Law Times

Law Times • June 26, 2017 Page 13 www.lawtimesnews.com CASELAW Supreme Court of Canada Criminal Law CHARTER OF RIGHTS AND FREEDOMS Unreasonable denial of bail [s. 11(e)] Legislated form of release and specific terms of release can be unreasonable and unconstitutional Respondent accused, KA, was Ontario resident, but he spent much of his time in Michigan and had no assets in Canada. At KA's initial bail hearing, justice of the peace denied his release. KA sought review of detention order under s. 520 of Crimi- nal Code of Canada. Bail re- view judge would have released KA if he could have imposed both surety and cash deposit as release conditions in order to satisfy f light risk and safety concerns. In subsequent bail review application, KA success- fully challenged constitution- ality of s. 515(2)(e). Bail review judge held that only viable con- ditions of release for KA would be large cash deposit and surety supervision but geographical limitation in s. 515(2)(e) pre- vented him from granting bail on those terms. He found that s. 515(2)(e) violated right not to be denied reasonable bail with- out just cause under s. 11(e) of Canadian Charter of Rights and Freedoms. He concluded that geographical restriction uncon- stitutionally denied KA bail, severed and struck down geo- graphical limitation in s. 515(2) (e) and ordered KA's release with surety and cash deposit of $100,000. Crown appealed. Appeal allowed. Right not to be denied bail without just cause imposes constitutional stan- dard that must be met for denial of bail to be valid. Right to rea- sonable bail relates to terms of bail, including quantum of any monetary component as well as restrictions imposed on ac- cused for release period. Section 515(2) of Code establishes only legal forms of pre-trial release, such as surety release or release with recognizance. However, it is justice of peace or judge who ultimately decides which form of release to order in given case, and he or she also has discre- tion under s. 515(4) of Code to impose terms that are specific to circumstances of accused. Both legislated form of release and specific terms of release ordered by justice of peace or judge can be unreasonable and therefore unconstitutional. Bail review judge erred by requiring cash deposit with surety, one of most onerous forms of release, even though KA had offered surety with monetary pledge. If bail re- view judge had applied bail pro- visions properly, KA could have been granted reasonable bail. Given that s. 515(2)(e) of Code did not have effect of denying KA bail, it could not be conclud- ed that it denied him bail with- out " just cause." Thus, s. 11(e) right not to be denied reason- able bail without just cause was not triggered. Fact that cash bail was not option in KA's case did not have effect of denying him bail. Because Crown had justi- fied monetary condition of re- lease, KA or his sureties should have been allowed to pledge money rather than being re- quired to deposit money with court. Given Crown's consent, it was ordered that KA's cash- plus-surety release ordered by bail review judge be replaced with cash-only release on same terms as those that bail review judge imposed. R. v. Antic (2017), 2017 Car- swellOnt 8134, 2017 Carswel- lOnt 8135, 2017 SCC 27, 2017 CSC 27, McLachlin C.J.C., Abel- la J., Moldaver J., Karakatsanis J., Wagner J., Gascon J., Côté J., Brown J., and Rowe J. (S.C.C.). Federal Court of Appeal Tax INCOME TAX Administration and enforcement Minister imposing gross negligence penalties against taxpayer for failing to review tax return In 2007, two holding compa- nies owned and controlled by taxpayer paid him dividends, resulting in taxable dividends. Accountants failed to include dividends in taxpayer's 2007 tax return, which taxpayer did not read or review before signing. Minister imposed gross negli- gence penalties against taxpay- er. Tax Court judge dismissed taxpayer's appeal on ground that penalties were warranted because of wilful blindness to actual content of tax return. Judge held that taxpayer assent- ed to, participated or acquiesced in omission of dividends in his tax return in circumstances amounting to gross negligence. Size of omitted dividends was objectively massive, and related to unique and planned event of retirement. Taxpayer's failure to review return was departure from his usual practice. Judge found that warning signs of omitted dividends were suf- ficient to strongly suggest that taxpayer initiate specific in- quiry and review of tax return, and yet taxpayer averted his eyes to any warning. Taxpayer ap- pealed. Appeal dismissed. Judge articulated correct legal test for establishing gross negligence. Minister did not need to estab- lish that taxpayer knowingly made omission. Judge did not make any palpable and overrid- ing error with respect to find- ings, which supported finding of wilful blindness amounting to gross negligence. Taxpayer did not demonstrate any pal- pable and overriding error in judge's appreciation of totality of evidence. Melman v. R. (2017), 2017 CarswellNat 1808, 2017 FCA 83, Eleanor R. Dawson J.A., Webb J.A., and Rennie J.A. (F.C.A.); af- firmed (2016), 2016 CarswellNat 3044, 2016 TCC 167, Randall S. Bocock J. (T.C.C. [General Procedure]). INCOME TAX Employment income Taxpayer required to report cost of securities using exchange rate on date options exercised Taxpayer exercised stock op- tions at profit and was deemed to have received employment benefit in taxation years in which they were exercised. Tax- payer exercised option via bro- ker-assisted transaction with ef- fect that shares were delivered to broker and immediately sold on taxpayer's instructions. For 2010 and 2012 taxation years, taxpay- er calculated cost base with ref- erence to Canada/US exchange rate in effect on date options were granted and proceeds of sale on basis of exchange rate in effect on date of exercise. Min- ister of National Revenue reas- sessed taxpayer on basis that he was required to report cost of securities acquired and convert- ed into Canadian dollars using exchange rate on date stock op- tions were exercised. Tax Court judge dismissed taxpayer's ap- peal and found that under s. 7(1) of Income Tax Act, employment benefits received by taxpayer in US dollars were to be calculated by converting Canadian dollar value of exercise price and fair market value of shares at time of exercise, using exchange rate in effect on date options were exercised. Taxpayer appealed. Appeal dismissed. Judge did not make error in law in upholding Minister's reassessments and correctly applied relevant legal principles and case law. Tax im- plications for exercise of stock options, including conversion of foreign denominated amounts, were triggered on their exercise date. No taxable transaction oc- curred when stock options were granted to taxpayer since he did not acquire taxable benefit at that time. Taxable transac- tions occurred when taxpayer exercised his stock options in 2010 and 2012. Only when tax- payer exercised stock options was he required under s. 261(2) (b) of Act to calculate his re- portable benefits by converting exercise price, along with fair market value of shares at time he exercised his options, using exchange rate applicable on date of exercise. Ferlaino v. R. (2017), 2017 CarswellNat 2235, 2017 FCA 105, A.F. Scott J.A., Boivin J.A., and de Montogny J.A. (F.C.A.); affirmed (2016), 2016 Carswell- Nat 1389, 2016 CarswellNat 5249, 2016 TCC 105, 2016 CCI 105, Guy R. Smith J. (T.C.C. [In- formal Procedure]). Federal Court Aboriginal Law GOVERNMENT OF ABORIGINAL PEOPLE Elections First Nations electoral officer violating procedural fairness 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 WestlawNext Canada. To subscribe, please access carswell.com or call 1-800-387-5164. 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