing one-month long-term disability benefits, payment of cost of two treatment plans and damages for mental distress, aggravated and punitive dam- ages. Employer brought motion for summary judgment to dis- miss employee's claims. Motion granted and action dismissed. Employee appealed. Appeal dismissed. Main issues on ap- peal were whether employer had overall discretion to refuse approval of rehabilitation plan, whether employer's refusal was reasonable and whether applica- tion judge's reasons were insuffi- cient. Application judge did not err in deciding first two issues in favour of employer. While reasons might have been more thorough, they were adequate. Bonilla v. Great-West Life Assurance Co. (Sep. 9, 2016, Ont. C.A., Laskin J.A., Feld- man J.A., and Hourigan J.A., CA C61971) Decision at 264 A.C.W.S. (3d) 627 was affirmed. 270 A.C.W.S. (3d) 100. Family Law CUSTODY Mother wrong fully retained children in Canada Parties were married in 2000 and separated in April 2013. Parties had two children. In April 2013, parties agreed that mother would take children from Germany to Ontario where they would attend school until August 2014. Father obtained order declaring that Germany was children's habitual residence and that they were wrongfully retained in Ontario by mother. Mother successfully appealed. Father appealed. Appeal al- lowed. Judgment of Divisional Court was set aside and order of application judge was restored. Elements of art. 3 of Hague Convention had been satisfied: children habitually resided in Germany immediately prior to wrongful retention on Aug. 15, 2014. Retention breached father's custody rights under German law, and father was ex- ercising custody rights at time of retention. Mother wrongfully retained children in Canada after Aug. 15, 2014. None of ex- ceptions under Hague Conven- tion applied. Therefore, children must be returned to habitual residence. Divisional Court's decision would, if upheld, un- dermine purpose and proper operation of Hague Convention. To find that child's habitual resi- dence can be changed by unilat- eral actions of one parent dur- ing period of time-limited con- sensual absence undermined purpose and efficacy of care- fully crafted scheme to deal with child abduction and wrongful retention. It rendered time-lim- ited travel consents essentially meaningless, and would allow one parent to lay foundation for child abduction by obtaining defined, temporary consent of other parent to travel with child. Balev v. Baggott (Sep. 13, 2016, Ont. C.A., Laskin J.A., Robert J. Sharpe J.A., and B.W. Miller J.A., CA C62066) Deci- sion at 261 A.C.W.S. (3d) 843 was reversed. 270 A.C.W.S. (3d) 128.

• Cover