Law Times

Law Times • November 13, 2017 Page 15 www.lawtimesnews.com CASELAW increasing value of addition for purpose of computing tax on self- supply). Registrant appealed. Ap- peal dismissed. Section 191.1 ap- plied to matter at hand: there was self-supply of residential complex; builder of addition received pay- ments from government of Nova Scotia. However, critical question was whether, at time of self-supply, registrant could expect to receive amount of money from govern- ment of Nova Scotia for purpose of making residential units in addition available to individuals. While residents contributed to accommodation costs depend- ing on their income, funding by province was such that province was making significant contribu- tion to cost of residential accom- modation in new facility. There was question that at time of self- supply, registrant could expect to receive amounts of money from government of Nova Scotia. Lan- guage in statute was simply that there had to be payment for state purpose, nothing more. Require- ments of s. 191.1 were met so long as part of amounts received were for purpose of making residential units available. High-Crest Enterprises Lim- ited v. The Queen (2017), 2017 CarswellNat 5886, 2017 TCC 210, Gaston Jorré J. (T.C.C. [General Procedure]). INCOME TAX Tax credits Child tax credits could not be prorated for taxation year Taxpayer and then wife had one child. Relationship broke down and parties divorced. Parties lived separately, with taxpayer main- taining marital home and sharing custody of child. In 2010, par- ties were granted joint custody, with child's primary residence with wife; taxpayer was to pay $331 monthly in child support. In 2013, wife moved 150 kilome- tres distance from child's friends and school. Taxpayer and wife agreed that child's primary resi- dence would change to be with taxpayer at taxpayer's home and support amounts would cease. In 2014, consent order was issued to ref lect this agreement. Taxpayer testified she had "verbal agree- ment" prior to 2013 with wife that instead of making monthly sup- port payments, taxpayer would pay all expenses for child and would reimburse wife for any expenses she incurred for child. Taxpayer claimed dependent and child tax credits under ss. 118(1) (b) and (b.1) of Income Tax Act for 2013 taxation year. Minis- ter reassessed denying claims. Taxpayer appealed. Appeal dis- missed. It was clear 2010 order re- quired taxpayer to make monthly support payments in respect of child; that order remained in ef- fect until issuance in August 2014 of consent order which forgave any arrears in respect of support payments. However, when wife decided to move, child either al- ready was living primarily with taxpayer, or child commenced to live with taxpayer in 2013 with wife's impending or actual move. Monthly payment of support amounts as provided by 2010 order continued to be paid for some periods of months in 2013, approximately until wife moved in that year, sometime between April and September. With this factual conclusion, no statutory language used in or in connection with s. 118(1) indicated the deduc- tions could be prorated for taxa- tion year, noting in contrast with other provisions in Act by which Parliament explicitly provided for proration. Since under order tax- payer was required to make sup- port payments in 2013, Minister was correct in denying claim for child support related tax credits. Cook v. The Queen (2017), 2017 CarswellNat 5083, 2017 TCC 188, B. Russell J. (T.C.C. [Informal Procedure]). Ontario Civil Cases Civil Practice and Procedure LIMITATION OF ACTIONS Actions involving municipal corporations Action for damages alleging failure to advise on effect of bylaw was statute barred Owner wished to develop indus- trial property which became sub- ject to bylaw that required him to pay town $266,157.22 in develop- ment charges. Owner brought action for damages against de- fendants, project manager and consulting firm, alleging that they failed to advise him about bylaw and its effect, causing him to unnecessarily pay development charges. Motion by defendants for summary judgment dismissing action as statute barred was grant- ed on basis that action was com- menced after two-year limitation period in Limitations Act, 2002. Appeal by owner dismissed. Mo- tion judge found that owner knew that payment of development charges could have been avoided had timely application for build- ing permit been made and knew enough material facts to infer that defendants had caused him harm by not applying for building per- mit; and that reasonable person who had legal advice available to him for construction project would not have asked principal of consulting firm for legal ad- vice about operation of municipal bylaws. It was arguable on record that owner should have been aware of his claim and his right to bring action much earlier in time. To suggest that anyone engaged in development in town and their experts would have been unaware that town was about to pass bylaw under Development Charges Act, 1997 strained credulity. When town returned site plan to owner, it noted that development charges would be owing on project, but nothing was done until two years later when building permit was applied for and owner had to pay charges. By then, if not before, owner should have known that he had claim against those who were responsible for obtaining build- ing permit. There was no error in motion judge's decision. Gottlieb v. Malone Given Parsons Ltd. (2017), 2017 Car- swellOnt 15093, 2017 ONCA 757, J. MacFarland J.A., David Watt J.A., and M.L. Benotto J.A. (Ont. C.A.); affirmed (2016), 2016 CarswellOnt 18866, 2016 ONSC 7350, Perell J. (Ont. S.C.J.). TRIALS Jury trial No authority to expand pre-screening process to identify potential partiality Plaintiff and defendant were preparing for jury trial to resolve issues arising from 2010 MVA. Plaintiff sought to pre-screen po- tential jurors for "connections" to one or both of parties' insur- ers. Plaintiff brought motion for order that names of parties' re- spective auto insurers be includ- ed in list made available to jury members of "persons involved" in case in pre-screening process. Motion dismissed. Plaintiff pro- vided no authority for trial judge to exercise discretion to expand pre-screening process to identify potential partiality on any basis other than racial bias. Juries Act did not give trial judge discretion to expand scope of pre-screen- ing process and Supreme Court had made it clear that trial judge could not take over challenge process by deciding controversial questions of partiality. Mention of insurers from outset could lead jury to conclude that matter was dispute between insurers or that plaintiff will ultimately be com- pensated by insurance company, as opposed to defendant person- ally, conclusion which would ignore possibility of personal exposure for defendant in event of award of damages in excess of third party liability limits avail- able to defendant. In selection of jury for civil case, there was no statutory equivalent to challenge for cause as in criminal process, but there was presumption that jurors were capable of fulfilling their responsibilities in impartial manner which was important feature of legal system and diffi- cult to rebut. Plaintiff led no evi- dence to establish that connec- tion with insurers other than that of employee-employer created "realistic potential for existence of partiality," so even if court could perform such pre-screen- ing, there was no evidence upon which to base finding that con- nection created realistic potential for partiality. Although it was no longer case that mere mention of insurance before jury would re- sult in its discharge, law had not evolved to point that names of parties' insurers in MVA litiga- tion had to be disclosed as part of pre-screening process generally or in effort to avoid partiality on part of prospective juror. Risk of "partial" juror could be dealt with by asking about juror's employ- ers. Jurors were instructed at least three times as to impartiality, so risk of juror with undisclosed connection to insurer remaining silent and participating through deliberations failing to follow in- struction was small. Nemchin v. Green (2017), 2017 CarswellOnt 5112, 2017 ONSC 2126, Sylvia Corthorn J. (Ont. S.C.J.). Environmental Law STATUTORY PROTECTION OF ENVIRONMENT Approvals, licences and orders Novelty and public interest factored in to reduce partial indemnity costs award Director of Ministry of Environ- ment and Climate Change issued Renewable Energy Approval for energy company's wind energy project, located near applicants' designated heritage property. Ap- plicants' application for judicial review was dismissed. Costs sub- missions received. Energy com- pany awarded costs of $75,000 inclusive from applicants. Ap- plicants and energy company, relying on alleged misconduct by other side, respectively claimed costs despite being unsuccessful and claimed substantial indemni- ty costs. This was hard fought liti- gation but conduct complained of did not justify these extraordi- nary claims. There was element of novelty in applicants' case regard- ing heritage issue and so element of public interest, but that issue was subsumed in broad attack on decision below that resulted in protracted and more costly pro- ceeding. Novelty and public inter- est should be factored in to reduce costs award from energy com- pany's claimed partial indemnity costs of $113,271.43, even though that amount compared very fa- vourably to applicants' own costs. Driver v. wpd Canada Cor- poration (2017), 2017 Carswel- lOnt 16272, 2017 ONSC 5747, Kiteley J., Lederer J., and Mathe- son J. (Ont. Div. Ct.); additional reasons (2017), 2017 Carswel- lOnt 10226, 2017 ONSC 3824, Kiteley J., Lederer J., and Mathe- son J. (Ont. Div. Ct.). Insurance ACTIONS ON POLICIES Commencement of proceedings Independent counsel to be appointed where conflict of interest in face of settlement offer While playing game where they intended to shoot each other with BB guns, 14-year-old R fired pel- let into eye of 14-year-old J. J com- menced action for $1.5 million against R and R's parents, who were separated at time of incident. R's mother had homeowner's in- surance policy with third party liability limited at $1 million. Insurer appointed counsel to de- fend R and had other firm repre- sentation respecting coverage. R's counsel applied for declaration that R was insured under his fa- ther's policy and his step-mother's policy (respondents). Motion judge dismissed application to provide coverage under respon- dents' policies on basis that cover- age was excluded by intentional act exclusion clauses in policies. R appealed. Appeal allowed. Court raised issue whether R's counsel was in conf lict of interest since he was being instructed and paid by mother's insurer to defend R, but if R's appeal failed it would be to insurer's financial advantage. There was conf lict of interest be- tween insurance company and insured with respect to legal rep- resentation. There was reasonable apprehension of conf lict between interests of R and insurer which precluded court from ruling on merits of appeal. Independent counsel was to be appointed for R who did not report or take in- structions from insurer to advise on advisability of bringing under- lying application in face of settle- ment offer and representing him on appeal. Reeb v. The Guarantee Company of North America (2017), 2017 CarswellOnt 15477, 2017 ONCA 771, Robert J. Sharpe J.A., P. Lauwers J.A., and L.B. Roberts J.A. (Ont. C.A.); re- versed (2016), 2016 CarswellOnt 21273, 2016 ONSC 7511, Chris- topher M. Bondy J. (Ont. S.C.J.). AUTOMOBILE INSURANCE Uninsured automobile coverage Consumers of insurance should be protected from insurer's use of unapproved form When defendant driver's licence had been suspended, she ar- ranged insurance with insurer I Co. to maintain coverage on her car so that her husband could drive it. Defendant executed Excluded Driver Endorsement. After her licence was reinstated, defendant drove car and was in- volved in accident with plaintiffs. Plaintiffs brought action against defendant. Application by plain- tiffs' uninsured motor vehicle car- rier R Co. for declaration that de- fendant was fully insured by I Co. was dismissed. R Co. appealed. Appeal dismissed. Even if I Co.'s Excluded Driver Endorsement was not in pre-approved form, it was not necessarily invalidated by s. 227(1) of Insurance Act. Legisla- ture intended lack of compliance to be matter for Superintendent of Financial Services, as regula- tory scheme gave Superintendent power to deal with consequences of deviation. It was not role of courts to read into s. 227 of Act that non-compliant form was necessarily void as matter of con- tract law. Consumers of insur- ance should be protected from insurer's use of unapproved form. I Co.'s subsequent coverage deci- sions, initially providing coverage to defendant, had no bearing on contractual validity of Excluded Driver Endorsement. There was no merit to R Co.'s arguments at- tacking application judge's factual findings, including that defendant understand at time of executing endorsement that she was ex- cluded from driving vehicle even if her licence were to be reinstated. Excluded Driver Endorsement on policy insuring defendant's driver was in full force and effect when accident occurred. Royal & Sun Alliance In- surance Co. of Canada v. In- tact Insurance Co. (2017), 2017 CarswellOnt 6826, 2017 ONCA 381, Russell Juriansz J.A., David Brown J.A., and B.W. Miller J.A. (Ont. C.A.); affirmed (2016), 2016 CarswellOnt 15029, 2016 ONSC 5856, H.S. Arrell J. (Ont. S.C.J.).

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