Law Times

Law Times • OcTOber 30, 2017 Page 13 www.lawtimesnews.com CASELAW Federal Court of Appeal Tax INCOME TAX Business and property income Appropriate to apply integration principle to determine jetty was integral to terminal operations Taxpayers were partners in C Partnership that constructed terminal and jetty to conduct business of importation, un- loading, regasification and delivery of liquid natural gas. Taxpayers classified cost of ac- quisition of terminal and jetty as properties falling in Class 43 of Income Tax Regulations for cap- ital cost allowance purposes and claimed investment tax credits (ITCs) pursuant to s. 127(5) of Income Tax Act for 2007 and 2008 taxation years. Minister of National Revenue reassessed terminal as being Class 1(n) and jetty as Class 3(h) of Regulations, and determined that neither at- tracted ITCs. Tax Court judge allowed taxpayers' appeal. Judge held that terminal and jetty were Class 43 assets and eligible for ITCs. Judge considered jetty to be part of integral totality of op- eration occurring at terminal. Judge held that terminal and jetty assets were not distribut- ing equipment captured in Class 1(n) of Regulations. Judge found that liquid natural gas arriving at jetty underwent process that changed composition of goods. Crown appealed. Appeal dis- missed. Facility was not part of gas distribution system for purposes of Class 1(n) of Regu- lations. Judge did not disregard legislative context, did not fail to give "distribution" broad mean- ing, did not fail to take into ac- count s. 125.1 of Act, and did not strip Class 1(n) of Regulations of all meaning. It was unfair for Crown to argue on appeal that there was no difference between delivery by tanker or transmis- sion pipeline when it did not take this position at trial. Judge did not err in concluding that operations involved processing as product was changed when it was transformed from liquid to gaseous state. It was appropri- ate for judge to apply integration principle in determining that jetty was integral to terminal operations. Canada v. Repsol Energy Canada Ltd. (2017), 2017 Car- swellNat 4523, 2017 FCA 193, J.D. Denis Pelletier J.A., Rich- ard Boivin J.A., and Judith M. Woods J.A. (F.C.A.); affirmed (2015), 2015 CarswellNat 108, 2015 CarswellNat 6956, 2015 TCC 21, 2015 CCI 21, Camp- bell J. Miller J. (T.C.C. [General Procedure]). (F.C.A.); affirmed (2015), 2015 CarswellNat 10498, 2015 CarswellNat 2327, 2015 TCC 154, 2015 CCI 154, Camp- bell J. Miller J. (T.C.C. [General Procedure]). Federal Court Commercial Law TRADE AND COMMERCE Consumer protection Continued refusal to grant NOCs due to continuing integrity concerns not unreasonable Pharmaceutical company was affiliated with Indian companies APIPL and ARPL. US Foods Drug Administration (FDA) found issues concerning data in- tegrity at APIPL and ARPL: in- vestigating or reporting out-of- specification results, including re-testing failing product until passing result without address- ing why initial test results failed. Health Canada concluded all finished products containing pharmaceutical ingredients (APIs) should be re-tested. As negative publicity grew, Minis- ter of Health demanded that ac- tion be taken against company. However, Minister's import ban was struck down by Court. Therapeutic Products Direc- torate of Health Canada (TPD) continued earlier decision re- quiring company to provide certain additional information prior to TPD completing its re- view of Notice of Compliance (NOC) submissions for approval of certain new products that were manufactured or tested at APIPL and ARPL. Company brought application for judicial review. Application dismissed. Health Canada's continued re- fusal to grant NOCs because of continuing integrity concerns over data generated pre-January 2015 was neither improper nor unreasonable. It was not Minis- ter's import ban per se that was improper; rather it was motiva- tion behind it, fact that Min- ister imposed ban in response to media and political pressure and not to protect health and safety of Canadians. There was no suggestion that TPD was act- ing at behest of, or under pres- sure from, Minister herself, or responding to media pressure. TPD decision was not made by official in Assistant Deputy Minister's Officer, very same official who was architect of im- port ban. References to import ban were not evidence that TPD was improperly pressured or di- rected by anyone outside TPD to assess data integrity concerns for itself. Evidence also showed that although prompted by in- spectorate to examine situation at APIPL and ARPL from per- spective of NOC submissions, TPD undertook its own inter- nal review which led to general policy for dealing with data in- tegrity concerns. Notwithstand- ing improper import ban, there were, and continued to be, le- gitimate data integrity concerns with certain drugs from APIPL and ARPL. Company itself ac- knowledged there were data in- tegrity concerns at APIPL and ARPL that required resolution. Company committed itself to five-year review to satisfy FDA and since status of that review was not known, TPD could not make decision until it was pro- vided with relevant information. Apotex Inc. v. Canada (Minister of Health) (2017), 2017 CarswellNat 877, 2017 FC 315, James Russell J. (F.C.). Immigration and Citizenship REFUGEE PROTECTION Credibility Credibility findings were supported by evidence making officer's determination reasonable Applicants were Syrian refu- gees who applied for permanent resident status in Canada while in Jordan using private spon- sorship under Syrian Refugee Resettlement Project. After two in-person interviews, applicants were notified by letter that ap- plication was rejected. Visa of- ficer found evidence presented by applicants was not credible and therefore officer could not determine whether applicants were inadmissible. Applicants brought application for judicial review. Application dismissed. Officer's notes referred to many discrepancies in applicants' evidence. Applicants were given two interviews, told of officer's credibility concerns and given opportunity to respond, which was more procedural fairness than would normally be asked of or expected from visa officer in such situations. Officer's cred- ibility findings were supported by evidence making determina- tion reasonable. Alkhairat v. Canada (Min- ister of Citizenship and Immi- gration) (2017), 2017 Carswell- Nat 856, 2017 FC 285, Glennys L. McVeigh J. (F.C.). REFUGEE PROTECTION Practice and procedure in refugee claims Claim ineligible for referral because applicant already Convention refugee in another country Applicant, citizen of Somalia, f led due to fear of persecution by Al Shabaab and was recognized as Convention refugee in Ugan- da. Applicant claimed he began receiving threatening phone calls, received no protection from police and experienced dis- crimination when he attempted to relocate in Uganda. Applicant travelled to Canada and claimed refugee protection. Citizenship and Immigration Canada (CIC) determined claim was ineligible for referral to Refugee Protec- tion Division because applicant had already been recognized as Convention refugee in another country to which he could be sent or returned within s. 101(1) (d) of Immigration and Refu- gee Protection Act. Applicant brought application for judicial review. Application dismissed. Although existing jurispru- dence interpreted phrase "could be sent or returned" as referring to whether claimant could phys- ically and legally be readmitted to country that had recognized him or her as Convention refu- gee, applicant submitted phrase was ambiguous and urged court to adopt interpretation based on Canada's obligations under Convention and values under 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. 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