Law Times

Law Times • January 15, 2018 Page 13 www.lawtimesnews.com Federal Court of Appeal Tax INCOME TAX Administration and enforcement Settlement agreement binding as representative signing agreement had capacity on behalf of taxpayers Settlements. Taxpayers were in- volved in film production and were part of group that included four associated master limited partnerships (MLPs) and sev- eral production services limited partnerships (PLPs). Settlement agreement was entered into be- tween Canada Revenue Agency (CRA) and representative for MLPs and related PLPs, but fo- cused on SH MLP. Minister of National Revenue issued reas- sessments and determinations to taxpayers, who were remain- ing MLPs and PLPs. Taxpayers appealed on basis that Minister erred in interpreting settlement agreement. Tax Court judge dis- missed appeal. Judge found that there was valid binding agree- ment between taxpayers and Minister. Judge concluded that reassessments and determina- tions proceeded in accordance with settlement agreement as it applied to taxpayers. Judge con- cluded that phrase "on the basis consistent with" meant that same ratio of disallowed expenses that applied to SH MLP would also apply to taxpayers. Judge found that ratio to be applied for pro- ducer referral and financing fees was to be determined by dividing amount disallowed for SH MLP by total amount of incurred for those specific fees. Taxpayers ap- pealed. Appeal dismissed. Judge did not err in finding that settle- ment agreement was applicable to taxpayers, as representative who signed settlement agree- ment had capacity to conclude agreement on behalf of taxpay- ers. There were no grounds war- ranting intervention regarding judge's interpretation of phrase "on the basis consistent with". Judge did not err in determin- ing ratio or in finding there was meeting of minds. There was no reason to interfere with judge's conclusion that terms of settlement agreement were suffi- ciently certain. Judge did not err in finding that agreement was enforceable because it ref lected principled application of Income Tax Act to known facts. University Hill Holdings Inc. (Formerly 589918 B.C. Ltd.) v. Canada (2017), 2017 CarswellNat 6704, 2017 FCA 232, J.D. Denis Pelletier J.A., Richard Boivin J.A., and Mary J.L. Gleason J.A. (F.C.A.). Federal Court Aboriginal Law CONSTITUTIONAL ISSUES General principles Inappropriate to modify Parliament's specific power over Indians for protection of general power Applicant T Ltd. proposed min- ing project, which underwent environmental assessment by re- view panel. Mine site was within traditional territory of respon- dent First Nation TNG. Respon- dent Minister of Environment ("minister") and Governor in Council ("GIC") made decision pursuant to s. 52 of Canadian Environmental Assessment Act ("CEAA") that mining project was likely to cause significant ad- verse environmental effects. GIC decided that these effects were not justified in circumstances. T Ltd. brought application for judicial review. T Ltd. alleged of breaches of procedural fair- ness and jurisdictional errors, as well as constitutional challenge to ss. 5(1)(c), 6 and 7 of CEAA. Sections 5(1)(c) and 6 of CEAA appeared to be intra vires. Sub- stance of impugned provisions comes within federal Parlia- ment's power to legislate for "Indians, and Lands Reserved for the Indians" in s. 91(24) of Constitution Act, 1867. Indig- enous people have many of same interests as non-indigenous people, and these interests are often uniquely at risk in ways that interests of non-indigenous people are not. Power in s. 91(24) is specific power, and it would be inappropriate to modify this power for protection of general power. Proponent does not have right to take part in consulta- tions between Crown and First Nation. However, this is not to say that proponent may never have role in consultations. T Ltd. was afforded fair process before minister given factors including but not limited to absence of new issues or evidence raised by TNG before minister, and obligation to consult TNG. T Ltd. was owed some degree of procedural fair- ness, and this was satisfied in cir- cumstances. T Ltd.'s procedural fairness complaint was ground- ed in asymmetry between treat- ment of T Ltd. and that of TNG. However, procedural fairness does not always require symme- try and there are circumstances in which fairness necessitates de- gree of asymmetry. Taseko Mines Limited v. Canada (Environment) (2017), 2017 CarswellNat 6942, 2017 FC 1100, Michael L. Phelan J. (F.C.). Criminal Law PRISONS AND PRISONERS Regulation Outcome of grievances could not be reasonable absent consideration of disability claim Computers of certain prison- ers at federal institution were seized by Correctional Services Canada (CSC) and searched for contraband. Applicant prisoner brought grievances alleging his computer was improperly seized and retained. Assistant Com- missioner of CSC dismissed grievances. Applicant applied for judicial review. Application granted in part. Final level griev- ance decision overturned. Ap- plicant had disability, "essential tremors", and used computer to communicate. Disability aspect of applicant's grievances had not been acknowledged. Outcome could not be considered reason- able absent any consideration of disability claim. MacDonald v. Canada (At- torney General) (2017), 2017 CarswellNat 6493, 2017 Car- swellNat 7010, 2017 FC 1028, 2017 CF 1028, William F. Pent- ney J. (F.C.). Tax Court of Canada Tax INCOME TAX Administration and enforcement Distributions not needing legal character of death benefits to be classified as such for tax purposes Taxpayers E, K, M and S were all in receipt of benefits payable under former pension plan of N Corp. which became insolvent and received payments from trust set up by N Corp. to cover health and welfare claims. E and K had insurance benefits and M and S death benefits. Taxpayers filed their income tax returns for 2011 on basis that distributions were income but later filed Notices of Objection taking position that distributions were not taxable. Assessments were confirmed and taxpayers appealed. Minister sought to introduce affidavit with copies of 2011 T3 return filed by trust and 2011 Trust Notice of Assessment issued to trust. Ap- peals allowed for E and K; appeal allowed in part for M; appeal dis- missed for S. Affidavit inadmis- sible under general exclusion un- der s. 89(1) of Income Tax Rules. No indication that Minister used T3 return in assessing taxpayers. Trust not given notice of inten- tion to introduce trust's confi- dential taxpayer information as evidence. Trust provisions of Income Tax Act (ITA) not deter- minative of appeals. As specific provisions did not capture distri- butions paid in 2011 by trust to E and K, s. 6(1)(a) of ITA could not be used to fill in the gaps left by subsection 6(4) and Part XXVII or to sweep distributions into in- comeGiven that orders provided that interim distributions were to be made "on account of " In- come Benefits distributions came within s. 56(1)(a)(iii) of ITA, as amount received on account of death benefit. Amounts of dis- tributions to S and M calculated on understanding that amounts would partially replace, or be in lieu of, death benefits that would have been paid. Distributions did not need to have legal character of death benefits in order to come within s. 56(1)(a)(iii) of ITA. As- sessment of M referred back to Minister on basis that amount of 2011 distribution to be in- cluded in computing her income for 2011 was $6,152.42 and not $6,438.39. Scott v. The Queen (2017), 2017 CarswellNat 6488, 2017 TCC 224, Don R. Sommerfeldt J. (T.C.C. [General Procedure]). INCOME TAX Tax credits ADHD not physical impairment markedly restricting ability such that disability tax credit applied Taxpayer's dependent son had 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. CASELAW 2018 CANADIAN LAWYER LEGAL FEES SURVEY Survey closes January 25 Complete the survey at canadianlawyermag.com/surveys for a chance to win a $200 Amazon gift card. Check out the results in the April issue to see how your fees compare across multiple practice areas. 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