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Imposition of GST on lawyers’ fees did not infringe Charter rights
Determination of question of whether or not imposition of GST on lawyers’ fees for criminal defence services infringed rights of registrants’ clients under s. 10(b) of Canadian Charter of Rights and Freedoms on appeal by registrant from assessment and imposition of interest and penalty under Excise Tax Act (Can.). Registrant law corporation failed to collect and remit GST on legal services it provided. It was determined that imposition of GST on lawyers’ fees did not infringe client’s Charter rights. It could not be said that s. 165(1) of Act had specific purpose of taxing legal services in defence of state-sponsored prosecution. Parliament did not single out those particular services for different treatment under provision and registrant failed to show that s. 165(1) of Act had invalid purpose. Registrant did not provide any reasonably imaginable circumstances or hypotheticals that would demonstrate breach of s. 10 (b) rights. Right to counsel under s. 10(b) of Charter was not ongoing right throughout preparation and hearing stages, but was limited to time surrounding arrest or detention. Constitutionality of GST on criminal defence services was not question of law alone, and it was not apparent on its face that tax would impede access to counsel.
Stanley J. Tessmer Law Corp. v. R. (Jan. 28, 2013, T.C.C. [General Procedure], B. Paris J., File No. 2007-3627(GST)G, 2007-3628(GST)G, 2007-3629(GST)G, 2007-3630(GST)G, 2007-3631(GST)G) 224 A.C.W.S. (3d) 508.
Mandamus available to prevent further delay and harm to inmate
Court overturned Minister’s decision denying inmate, Canadian citizen in low security jail in United States transferred to serve sentence in Canada. Minister found inmate was at risk to commit criminal organization offence; court quashed the Minister’s refusal because in his reasons he did not demonstrate weighing of s. 10 of International Transfer of Offenders Act (Can.) factors, as he was required to do. Matter had been returned to Minister, who once again declined transfer; court found Minister paid lip service to appeal judgment, simply reasserted his earlier reasoning, was operating with closed, intransigent mind, and ordered Minister within 45 days to accept inmate’s transfer request and confirm in writing to inmate that all reasonable steps had been taken for his prompt transfer to correctional facility in Canada. Court found Federal Court’s findings that Minister displayed closed mind and intransigency in his re-decision and paid lip service to court’s earlier decision were factual findings supportable on basis of record; only live issue was whether, as matter of law, it was open to Federal Court to make mandatory order, rather than sending matter back for another re-decision. Appeal dismissed with costs. Court did not accept Federal Court restrained as suggested by Minister. Federal Court found Minister’s conclusion that there was significant risk that inmate would commit criminal organization offence to be unsupported by evidence, and Crown did not contest this. With that factor off table, all that remained were factors supporting transfer. In circumstances, it was open to Federal Court to conclude on evidence that only lawful exercise of discretion was granting of transfer: in such circumstances, mandamus lies. In unusual circumstances of case, mandamus was also available to prevent further delay and harm that would be caused to inmate if Minister were given third chance to decide this matter in accordance with law. In circumstances where Minister did not follow court’s earlier decision, paid “lip service” to it, and displayed “closed mind” and “intransigency”. Federal Court’s exercise of discretion in favour of making mandatory order against Minister had foundation in evidentiary record.
Lebon v. Canada (Minister of Public Safety and Emergency Preparedness) (Feb. 25, 2013, F.C.A., David Stratas J.A., Sharlow J.A., and Webb J.A., File No. A-39-13) Decision at 104 W.C.B. (2d) 769 was reversed in part. 105 W.C.B. (2d) 166.
INADMISSIBLE AND REMOVABLE CLASSES
Rehabilitation of claimant after committing crime irrelevant
This was appeal of dismissal of application for judicial review. Appellant was national of Albania. Greek court found that appellant fatally stabbed another Albanian while living in Greece during fight. Appellant was convicted and released. He could no longer live in Albania because killing provoked blood feud between his family and deceased’s family. Appellant came to Canada and claimed refugee protection. Delegate of respondent Minister refused to provide opinion that appellant was dangerous. Claim for refugee protection was not ineligible to be referred to the Refugee Protection Division (“RPD”). Minister of Public Safety and Emergency Preparedness (“MPSEP”) intervened. RPD rejected appellant’s claim for refugee protection on ground that he was excluded from definition of refugee by Article 1F(B) of United Nations Convention relating to the Status of Refugees. Application judge dismissed application for judicial review. Appeal dismissed. Claimant’s dangerousness was not relevant to determination of whether claim was excluded from refugee definition by Article 1F(b). Fact that respondent declined to provide opinion that appellant was danger to public in Canada did not estop MPSEP from intervening before RPD to argue for exclusion. Issues at eligibility and exclusion stages were different. MPSEP did not unreasonably exercise discretion to intervene. Rehabilitation of claimant after committing crime and current dangerousness were irrelevant at exclusion stage. Appellant’s crime was presumptively serious because if he had been found guilty in Canada of equivalent crime of manslaughter, he could have been sentenced to maximum of at least ten years’ imprisonment. RPD’s overall conclusion on material before it that there were serious reasons for considering that appellant committed serious crime was not unreasonable.
Feimi v. Canada (Minister of Citizenship and Immigration) (Dec. 7, 2012, F.C.A., Evans, Sharlow and Stratas JJ.A., File No. A-90-12) Decision at 216 A.C.W.S. (3d) 989 was affirmed. 223 A.C.W.S. (3d) 851.
Egregious conduct by immigration consultant led to breach of fairness
Applicant came to Canada as farm worker on temporary foreign worker program. Applicant returned to country of origin. Applicant returned to Canada on visa and overstayed visa. Immigration consultant indicated immigration consultant was lawyer and had applicant sign blank forms. Immigration consultant called applicant once only to advise about requirements of pre-removal risk assessment application (“PRRA”). Immigration consultant told applicant it was not necessary to obtain supporting documents. Immigration consultant never showed applicant completed copy of PRRA. Applicant received negative PRRA. Officer determined applicant provided insufficient evidence to establish risk asserted. Officer found it unreasonable for applicant not to make refugee claim while applicant was on valid work permit. Officer found it unreasonable for applicant not to have submitted any supporting documentation. Application for judicial review was allowed. Facts of case presented egregious conduct by immigration consultant that led to breach of procedural fairness. Immigration consultant lacked any degree of professionalism and competence when it came to preparing applicant’s PRRA. PRRA package submitted by immigration consultant was woefully inadequate. Not to allow applicant fair chance to have case assessed would be offensive to Canadian values.
Brown v. Canada (Minister of Citizenship and Immigration) (Nov. 8, 2012, F.C., James Russell J., File No. IMM-3364-12) 224 A.C.W.S. (3d) 427.
Charter of Rights
RIGHT TO COUNSEL
Accused trying to delay matters by firing counsel on eve of trial
Accused sought counsel be appointed for his upcoming trial that was to be held with or without counsel as he was facing 26 sexually related offences. Accused had fired his Legal Aid counsel on eve of trial on two separate occasions and Legal Aid refused to appoint another lawyer. Accused also sought counsel be appointed for another matter in different court where trial date had not been set. Court had appointed amicus to ensure accused received fair trial. Application dismissed. It was obvious to court that accused was simply trying to delay matters by firing his counsel on eve of trial on two prior appearances. Accused would get fair trial through amicus that was appointed. Court also reasoned that it was premature to consider appointing counsel for court on other matter.
R. v. Richer (Feb. 26, 2013, Ont. S.C.J., Turnbull J., File No. 1773/11) 105 W.C.B. (2d) 217.
GOODS AND SERVICES TAX
Appellant did not have reasonable expectation of profit from commercial rental
Appellant wrote for local newspaper. Respondent denied appellant’s writing column was business. Appellant claimed losses of $33,165 in 2006 and $3,708 in 2007. Appellant rented tools and equipment. Appellant was disallowed maintenance and repair expenses with respect to rental property. Appellant appealed reassessment of goods and services tax (“GST”) by which Minister determined commercial portion of appellant’s property rental activity and tool rental activity were not commercial activities within meaning of s. 123(1) of Excise Tax Act (Can.). Appellant consolidated income and expenses from all appellant’s activities. Appeal was allowed in part. Appellant wrote for local newspaper as part of appellant’s political activities. Appellant did not make profit from columns appellant wrote for local newspaper. Appellant did not prove connection between legal fees claimed by appellant for lawsuit and columns written by appellant from specified date on. Appellant did not intend tool rental to be stand-alone business. Tool rental was incidental to operation of rental property. Incidental tool rental revenues should have been included in rental property revenues as part of rental property operation. No adjustment was made because it was not shown with certainty how much revenue was actually earned. Appellant’s commercial rental did not constitute commercial activity as defined under s. 123(1) of Act. Appellant did not have reasonable expectation of profit from commercial rental. Roof repair was to be allowed as current expense rather than on made on capital account.
Palangio v. Canada (Oct. 24, 2012, T.C.C., Paris J., File No. 2011-2064(IT)I; 2011-2065(GST)I) 223 A.C.W.S. (3d) 262.
Appellant failed to treat tax compliance obligations as priority
Appeal by taxpayer from late filing penalties. Appellant land development company filed 2003 tax return, due April 30, 2004, in November 2004 declaring no net income and no tax payable. Appellant filed amended return for 2003 in November 2008 declaring income of $292,232 and tax payable of $28,659. Appellant filed 2006 tax return, due April 30, 2007, in August 2009. Appellant assessed late filing penalties of $3,152 for 2003 and $216,479 for 2006. Appellant also assessed late GST filing penalties for various periods. Appellant’s sole shareholder testified 2003 return not filed in timely manner because loss anticipated and appellant had unused non-capital losses from previous years to offset any income. Witness erred in anticipating loss as result of failure to consider “soft expenses” not deductible from income. Witness testified 2006 return also not filed in timely manner because of anticipated loss, but could not explain how income underestimated by $5.8 million. Witness provided similar explanation for failure to file returns and remit GST in timely manner. Appeal dismissed. Issue whether appellant exercised requisite level of due diligence in relation to filing various returns within time required. In circumstances, proof of due diligence required proof of reasonable mistake of fact. Taxpayer could avoid late filing penalties if able to establish, on balance of probabilities, reasonable grounds to believe no tax owing. Witness’s evidence fell short of establishing reasonable grounds on both subjective and objective tests. Court satisfied appellant had simply failed to treat tax compliance obligations as priority.
830480 Alberta Inc. v. Canada (Dec. 3, 2012, T.C.C., Hogan J., File No. 2010-3252(IT)G; 2012-115(GST)I) 221 A.C.W.S. (3d) 757.
Interference caused by construction of new highway inflicted significant and permanent loss
In 2004, province completed new four-lane section of Highway 417 for public safety reasons. New highway routed traffic away from Highway 17. Claimant owned truck stop located on affected part of Highway 17 and took position that undertaking severely impeded road access to truck stop and substantially interfered with use and enjoyment of property. Claimant applied to Ontario Municipal Board for determination of compensation for injurious affection pursuant to Expropriations Act (Ont.). Board concluded claimant established business loss and loss in market value of affected property and awarded damages totalling $393,000 for injurious affection. Divisional Court affirmed board’s decision, finding that board reasonably concluded interference was substantial, correctly realized importance of balancing interests and conducted appropriate weighing of competing interests. Court of Appeal set aside board’s decision, finding that board failed to consider character of neighbourhood and any abnormal sensitivity of claimant and failed to recognize heightened importance of utility of defendant’s conduct where interference was product of essential public service. Claimant’s appeal allowed. Reasonableness of interference must be determined by assessing whether individual claimant has shouldered greater share of burden of construction than reasonable to expect without compensation. Interference caused by construction of new highway inflicted significant and permanent loss. Act provides right to compensation for injurious affection if damage results from action taken under statutory authority, action would give rise to liability but for that statutory authority and damage results from construction and not use of works. Only issue was whether claimant could have successfully sued for damages caused by construction under law of private nuisance if highway construction not done under statutory authority. Although focus in nuisance on whether interference suffered by claimant unreasonable, defendant’s conduct not irrelevant. Court of Appeal erred in finding that board’s application of law of nuisance to facts unreasonable. Board not required to specifically enumerate and refer by name to every factor. Board did not fail to take account of utility of province’s activity or fail to engage in required balancing. Board’s conclusion that claimant should not be expected to endure permanent interference that caused significant diminution of its market value in order to serve greater public good was reasonable.
Antrim Truck Centre Ltd. v. Ontario (Ministry of Transportation) (Mar. 7, 2013, S.C.C., McLachlin C.J.C., LeBel, Fish, Abella, Rothstein, Cromwell, Moldaver, Karakatsanis and Wagner JJ., File No. 34413) Decision at 332 D.L.R. (4th) 641, 202 A.C.W.S. (3d) 310 was reversed. 223 A.C.W.S. (3d) 970.
Plaintiff’s interest in conflict with proposed class
Plaintiff brought action on behalf of all land surveyors in Ontario who created plans of survey. Defendant managed electronic land registry system and made copies of plans of survey and sold them to public for fee. Plaintiff claimed nature of defendant’s business was infringement of copyright of proposed class in plans of survey. Plaintiff sought disgorgement of profits, compensatory damages and statutory damages. Plaintiff sought permanent injunction. Plaintiff’s motion for certification of proposed class action was dismissed. Plaintiff satisfied cause of action requirement except parts of claim for copyright infringement dealing with translation were struck out. Scanning plans to create digital format was not translation within meaning of s. 3(1)(a) of Copyright Act (Can.). Resulting digital plan of survey was not original work because there was no skill and judgment involved in scanning plans of survey. There was no evidence that any other surveyor wished to have copyright infringement complaint determined in class proceeding. Class had to be defined without elements that required determination of merits of claim. Common issues were rejected. Determination of consent was individual issue and had to be decided on individual basis. If defendant were successful in showing class members did not have copyright in plans or that all surveyors consented to defendant’s use of plans, then class would consist of no surveyors and answer to common issues 1 and 2 would bind no one. Common issue was rejected because asking what defendant did would not advance litigation. There was no evidence that common issue 4 could be decided on common basis. Issue of entitlement to damages was not common issue. Issue of interest depended on findings of liabilities and damages which were not amenable to being certified as common issues. Common issue could not be decided on class wide basis and was rejected. Class action was not preferable procedure. Plaintiff was not representative of proposed class because its interests were in conflict with proposed class and it did not provide workable litigation plan.
Keatley Surveying Ltd. v. Teranet Inc. (Dec. 14, 2012, Ont. S.C.J., C. Horkins J., File No. CV-10-414169-00CP) 224 A.C.W.S. (3d) 268.
Goods And Services Tax
Taxpayer’s lifestyle appeared to contradict claims of modest income Appeal by taxpayer from assessment by Minister under Income Tax Act (Can.), for 2000 to 2002 taxation years, and under Excise Tax Act (Can.), for 1998 to 2002 taxation years for unpaid GST. Taxpayer operated automobile brokerage, traded in shares of Internet business, and temporarily rented his home. Minister added income from business and rental income, and treating sale of shares as capital gain. Appeal allowed in part. Shares of Internet business may have been dealt with in manner contrary to securities commission rules. Gains from disposition of shares were capital in nature, and reassessment to make them part of ordinary income would be out of time. Payments made to internet business were not expenses but loans, and were not deductible. Loans did not have contingent obligation for repayment. Minister properly assessed revenue from automobile brokerage in 2000 and 2001 taxation years based on initial returns, and minister’s assumptions were not demolished. Home was used for car business purposes, and deduction was granted of 20 per cent of home expenses when premises were not leases. Deduction of 10 per cent suggested by minister was too low. No reliable evidence regarding use of home to meet business clients. Deposit analysis of 2002 taxation year showed deposits into bank of more than $500,000 and reported income from car business of $29,324. Certain expenses for automotive brokerage in 2002 were conceded by minister. All deposits were not likely from sale of cars, as some amounts were in American dollars and car sales were Canadian. Income from automobile brokerage reduced by $170,000. Taxpayer was not required to prove source of income to disprove minister’s assumptions. Taxpayer’s lifestyle appeared to contradict claims of modest income. Payment to law firm was not shown to be business related deduction of legal expenses. Rental income which was not reported in returns but not included in assessments could be reassessed, as taxpayer made misrepresentation regarding rental income. Deposit in amount of $10,000 could not be added to rental business as issue was not raised in pleadings. No adjustment made to GST collectible in 1998 and 1999, amount in other taxation years to be adjusted to reflect new findings regarding income tax owing. Minister did not show sufficient evidence to warrant penalties. Last v. Canada (Oct. 9, 2012, T.C.C., Woods J., File No. 2006-2525(IT)G; 2006-2902(GST)I) 220 A.C.W.S. (3d) 650.