Canadian Appeals Monitor Information and Commentary on Upcoming and Recent Appeal Court Decisions

Tag Archives: Income Tax Act

Government Cannot Withhold a Hidden Agenda in its Dealing with the Courts

Posted in Administrative, Case Comments, Procedure, Tax

A case recently decided by the Federal Court of Appeal reiterates the very high standard of good faith to which the Minister of National Revenue (the “Minister”) must be held when dealing with the courts in the context of an ex parte application provided by the Income Tax Act (“ITA”). For example, the Minister cannot ignore and omit to mention internal evidence which it knows weakens its position, or hide ulterior motives.

Context: Third-Party Information Concerning “10-8” Plans

In Canada (National Revenue) v. RBC Life Insurance Company, 2013 FCA 50 (“RBC Life”)[1], the

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This Week at the SCC (22/02/2013)

A Commentary on Recent Legal Developments by the Opinions Group of McCarthy Tétrault LLP

Posted in This Week at the SCC

This week, the Supreme Court of Canada heard arguments in one case likely to be of interest to Canadian businesses and professions.  Judgment was reserved.

The appeal to the Supreme Court is from the ruling in Daishowa-Marubeni International Ltd. v. Her Majesty the Queen, 2011 FCA 267.  At issue is the proper tax treatment of long-term, contingent reforestation liabilities (imposed by statute).  The taxpayer subject to the reforestation liabilities had disposed of the relevant operating assets.  The purchaser of those assets has assumed responsibility for the liabilities.  The Federal Court of Appeal ruled that the purchaser’s assumption of … Continue Reading

Craig and Prokofiew — A Tale of Two Cases: The SCC Considers the Precedential Effect of its Obiter Dicta

Posted in Case Comments, Constitutional, Criminal

As discussed in a previous post, the Supreme Court of Canada, in Canada v. Craig, overruled one of its own precedents, on the basis that there were compelling reasons indicating that the precedent’s interpretation of a provision of the Income Tax Act was incorrect. This interpretation was part of the precedent’s ratio decidendi and not obiter. At the same time, the Supreme Court in Craig held that the lower courts were bound by this interpretation and were not at liberty to depart from it.

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SCC to Consider Rectification of Contracts

Posted in Case Previews, Contracts, Tax

The Supreme Court of Canada has granted leave to appeal in a case involving the rectification of contracts. The appeal in Services Environnementaux raises the question of whether Quebec law permits the rectification of agreements, in a manner that is retroactively enforceable against tax authorities, when their written terms diverge from the common intentions of the parties.

As part of a reorganization of the first respondent, Centre technologique, the second respondent, AES, decided to sell some of its shares in Centre technologique to a third party. AES and Centre technologique the entered into a reorganization agreement in which AES exchanged … Continue Reading

SCC to Consider the Residence of Trust for Tax Purposes

Posted in Case Previews, Corporate Law, Financial Services, Tax

The residence of trusts and other business entities for income tax purposes has long been a source of confusion.  The Supreme Court of Canada will attempt to resolve that confusion in the St. Michael Trust cases, from which it recently granted leave to appeal.

Decisions Below

The cases arise as conjoined appeals from the decision of the Federal Court of Appeal in St. Michael Trust Corp. v. Canada (sub nom. Garron (Trustee of) v. Canada). In both cases, the applicant was a Barbados-resident corporation that was the trustee of a trust with Canadian beneficiaries, which was settled by … Continue Reading