Law Times

Page 14 June 4, 2018 • Law Times www.lawtimesnews.com CASELAW Supreme Court of Canada Constitutional Law CONSTITUTIONAL LAW Definitions Section 121 of Constitution Act, 1867 does not impose absolute free trade across Canada Admitted free. Accused travelled from New Brunswick to purchase cheaper alcohol, amounting to 15 cases of beer and 3 bottles of hard liquor, in Quebec. Accused was acquitted of offence under s. 134(b) of Liquor Control Act which barred possession of liquor, beyond limited quantity, that was not purchased from New Bruns- wick liquor commission. Trial judge found Supreme Court of Canada precedent held that s. 121 of Constitution Act, 1867, provid- ing that products of any province must be "admitted free" into other provinces, did nothing more than protect movement of Canadian goods against interprovincial custom duties or charges. Trial judge found evidence of historical expert established that "admitted free" had broader and more com- prehensive meaning than "admit- ted free of duty". Trial judge found nothing in wording of provision support inference that meaning of term was restricted to "admit- ted free of duty" but rather sup- ported opposite view that it meant free trade, as trade barriers with United States were uppermost in minds of politicians during con- stitutional moment and British policy favoured free trade. Trial judge found intent of drafters of Constitution Act, 1867 was to re- place loss of free trade American market with free trade Canadian market. Trial judge found state- ments by Fathers of Confedera- tion were consistent with intent to form strong and harmonious eco- nomic union based on free trade, without allowing non-tariff bar- riers to be imposed. Trial judge found contrary to Crown's ex- pert's view that words "admitted free into" suggested border cross- ing where customs were levied, nothing in words "admitted free into" could possibly lead to very strict interpretation confining its meaning to prohibiting customs. Trial judge found robust inter- pretation of s. 121 of Constitution Act, 1867 would create conf lict with exercise of provincial pow- ers and would dismantle regime in place involving governments' multitude of restrictive measures and policies imposing interpro- vincial trade barriers. Trial judge found important consideration of original purpose of provision at is- sue should not be displaced mere- ly by notions of what amounted to request for accommodation based on long-standing misin- terpretation of intent of Fathers of Confederation. Trial judge found narrow and strict interpretation placed upon s. 121 of Constitu- tion Act, 1867 in Supreme Court of Canada was unwarranted and unfounded, and it had shaped all subsequent cases dealing with provision. Section 134(b) of Act constituted trade barrier violating s. 121 of Constitution Act, 1867 and was of no force and effect as against accused. Crown appealed. Appeal dismissed. Section 121 of Constitution Act, 1867 does not impose absolute free trade across Canada, and does not prohibit governments from adopting laws and regulatory schemes directed to other goals that have incidental effects on passage of goods across provincial borders. Federalism principle and purposive approach where provinces could legislate within their jurisdiction even where such laws may inciden- tally limit passage of goods over provincial borders. Provincial law functioned like tariff at ex- treme end of spectrum, however, text and effects were aligned and suggested primary purpose of s. 134(b) of Act was not to impede trade, rather to restrict access to any non-corporation liquor. Broader legislative scheme in- volved New Brunswick's capacity to regulate how liquor is managed within province and enable pub- lic supervision of production, movement, sale, and use of alco- hol within New Brunswick. R. v. Comeau (2018), 2018 CarswellNB 124, 2018 Carswell- NB 125, 2018 SCC 15, 2018 CSC 15, McLachlin C.J.C., Abella J., Moldaver J., Karakatsanis J., Wagner J., Gascon J., Côté J., Brown J., and Rowe J. (S.C.C.); reversed (2016), 2016 Carswell- NB 445, 2016 CarswellNB 446, M.E.L. Larlee J.A. (N.B. C.A.). Federal Court of Appeal Public Law SOCIAL PROGRAMS Employment insurance Source of payment not pertinent for purposes of s. 36(9) of Employment Insurance Regulations Employee's appeal to Appeal Di- vision of Social Security Tribu- nal was dismissed. Employee ap- plied for judicial review to Feder- al Court of Appeal. Application dismissed. Decision of Appeal Division of Social Security Tri- bunal was reasonable. Source of payment not pertinent for pur- poses of s. 36(9) of Employment Insurance Regulations, only that it was paid by reason of layoff. Indemnity became payable as of date of layoff when employee be- came unemployed. Champagne c. Canada (Procureur général) (2018), 2018 CarswellNat 1914, 2018 CAF 79, Nadon J.A., Richard Boivin J.A., and de Montigny J.A. (F.C.A.). Tax INCOME TAX Administration and enforcement Court had no authority to dispense with compliance with three-judge requirement Taxpayers made request for ad- journment of proceeding in Tax Court because they claimed that their representative had only be- come aware of trial date recently – Hearing coordinator refused request for adjournment. Taxpay- ers asked Associate Chief Justice of Tax to reconsider refusal of adjournment. In Federal Court of Appeal, taxpayers brought motion to appeal Tax Court's de- cision to refuse request for post- ponement and sought order un- der R. 55 of Federal Courts Rules that dispensed with R. 341, 343 and 348 so that it could be heard by one judge, and order under R. 8 expediting hearing of appeal. MOTION DISMISSED. Court had no authority to dispense with compliance with three-judge requirement established by Par- liament. It was inappropriate to dispense with Rules and expedite hearing as taxpayers proposed, as to proceed into hearing as pro- posed by taxpayers would not be orderly or fair to parties or court. 6260268 Canada Inc. v. Construction GMR Inc. (2018), 2018 CarswellNat 1412, 2018 FCA 70, J.B. Laskin J.A. (F.C.A.). Tax Court of Canada Tax INCOME TAX Administration and enforcement No reason to second guess taxpayer's fair market value figure since taxpayer was realtor Taxpayer's son owned property and rented it to occupants who used it as marijuana grow-op. Taxpayer funded renovations to house in amount of $22,353 and allowed her daughter and grand- child to live on property. In year of transfer to taxpayer, city issued property tax notice for taxes due and showed assessment value of $136,700 for property. Property was transferred to taxpayer at time when son was tax debtor who owed $42,213. Minister assessed tax- payer under s. 160 of Income Tax Act in amount of $42,213 on basis that fair market value of property at date of transfer was $150,000 and consideration received was $104,000, including mortgage as- sumed, insurance and property management fees, but not includ- ing renovation expenses. Tax- payer appealed. Appeal allowed. Matter was remitted to Minister for reconsideration. Fair market value of property was $150,000, as per taxpayer's signed statement on date of transfer, and there was no reason to second guess figure since taxpayer was realtor. Reno- vation expenses of $22,353 should be added to consideration figure on same basis that Minister al- lowed deemed property manage- ment fees as recognition of tax- payer's continuing maintenance and repair of residential structure as necessary. Deemed property management amount allowed by Minister should be reduced by 50 per cent in light of daughter and grandchild having lived on prop- erty during much of renovation period. Thompson v. The Queen (2018), 2018 CarswellNat 1277, 2018 TCC 64, B. Russell J. (T.C.C. [General Procedure]). INCOME TAX Tax credits Taxpayer's donation not constituting gift in absence of donative intent Taxpayer's brother was co- founder of charitable organiza- 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. This is more than a phone book. 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