Law Times

Page 18 April 23, 2018 • lAw Times www.lawtimesnews.com and provincial income taxes for four years, for company's non- remittance of net Good and Ser- vices Tax/ Harmonized Sales Tax (GST/HST) for 2.5 years, and for company's non-remit- tance of employment insurance (EI) premiums and Canada Pension Plan (CPP) contribu- tions for four years. Director ap- pealed. Appeals dismissed. Di- rector did not establish entitle- ment to due diligence defence. Director's general focus was to continue with non-remittances while keeping his company go- ing so that in longer term some- one would buy or invest in com- pany so he could obtain funding to reimburse Canada Revenue Agency (CRA). Director did not take steps to stop failures to make remittances. CRA was pursuing director for payments more than director was engaged in seeking to satisfy CRA for continuing non-remittances. Fox v. The Queen (2018), 2018 CarswellNat 724, 2018 Car- swellNat 918, 2018 TCC 43, 2018 CCI 43, B. Russell J. (T.C.C. [In- formal Procedure]). INCOME TAX Tax credits Proper meaning of word "therapy" in disability tax credit provisions meant care or treatment of physical or mental condition Taxpayer's dependent daughter was born with phenylketonuria (PKU), which required follow- ing very specific dietary treat- ment plan to avoid brain dam- age. Canada Revenue Agency (CRA) determined that taxpayer was not entitled to claim dis- ability tax credit in respect of her daughter because impairment related to dietary restriction and treatment activities consisted of following dietary regime. Tax- payer appealed. Appeal allowed. Taxpayer spent more than 14 hours weekly on average on treatment and management of daughter's PKU, after some ad- justments to taxpayer's calcula- tions. Some f lexibility in preci- sion of hours should be allowed in these cases. Proper meaning of word "therapy" in disability tax credit provisions meant care or treatment of physical or men- tal condition. Scope of qualify- ing activities in case of PKU was described in another judgment. Therapy sustained daughter's vital mental functions, as with- out it, she would have potentially devastating and irreversible damage to her mental function- ing. Daughter's treatment was not simply dietary restriction. Counting and managing con- sumption of phenylalanine was more like administering medi- cation than managing diet. Im- pairment that limited what per- son was capable of processing as nutrition without causing severe bodily damage might be con- sidered in giving humane, com- passionate and common sense interpretation to requirement of marked restriction in feeding him or herself. Hughes v. The Queen (2018), 2018 CarswellNat 1262, 2018 CarswellNat 725, 2018 TCC 42, 2018 CCI 42, Patrick Boyle J. (T.C.C. [Informal Procedure]). Ontario Civil Cases Bankruptcy and Insolvency ADMINISTRATION OF ESTATE Sale of assets Gross Overriding Royalties did not run with land or grant holder interest in lands At request of insolvent company's lender (Third Eye), court-appointed receiver over assets, undertaking and property, including mining claims. Certain claims were subject to Gross Overriding Royalty (GOR) in favour of company from which appellant 235 Co. had acquired royalty rights. Notices of agreements granting GOR's were registered on title to surface and mining rights. Order approving bid process for sale of insolvent's mining claims generated two bids, both with condition that GOR's be terminated or reduced. Third eye was successful. Motion judge approved sale to Third Eye and granted vesting order purporting to extinguish GORs. Motion judge rejected 235 Co.'s argument that claims would continue to be subject to GORs after their transfer to Third Eye holding that GORs did not run with land or grant holder of GORs interest in lands over which insolvent held mineral rights. Motion judge also held that ss. 11(2), 100, and 101 of the Courts of Justice Act gave him "the jurisdiction to grant a vesting order of the assets to be sold to Third Eye on such terms as are just", including authority to dispense with royalty rights. Expert's valuation of royalty rights were found to be fair and receiver paid this amount to 235 Co., which were held in trust. 235 Co was unsuccessful in its cross-motion claiming payment for debt owing under Repair and Storage Liens Act. 235 Co. appealed. In holding that royalty rights created no interest in law, vesting order was granted whereby receiver sold mining rights to third- party purchaser, free and clear of royalty rights. Vesting order was not stayed pending appeal and was executed. Court declined to determine that appeal was moot since vesting order had been executed. Further submissions were requested on whether Superior Court had jurisdiction to grant vesting order free and clear of royalty rights and whether or not appeal was moot. Third Eye Capital Corporation v. Ressources Dianor Inc./Dianor Resources Inc. (2018), 2018 CarswellOnt 3694, 2018 ONCA 253, P. Lauwers J.A., S.E. Pepall J.A., and Grant Huscroft J.A. (Ont. C.A.); affirmed (2016), 2016 CarswellOnt 15947, 2016 ONSC 6086, Newbould J. (Ont. S.C.J. [Commercial List]). Civil Practice and Procedure CLASS AND REPRESENTATIVE PROCEEDINGS Representative or class proceedings under class proceedings legislation Proceeding stayed in favour of arbitration in another country Class action. Plaintiff brought proposed $400 million class ac- tion on behalf of drivers who drove for defendant ride sharing app. Defendants brought suc- cessful motion for order staying proceeding in favour of arbitra- tion in another country. Defen- dants sought indemnification of $158,000, approximately 54 per cent of total fees and disburse- ments they claimed. Having regard to normal factors, appro- priate award to defendants was $65,000 all inclusive. Case did not raise novel issue, nor was it matter in public interest. Defen- dants undoubtedly knew from outset of their retainer that their clients' legal position was ex- traordinarily strong, but team of four lawyers and two paralegals were assigned to file. Lawyer's time expended was 437.2 hours with student and clerks expend- ing another week of work. Sub- jective reasonable expectations of losing party in class action were no longer reasonable. Both sides over-litigate, knowing that over litigating is what their foe will be doing and knowing that court will not second-guess law- yer's decision. Plaintiff 's rejec- tion of offer to settle did not at- tract costs consequences. Heller v. Uber Technologies Inc. (2018), 2018 CarswellOnt 3867, 2018 ONSC 1690, Perell J. (Ont. S.C.J.); additional reasons (2018), 2018 CarswellOnt 1090, 2018 ONSC 718, Perell J. (Ont. S.C.J.). COSTS Effect of success of proceedings Defendant bore no civil liability to plaintiff for events that gave rise to plaintiff 's claim Plaintiff brought motion for summary judgment based on tort of negligent investigation. Court dismissed plaintiff 's mo- tion. Defendant sought costs of motion. Defendant awarded $30,000. It was found that there was no reason to have departed from approach generally taken in relation to entirely success- ful defendant. Defendant bore no civil liability whatsoever to plaintiff for events that gave rise to plaintiff 's claim. There was potential concern about not having received details that con- cerned precise nature of work, or extent of work, that lawyers, student and clerk did on de- fendant's case. However, it was found that time spent on matter was not excessive. J.H. v. Windsor Police Ser- vices Board (2018), 2018 Car- swellOnt 3300, 2018 ONSC 11, I.F. Leach J. (Ont. S.C.J.); addi- tional reasons (2017), 2017 Car- swellOnt 16803, 2017 ONSC 6507, I.F. Leach J. (Ont. S.C.J.). TRIALS Jury trial Evidence obtainable prior to trial by exercise of reasonable diligence by plaintiff During jury trial, plaintiff failed to present evidence on claim of past and future care costs, in- cluding medical, drug, therapy and housecleaning costs. Plain- tiff claimed failure to adduce evidence on past and future care costs was mistake. Plaintiff brought motion for order that questions relating to past and future care cost be put to jury. Motion dismissed. Evidence was obtainable prior to trial by exer- cise of reasonable diligence by plaintiff. It would conflict with purpose and role of jury if jury determined if future care costs claim was viable and then, after hearing another mini-trial, judge determined extent, duration and quantum of future care costs. Tracey v. Moore et al (2017), 2017 CarswellOnt 21434, 2017 ONSC 7568, P.W. Sutherland J. (Ont. S.C.J.). Estates and Trusts ESTATES Dependants' relief legislation Applicant not meeting definition of "cohabit" because never living together with deceased Applicant woman B alleged that she was dependant spouse of de- ceased because she was supported by him and lived in committed re- lationship continuously for seven years. B also alleged that deceased had intention to treat her daugh- ter, applicant child A, as child of his family and provided her with support such that she was depen- dant. Application judge dismissed A and B's application for depen- dants' relief. Judge held that B was not dependant spouse under s. 57 of SLRA. Judge found that B did not meet criterion to fall within definition of "cohabit" in Family Law Act and Succession Law Re- form Act (SLRA) because B never lived together with deceased, and found there were at least two sig- nificant interruptions in relation- ship. Judge found that evidence as to deceased having settled inten- tion to treat A as child of his fam- ily consisted of B's opinions. Judge found that there was no direct evi- dence from A, financial evidence was equivocal, and that there was circumstantial evidence that de- ceased did not intend to treat A as child of his family. A and B ap- pealed. Appeal dismissed. There was no reason to interfere with judge's decision. Judge took into account various factors and sup- ported his findings with evidence. Proposed fresh evidence was not admitted. Fact that A and B were granted Canada Pension Plan sur- vivor benefits had no relevance in determining their application for dependants' relief under SLRA. Kerzner Estate, Re (2018), 2018 CarswellOnt 3732, 2018 ONCA 258, Alexandra Hoy A.C.J.O., R.G. Juriansz J.A., and B.W. Miller J.A. (Ont. C.A.); af- firmed (2017), 2017 Carswel- lOnt 13593, 2017 ONSC 4954, S.F. Dunphy J. (Ont. S.C.J.[Estates List]). ESTATES Legacies and devises Rule providing for payment of interest on legacies in will if payment delayed for more than one year Testator was survived by son and two daughters. Sisters unsuc- cessfully challenged will that left most of property to their brother. Litigation then arose concerning whether brother, as estate trustee, should be paying sisters interest on money they were left under will. If sisters were entitled to in- terest, money would come out of brother's share of estate, since he was residuary beneficiary. Appli- cation judge, in effect, recognized that there was rule providing for payment of interest on legacies in will if those legacies were payable but payment had been delayed for more than a year ("rule of convenience"). Application judge decided not to apply rule. Sisters appealed. Appeal allowed; sisters were to be paid interest. Applica- tion judge erred in principle by linking entitlement of sisters to interest to reasonableness of ex- pectation that estate could be dis- tributed within a year; in giving undue weight to role that appro- priately conducted, non-frivolous will challenge played in delay; in considering payment of interest to be reward or penalty; and in re- lying on sisters' statuses as estate trustees. If there was discretion to deny interest to legatees, it could only apply in clearest of cases. Rate of interest to be applied was 5 per cent interest rate that "rule of convenience" currently carried at common law. Prejudgment in- terest provisions did not apply. Rivard v. Morris (2018), 2018 CarswellOnt 2841, 2018 ONCA 181, David M. Paciocco J.A., Paul Rouleau J.A., and G.T. Trot- ter J.A. (Ont. C.A.). Family Law CUSTODY AND ACCESS Access Father granted phased-in unsupervised access Father's access was supervised due to incident in 2007 which resulted in conviction for sexu- ally assaulting step-daughter of then brother-in-law. Father was sentenced to 90 days in jail to be served intermittently and to period of probation. Assessment report recommended transition over time from supervised access to unsupervised access. Father sought review of access and court requested updated assessment report. Report recommended CASELAW

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