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Page 18 November 20, 2017 • Law Times www.lawtimesnews.com CASELAW Temporary foreign worker pro- gram (TFWP). Employer was family farm that utilized TFWP. Employers under TFWP had to agree to comply with various conditions outlined in ss. 209.3 and 209.4 of Immigration and Refugee Protection Regulations. Employer was subjected to in- spection process due to allega- tions of poor working and living conditions and physical abuse. Minister of Employment and Social Development found em- ployer to be non-compliant with respect to wages, working condi- tions, and retention and provision of documents, and to have failed to make any reasonable efforts to provide workplace free of abuse. Minister banned employer from accessing TFWP for two years and published employer's infor- mation on ineligibility list. Em- ployer brought application for ju- dicial review. Application granted in part. Minister's decision with respect to employer's failure to make reasonable efforts to pro- vide workplace free of abuse was set aside and returned to minister with directions. While employer had not had any abuse-free work- place policies and procedures, there was no basis to support conclusion that employer had not provided workplace that was free of abuse. Minister's decision with respect to employer's noncompli- ance with wage, working condi- tion, and documentation require- ments was upheld. Contrary to employer's contention, decision included consideration of wheth- er breaches were justified. Justi- fications provided had not been sufficiently supported by reliable evidence and had not met explicit criteria set out in regulations. Obeid Farms v. Canada (Minister of Employment and Social Development) (2017), 2017 CarswellNat 815, 2017 FC 302, Peter Annis J. (F.C.). Tax INCOME TAX Administration and enforcement Retirement of outstanding tax debts was important factor in exercise of discretion Re-appropriation of statute- barred credit balance. Taxpayer did not file corporate tax returns within required time frames and it owed income tax, penalties and interest. Canada Revenue Agen- cy (CRA) collected monies from taxpayer through payments and garnishment and applied it to in- come tax assessments. Taxpayer filed missing tax returns and was reassessed, resulting in credits. As taxpayer's returns for three tax years were filed more than three years after tax year-end, no refund of credit balance was available to taxpayer pursuant to s. 164(1) of Income Tax Act. Tax- payer requested re-appropriation of balance of statute-barred cred- its from its corporate income tax account to its Harmonized Sales Tax (HST) arrears pursuant to s. 221.2(2) of Act. Minister of Na- tional Revenue denied request because there were no extraordi- nary circumstances which had prevented timely filing of returns. Taxpayer brought application for judicial review of Minister's de- cision. Application granted and matter remitted to Minister for redetermination. Minister's dis- cretion was not to be exercised such that taxpayer was permitted to have statute-barred credits re- allocated absent certain factors. It was consistent with overall purpose of Act that s. 221.2(2) of Act be interpreted such that re- tirement of outstanding tax debts was important factor to take into account in exercise of Minister's discretion. Factors such as tax- payer's delinquency in tax filings and lack of extraordinary cir- cumstances in explaining such delinquency were factors to be taken into account but were not only considerations. Minister's decision was unreasonable be- cause it failed to take into account relevant circumstances raised by taxpayer. Minister did not take into consideration prospect of taxpayer's bankruptcy and re- sulting possibility that HST lia- bility would not be paid if request were not granted. Pomeroy's Masonry Lim- ited v. Canada (Attorney Gen- eral) (2017), 2017 CarswellNat 5724, 2017 FC 952, Richard F. Southcott J. (F.C.). Tax Court of Canada Tax GOODS AND SERVICES TAX Rebates Minister has no discretion in deciding whether or not to grant rebates Applicant and his brother agreed to purchase yet-to-be-construct- ed residential condominium from builder. By time that trans- action closed, two years later, ap- plicant and brother had plans to move away for job and schooling. Condominium unit was rented from completion of construc- tion until it was finally sold three years later. Minister assessed ap- plicant under Excise Tax Act, de- nying new housing rebate (NHR) on basis that neither he nor any qualifying relation was first to occupy property following com- pletion of construction. In cor- respondence and notice of assess- ment, CRA suggested possibility of eligibility for new residential rental property rebate (NRRPR). Applicant's application for NRRPR, filed more than two years after such suggestion, was denied. Applicant appealed, after objecting to denial of NHR but not to denial of NRRPR. Appeal allowed in part. While applicant had bona fide intention of resid- ing in property upon construc- tion completion when agree- ment was signed, it was clear that neither he nor relation was first to occupy new premises as resi- dence upon such completion so Minister correctly denied NHR application. Applicant could not proceed to appeal from assess- ment denying NRRPR without having filed notice of objection. Legislated conditions precedent for rebates left Minister with no discretion in deciding whether or not to grant rebates. Applicant pleaded that s. 296(2.1) of Act al- lowed granting of NRRPR de- spite his late filing of application. Minister did not determine that NRRPR that had not yet been ap- plied for would have been payable to applicant, but made suggestion that he could well qualify for it that did not lead to prompt filing of such application. Question of whether applicant would qualify for NRRPR was matter for Min- ister to determine as part of as- sessment properly under appeal. Having Minister now make such determination as to "allowable rebate" under s. 296(2.1) of Act would be in nature of redressing that assessment. Appeal would be allowed for purpose of refer- ring assessment back to Minister for reconsideration and reas- sessment, to determine whether NRRPR was "allowable rebate" for applicant such that it was pay- able to him under s. 296(2.1) of Act. Ahmad v. The Queen (2017), 2017 CarswellNat 5432, 2017 CarswellNat 5846, 2017 TCC 195, 2017 CCI 195, B. Russell J. (T.C.C. [Informal Procedure]). INCOME TAX Administration and enforcement Lawyer likely to be called as witness so counsel unable to properly represent taxpayer Minister of National Revenue (Minister) reassessed taxpayer for 1997 to 2000 taxation years, disallowing business losses that resulted from capital cost allow- ance (CCA) deductions claimed in respect to his acquisition costs of interest in certain software. Minister claimed taxpayer's rep- resentative law firm provided le- gal advice to taxpayer in respect of various agreements he execut- ed and related transactions in re- spect to acquisition of his interest in software tax shelter scheme. Minister alleged conf lict of in- terest would arise because one or more partners at representative law firm were likely to be called as witnesses at hearing with results that counsel would be unable to properly represent taxpayer. Minister brought motion for re- moval of counsel and law firm; for extension of time to complete remaining steps of litigation; and for costs. Motion granted. Min- ister was awarded further costs in amount of $237.00 in respect to taxpayer's cancellation of scheduled examination for dis- covery. Appeal not yet advanced to examination for discovery stage and proceeding were still in its early stages. Current stage of proceeding and delay caused by disqualification of taxpayer's counsel would not be impedi- ments to granting Minister's mo- tion. Testimony of other lawyers from representative law firm ap- peared to be central to resolution of appeal and determination of whether taxpayer would be enti- tled to claimed CCA deductions. Therefore this factor weighed in favour of granting motion. Tax- payer made no assertion that Minister acted in bad faith in bringing motion and this factor was neutral. Significance of evi- dence to be led favoured in grant- ing Minister's motion; testimony of members of law firm would be of vital importance in deter- mining whether scheme was in fact "tax shelter" that was not registered. There was insufficient evidence to conclude taxpayer would be prejudiced financially. However, there was strong likeli- hood taxpayer's counsel would be required to cross-examine his partner and former associate on matters bearing directly of qual- ity of legal services provided to taxpayer and law firm's participa- tion in alleged tax shelter scheme. It would be inappropriate to al- low considerations of financial impact on taxpayer to supersede very real risks of integrity of tax system and maintenance of high professional standards in con- duct of tax appeals. Woessner v. The Queen (2017), 2017 CarswellNat 3195, 2017 TCC 124, Diane Campbell J. (T.C.C. [General Procedure]). Ontario Civil Cases Bankruptcy and Insolvency EFFECT OF BANKRUPTCY ON OTHER PROCEEDINGS Proceedings against bankrupt Motion for order that cost award was debt not discharged by bankruptcy granted in part Father brought motion to vary order for custody and support of child. Father's claim for shared custody was dismissed at trial. Trial judge awarded sole custody to mother and adjusted child support. Costs were awarded to mother. Father made assign- ment in bankruptcy and was lat- er discharged. Mother brought motion for order that cost award was debt not discharged by bankruptcy. Motion granted in part. Child support issue was inextricably linked to father's shared custody claim, and they could not be separated. It was reasonable to apportion costs equally between shared custody claim and child support claim. 50 percent of costs to be consid- ered debt in relation to support of child living apart from father. Taylor v. Sist (2017), 2017 CarswellOnt 10650, 2017 ONSC 4280, Gareau J. (Ont. S.C.J.). Civil Practice and Procedure COSTS Costs of particular proceedings Defendant to pay substantial indemnity costs after failing to comply with disclosure obligations Plaintiff employee worked for defendant employer as insurance agent and signed employment agreement that provided him with right to purchase his book of business. Employee resigned and wanted to purchase book of business but claimed that employer, employer and its sole shareholder, actively frustrated his ability to do so. Employee brought action for damages. On advice of counsel, employer re- fused to answer questions posed on examination for discovery related to their production of documents based on purported waiver of solicitor and client privilege. Employee successfully brought motion to compel em- ployer to answer questions. Em- ployer was ordered to reimburse employee for amounts he paid to consultant for forensic review of email communications and for costs of motion on substantial indemnity basis. Employer ap- pealed. Appeal dismissed. Evi- dence that employer relied on did not support assertion that they complied with their docu- mentary discovery obligations under prior court order. Em- ployee was not conceding that employer complied with their production obligations and re- lied on review to argue opposite. It was clear that if employee had known that employer was not complying with their produc- tion obligations and had not re- viewed email backup tapes, their position with respect to initial costs of forensic review would have been very different. Mo- tion judge's order did not finally determine issue of who was to pay for costs of forensic review as order made it clear that those costs could be readjusted at trial. Employer's procedural fairness point had no merit as motion judge did not decide motion on basis that parties had no notice. Verge Insurance Brokers Ltd. v. Sherk (2017), 2017 Car- swellOnt 3839, 2017 ONSC 1597, H. Sachs J., Stewart J., and Spies J. (Ont. Div. Ct.); affirmed (2016), 2016 CarswellOnt 10212, 2016 ONSC 4007, Turnbull J. (Ont. S.C.J.). Environmental Law LIABILITY FOR ENVIRONMENTAL HARM Negligence Action in negligence, nuisance and other torts dismissed in absence of objective evidence Provincial Ministry of Envi- ronment approved spreading of biosolids, on property belong- ing to defendant couple who were landowners. Plaintiffs were neighbours of couple, who alleged that use of biosolids caused them both physical harm and economic loss. Neighbours brought action against couple, in negligence, nuisance and other torts. Couple claimed that action was out of time, be- ing brought over two years af- ter spreading started. Couple moved for summary judgment, which was granted in part. Mo- tion judge ruled that there was potential for claim in respect to

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