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July 24, 2017

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Page 14 July 24, 2017 • law Times CASELAW ly been given meaningful oppor- tunity to participate in minister's decision-making process and had been provided with multiple extensions of time to respond to draft recommendation of Presi- dent of Canada Border Services Agency (CBSA). There was no evidence that refugee was preju- diced in any way by being forced to provide response to draft rec- ommendation of President of CBSA before she had received re- sponse from CBSA with respect to access to information request. At end of day, refugee sought to have court re-weigh evidence that was before minister and come to different result, but that was not role of court sitting in review of ministerial decision. Steves v. Canada (Minister of Public Safety and Emergen- cy Preparedness) (2017), 2017 CarswellNat 621, 2017 FC 247, Anne L. Mactavish J. (F.C.). REFUGEE PROTECTION Elements of protected refugee status Refugee claim denied where motive was economic, not ethnic Principal applicant and minor applicants were ethnic Chinese citizens of Guyana and claimed fear of persecution on basis of their race. Applicants f led Guy- ana and unsuccessfully claimed refugee status in Canada. Appli- cants appealed decision to refu- gee appeal division (RAD), which confirmed decision. Applicants brought application for judicial review. Application dismissed. RAD conducted its own analy- sis of documentary evidence. RAD's conclusions from review of documentary evidence were within range of possible, accept- able outcomes. RAD reviewed evidence and reached conclusion that motive was economic, not ethnic. Evidence in present case differed significantly from that in other case law. Su v. Canada (Minister of Citizenship and Immigration) (2017), 2017 CarswellNat 681, 2017 FC 243, Richard F. South- cott J. (F.C.). Pensions FEDERAL AND PROVINCIAL PENSION PLANS Federal pension plans Canada Pension Plan disability benefits denied for individual who retained capacity to work Individual, who worked as va- let at casino, was involved in car accident at casino underground parking garage and suffered from neck, back and foot pain. Due to functional limitations relating to injuries suffered, individual was assigned to casino security de- partment until he was laid off in 2004. Individual was involved in second car accident where he suf- fered variety of injuries including to his shoulder, neck, and back. Individual's application for Can- ada Pension Plan (CPP) disability benefits was denied both initially and upon reconsideration. Social Security Tribunal General Divi- sion (GD) dismissed individual's appeal. Individual was denied leave to appeal GD decision to Appeal Division (AD). Individu- al brought application for judicial review seeking to reverse AD de- cision and directing payment of CPP disability benefits retroac- tive to onset of his initial applica- tion. Application dismissed. In its decision GD set out extensive summary of individual's medical and work history; review includ- ed summary of rehabilitation and vocational assessment. Contrary to individual's counsel's submis- sions, vocational assessment was not uncontradicted. There were three medical reports, one in December 2005, second in June 2007, and third in May 2009 all expressing view that individual, despite his undisputed disabili- ties, retained capacity to work. In placing less weight on vocational report, GD articulated its ratio- nale for coming to conclusion it did. In considering application for leave to appeal, AD also un- dertook detailed consideration of each of identified grounds of appeal, including treatment of vocational assessment. AD rea- sonably concluded that appeal did not have reasonable chance of success on this ground. AD rea- sonably found that it was not role of AD to reweigh evidence that GD considered and addressed cumulative effect of individual's disabilities in rendering its deci- sion, citing express statements in GD to support this conclusion. Hideq v. Canada (Attorney General) (2017), 2017 Carswell- Nat 1894, 2017 FC 439, Patrick Gleeson J. (F.C.). Tax Court of Canada Tax GOODS AND SERVICES TAX Rebates Immigration status not relevant for determining eligibility for new housing rebate Property owner and his wife were citizens of United Kingdom (U.K.) who sold their U.K. home and came to Canada, with their passports stamped for admission for six months. Owner entered into agreement to purchase new- ly built home in Canada and, im- mediately upon closing, moved in. Before expiry of six months, owner and wife left Canada brief ly and returned, receiving stamps for further six month stay. Owner's three children were born in Canada and family con- tinued practice of regular travel and re-entry. Owner's application for new housing rebate under s. 254(2) of Excise Tax Act was refused on basis house could only be considered secondary place of residence because of owner's visi- tor immigration status. Owner appealed. Appeal allowed. It was clear that owner and family had resided in house in Canada for at least ten months each year since its purchase and there was no evi- dence that they had available to them any other place of residence anywhere in world. Requirement to be satisfied was whether hous- ing unit was occupied as primary place of residence, which was very distinct from either buyer's residence status in Canada for income tax law purposes or whether buyer was lawfully pres- ent or resident in Canada for im- migration law purposes. Home occupied as only place of resi- dence could not be characterized as anything other than owner's primary place of residence. Im- migration status of owner and wife as non-citizens of Canada was not relevant for new hous- ing rebate purposes. Minister did not present any evidence on im- migration law. Characterization of house did not turn on whether owner could have been subject of removal order or deportation or whether owners' intention to use house as primary place of resi- dence was risky plan given their immigration status as visitors. Owner intended to acquire house as sole place of residence and had used it as that ever since closing on purchase. Parthiban v. R. (2017), 2017 CarswellNat 608, 2017 TCC 30, Patrick Boyle J. (T.C.C. [Infor- mal Procedure]). INCOME TAX Administration and enforcement Taxpayer liable for gross negligence penalty Taxpayer was certified general accountant whose participation in charitable donation program, on invitation of close friend, led to reassessments and significant tax liabilities for three taxation years during period when he lost employment. Friend then promised that such liabilities could be "reversed" by having organization prepare his next tax return. Taxpayer, who was spending significant amount of time outside Canada to assist with family's foreign farm ven- ture and was anxious about tax liabilities, authorized friend to look after preparation and filing of tax return. Taxpayer's income tax return was prepared by orga- nization to report net business loss of $274,576.54, eliminating his taxable income for that year as well as for three preceding years. Minister reassessed tax- payer under Income Tax Act, denying loss and imposing gross negligence penalty. Taxpayer ap- pealed only to challenge penalty. Appeal dismissed. Statements in taxpayer's income tax return claiming business income and expenses were false. Taxpayer's education and work experience provided him with knowledge and understanding of business and financial matters. Taxpayer did not make inquiry into pre- viously unknown tax preparing organization, partly because of misplaced trust in friend. Warn- ing signs included magnitude of claimed business loss, ready vis- ibility of false entries about busi- ness income and separate state- ment of business activities, and absence of tax preparer's name and contact information in box beside where he signed. Taxpayer failed to see warning sign of re- ferral by friend who had also rec- ommended donation program. Friend's "explanation" clearly did not explain how taxpayer could be entitled to refund of taxes but he readily agreed to let friend proceed as proposed to clear tax liabilities, without insisting on full explanation of contents of return. Considering all factors, taxpayer was wilfully blind when he signed return. Placing undue trust in tax preparer, to extent of signing return without review- ing it, demonstrated indifference as to whether Act was complied with or not. Taxpayer made false statements in tax return under circumstances amounting to gross negligence. Rowe v. The Queen (2017), 2017 CarswellNat 3032, 2017 TCC 122, Don R. Sommerfeldt J. (T.C.C. [General Procedure]). Ontario Civil Cases Bankruptcy and Insolvency PROVING CLAIM Provable debts Fund liquidators failed to establish damages British Virgin Islands fund, F Ltd., was part of group (F Group) which provided funds on behalf of itself and S Ltd. and L Ltd. to B's security brokerage, B LLC, for investment. In December 2008, B was arrested for operating Ponzi scheme and trustee and liquida- tor was appointed under US Se- curities Investor Protection Act (SIPA) to collect and set aside fund of BLMIS customer proper- ty for distribution among BLMIS customers. SIPA trustee sought return of 3.5 billion from F Group. F Ltd. filed claims in SIPA proceeding. In 2011, liquidator appointed for F Ltd., K, agreed to pay SIPA trustee $70 million, parties consented to judgments in favour of SIPA trustee against each F Group fund, and F Ltd. was granted $230 million claim in SIPA proceeding. F Group brought action in breach of con- tract and negligence against auditor of its 2006 and 2007 fi- nancial statements for failing to discover and disclose Ponzi scheme, claiming US $2.577 bil- lion difference between actual and estimated liquidation deficits had auditors discovered scheme earlier. Auditor admitted negli- gence. Auditor brought motion for summary judgment. Motion granted; action dismissed. Liqui- dators failed to establish damages so there was no genuine issue requiring trial. Evidence of audi- tor's witness that F Group were better off by some $857,500,000 was accepted. Liabilities of F Group or their liquidators to SIPA trustee or customers of B LLC were incorrectly included in calculations. Net liability figure $2,329,525,000 used in calcula- tion was invalid. Investments S Ltd. and L Ltd. made in B LLC were double-counted. Phantom earnings were included in calcu- lations based on fictitious entries on B LLC statements. Hypotheti- cal, statute-barred claims of B LLC investors against F Fund were included in calculations. Liquidators gave no details as to claims they rejected or included in damage calculation and no details of separate proceedings in BVI in which F Group were alleg- edly liable to investors. Fairfield Sentry Limited et al v. PwC et al (2017), 2017 CarswellOnt 8995, 2017 ONSC 3447, Newbould J. (Ont. S.C.J. [Commercial List]). Civil Practice and Procedure CLASS AND REPRESENTATIVE PROCEEDINGS Representative or class proceedings not under class proceedings legislation Failure to obtain representation order within two year limitation period was fatal to action Limitation period. Family- owned meat processing business went bankrupt and 800 employ- ees were terminated without notice or severance. Two actions were commenced against bank- rupt businesses, other allegedly family-owned companies and two individuals alleged to be common employers. Actions were intended to be representa- tive actions, one on behalf on unionized employees and one on behalf of non-unionized em- ployees, and sought damages for wrongful dismissal as well as punitive damages on basis of common employer, conspiracy and oppression. Solvent defen- dants brought motion to dismiss representative actions on basis they were time-barred because required representation order was not obtained within two- year limitation period. Motion granted in part; action on behalf of unionized employees dis- missed. Failure to obtain repre- sentation order within two-year limitation period was fatal to ac- tion on behalf of unionized em- ployees, because it was brought under R. 12.08 of Rules of Civil Procedure, which required rep- resentation order be made before proceeding was commenced. Ac- tion on behalf of non-unionized employees was brought under R. 10.01, which contemplated prior proceeding and later rep- resentation order. Nothing in R. 10.01 plainly and obviously required representation order be obtained within two-year period. Action on behalf of non-union- ized employees could proceed, on proviso plaintiffs apply for repre- sentation order forthwith, upon which defendants could pursue arguments about balance of con- venience and prejudice. Caetano v. Quality Meat Packers Holdings Ltd. (2017), 2017 CarswellOnt 4093, 2017 ONSC 1199, Edward P. Belobaba J. (Ont. S.C.J.).

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