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Page 14 May 28, 2018 • Law TiMes www.lawtimesnews.com tigations. Affidavits contained no suggestion that taxpayer was under criminal investiga- tion and were made in context of civil proceeding. It was un- necessary to cross-examine em- ployees. Rules were not intended to afford taxpayer full right of discovery on application for ju- dicial review. Taxpayer did not have right to cross-examine de- cision-maker to ask if he is under criminal investigation, so R. 312 of Rules should not be applied to allow him to ask same question to employees. Campbell v. Canada (At- torney General) (2018), 2018 CarswellNat 1770, 2018 Car- swellNat 1853, 2018 FC 412, 2018 CF 412, Sébastien Grammond J. (F.C.). Tax Court of Canada Public Law SOCIAL PROGRAMS Employment insurance Effective control was control that could be freely exercised B Inc. was held by L, M and G Inc. with L holding 25.7 percent of votes and M holding 24.8 per- cent of votes. G Inc. was held in equal portions by L and M. Min- ister of National Revenue decid- ed that jobs of M and L were in- surable jobs under Employment Insurance Act. B Inc. appealed. Appeal allowed. For job to be excluded under terms of s. 5(2) (b) of Act, employee must con- trol more than 40 percent of em- ployer's voting shares. Effective control was control that could be freely exercised and not impeded by circumstances independent of person having control. Fed- eral Court of Appeal had found that for purposes of s. 5(2)(b), ad- ministrative control of company was not relevant but rather that it was control of its voting shares that was important. Jobs of L and M for B Inc. during period were not insurable employment within meaning of Act because s. 5(2)(b) was applicable. Apply- ing Act in manner put forward by Crown would give results that were absurd and contrary to purpose of Act. Équipements Boifor Inc. c. M.N.R. (2018), 2018 Carswell- Nat 1209, 2018 CarswellNat 1210, 2018 TCC 53, 2018 CCI 53, Dominique Laf leur J. (T.C.C. [Employment Insurance]). Tax INCOME TAX Source of income Amount of personal loan contract not to be included in computing income for tax purposes Taxpayer immigrated from Belarus to Canada. Taxpayer's parents-in-law also immigrated to Canada and lived with tax- payer and his wife. Taxpayer incorporated B Inc. and in 2011 and 2012, taxpayer was only shareholder of B Inc. and was its main employee. In 2011, taxpayer and his father in law signed loan contract providing that father-in-law was to provide $15,000 interest-free loan to tax- payer. Taxpayer and his father in law also alleged that additional smaller amounts were advanced in various increments. Taxpayer testified that in 1997, he loaned $25,000 to acquaintance IB, who died before repaying loan, and that VB, as loan guarantor, made partial loan repayments. CRA conducted bank deposit analysis of taxpayer and B Inc. for 2011 and identified subject deposits which it characterized as unreported income of B Inc. and taxpayer. Taxpayer was re- assessed for 2011 and 2012 taxa- tion years. Taxpayer appealed. Appeals allowed and reassess- ments referred back to Minister of National Revenue on speci- fied grounds. Reassessments confirmed in all other respects. Specified deposits under $200 were not to be included in com- puting taxpayer's or B Inc.'s in- come for 2011. If reassessments for 2011 included amounts of $7,090 and $5,000 deposited to joint account of taxpayer and his wife, total of unidentified deposits that may be treated as unreported income of tax- payer and B Inc. was limited to $24,879.15 less specified amount of exclusion. If reassessments for 2011 did not include amounts of $7,090 and $5,900 deposited to joint account, those amounts were not to be included in com- puting incomes of taxpayer and B Inc. for purposes of new reas- sessments. Amount that was subject of personal loan contract between taxpayer and his father in law was not to be included in computing taxpayer's or B Inc's 2011 income. Semenov v. The Queen (2018), 2018 CarswellNat 1154, 2018 TCC 58, Don R. Sommer- feldt J. (T.C.C. [Informal Proce- dure]). Ontario Civil Cases Bankruptcy and Insolvency DISCHARGE OF BANKRUPT Practice and procedure Bankrupt ordered to pay trustee costs on partial indemnity basis Bankrupt declared bankruptcy after marriage ended. Bank- rupt's discharge was annulled for failure to disclose disposition of foreign property. Bankrupt defaulted on proposal to credi- tors despite having received ap- proximately same amount of money from matrimonial settle- ment and sale of shares. Reg- istrar noted failure to disclose assets, failure to perform con- sumer proposal, and failure to account for loss of assets to meet liabilities, determined bankrupt could not be absolutely dis- charged, and ordered payment of $61,000 as condition of dis- charge. Bankrupt's appeal and motion to admit fresh evidence almost three years later was dis- missed. Registrar was found to have weighed all relevant fac- tors and correctly concluded that unconditional discharge would undermine integrity of bankruptcy system, that mental illness was not shown to have bearing on issue, that there was no explanation for dissipation of funds, and that fresh evidence was neither sufficiently credible nor probative to have likely af- fected result. Hearing was held to determine costs. Bankrupt was ordered to pay trustee costs on partial indemnity basis of $4,250. Bankrupt had to be tak- en to have known that appealing included risk of increasing his burden. Bankrupt's request to take trustee's costs from $61,000 he was ordered to pay estate was not fair to creditors. Bankrupt blamed everyone else and it was appropriate that he bear respon- sibility for decisions and natural outcome of advice upon which he chose to act. That said, sub- stantial indemnity costs were not warranted as bankrupt's al- legations impugning trustee's conduct were not of sufficient severity or made with sufficient particularity to put trustee's rep- utation at risk. Costs of $6,915.31 trustee claimed were modest in comparison to costs of lawyer. Trustee performed work coun- sel would have been expected to perform and saved estate and bankrupt significant legal fees. Kuczera (2017), 2017 Car- swellOnt 15086, 2017 ONSC 5699, F.L. Myers J. (Ont. S.C.J. [Commercial List]); additional reasons (2017), 2017 Carswel- lOnt 13306, 2017 ONSC 5140, F.L. Myers J. (Ont. S.C.J. [Com- mercial List]). PROPOSAL Practice and procedure Bilateral confidentiality terms could not supersede court ordered production of relevant documents Creditor W Corp. agreed to provide services to debtor on basis that W Corp.'s claim for fees would be secured by general security agreement. W Corp. alleged debtor owed it fees for services rendered, but debtor de- nied liability. W Corp. brought action against debtor to enforce its security interest. Debtor al- leged security interest had not become effective and also that it was to be discharged if debtor reached settlement with credi- tor Z, which it did. Meanwhile, proposal filed by debtor under Bankruptcy and Insolvency Act had been approved, and W Corp. intended to bring motion to have approval annulled. W Corp. brought motion for order requiring debtor to produce set- tlement agreement and related correspondence. Application granted. Central relevancy of settlement agreement was obvi- ous. Any settlement privilege claimed, if it applied, had to yield to interests of justice in assessing appropriateness of approval of proposal and parties' compet- ing claims on facts of this case. If facts asserted by W Corp. about Z's improper involvement in proposal vote were proven true, then integrity of proposal pro- cess, including proposal trustee's role, was very much in question. Need for scrutiny of agreements among proposal debtors and interested parties necessar- ily implied that such agreements could not be confidential. Bilat- eral confidentiality terms could not supersede court ordered production of relevant docu- ments, and apart from questions of proportionality, production did not turn on strength of un- derlying case. Re Emery Silfurtun Inc. (2017), 2017 CarswellOnt 13270, 2017 ONSC 5768, F.L. Myers J. (Ont. S.C.J. [Commercial List]). Civil Practice and Procedure PRE-TRIAL PROCEDURES Severance Master had jurisdiction to order bifurcation in non-jury trial without parties' consent Infant plaintiff was injured in fall from window of community housing unit. Evidence was that infant plaintiff 's injuries could not be fully assessed for at least five years. Defendant moved to separate issues of liability and damages which was granted. Plaintiffs appealed. Appeal dis- missed. Intended purpose of Rule 6.1.01 of Rules of Civil Pro- cedure was to modestly expand jurisdiction of court to allow bi- furcation in jury trials in accor- dance with the new rule, but only with consent of parties. Master was correct in concluding he had jurisdiction to make order for bifurcation in non-jury trial without parties' consent relying on court's inherent jurisdiction in exceptional circumstances of case. Bifurcation was efficient, and would promote settlement. Bifurcation of liability and dam- ages issues in interests of justice for parties, consistent with pur- pose in Rule 1.04. Intended pur- pose of Rule 6.1.01 of Rules of Civil Procedure was to modestly expand jurisdiction of court to allow bifurcation in jury trials in accordance with the new rule, but only with consent of parties. Master was correct in conclud- ing he had jurisdiction to make order for bifurcation in non- jury trial without parties' con- sent relying on court's inherent jurisdiction in exceptional cir- cumstances of case. Master not required to follow majority obi- ter decision of Divisional Court that inherent jurisdiction to bifurcate in exceptional circum- stances for non-jury trials abol- ished by Rule 6.1.01. Divisional Court decision did not consider Supreme Court of Canada de- cision fundamentally shifting parameters of conduct of civil litigation. Ratio decidendi of Di- visional Court decision should be read narrowly as applying to court's jurisdiction to bifurcate jury trials. Duggan v. Durham Region Non-Profit Housing Corpora- tion (2018), 2018 CarswellOnt 5626, 2018 ONSC 1811, J. Wilson J. (Ont. S.C.J.); affirmed (2017), 2017 CarswellOnt 13269, 2017 ONSC 4875, Master D.E. Short (Ont. S.C.J.). SUMMARY JUDGMENT Requirement to show no triable issue Agent (adjuster) could not be held liable in contract to contractor Defendant owner's property was damaged in fire, it advised defendant insurer, and insurer retained defendant insurance adjuster. Plaintiff contractor was chosen to perform emergency repairs on property, and it had not been paid for its work. Con- tractor brought action under Construction Lien Act for pay- ment for work. Owner claimed it did not request contractor to do work, adjuster claimed it requested work as agent, and insurer claimed that owner was supposed to pay for work. Apart from fire that gave rise to claim, city pipe burst and caused damage to premises occupied by owner's tenant, insurer was also tenant's insurer, and con- tractor performed work to re- pair tenant's unit. Contractor brought motion for summary judgment which was dismissed; insurer and adjuster succesfully brought motion for summary dismissal of contractor's claims. Contractor appealed. Appeal dismissed. Motion judge did not err in finding that there was no contract between contractor and one or both of insurer and adjuster. Motion judge did not err in focusing only on written document signed by contractor. Contract pleaded was contract made January 23, 2014. Clearly, agreement signed was between L Ltd. and contractor, and not with insurer or adjuster. Indeed, in accordance with law respect- ing disclosed principal, the agent (adjuster) cannot be held liable in contract to contractor. AACR Inc. v. Lixo Invest- ments Limited (2018), 2018 CarswellOnt 6997, 2018 ONSC 2774, Swinton J., Sachs J., and Corthorn J. (Ont. Div. Ct.); af- firmed (2017), 2017 CarswellOnt 7409, 2017 ONSC 1009, Pollak J. (Ont. S.C.J.). Environmental Law LIABILITY FOR ENVIRONMENTAL HARM Practice and procedure Not appropriate to apportion costs on same percentage basis as liability After defendant D Ltd. delivered fuel to plaintiff G's fuel tank, oil leaked from G's property and ran into lake and contaminated soil. Municipality ordered G to contribute to its remediation costs. G brought action against number of defendants, including D Ltd. and regulatory author- ity, TSSA. Trial judge awarded CASELAW

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