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Case Law is a sample selection from the weekly summaries of notable unreported civil and criminal court decisions published in Law Times newspaper.

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Income tax


Motion was collateral attack on jeopardy order proceedings

Taxpayer wrote on income tax returns, “collecting income tax by government is against Constitution of Canada.” Taxpayer was charged with income tax evasion. Taxpayer’s objections to 1993 to 1996 income tax assessments were being held pending disposition of tax evasion charges. Between June 1999 and May 2003, CRA collected $871,291.90 from taxpayer pursuant to 1999 jeopardy order. In 2010 and 2011, taxpayer was twice convicted of tax evasion and ordered to pay fines of $522,346.73 and $101,393.80. Taxpayer’s case before Tax Court was reactivated. Taxpayer wished funds collected pursuant to jeopardy order to be applied to liability which would survive potential bankruptcy. Federal Court dismissed taxpayer’s motion for order directing that money collected pursuant to jeopardy order be first applied to fines arising from criminal convictions. Court considered that, when jeopardy order was issued and money was collected pursuant to order, only debt owing was tax debt, not criminal fine and that taxpayer was not permitted to choose how to allocate involuntary payment. Taxpayer appealed. Appeal dismissed. Judge did not err in dismissing taxpayer’s motion. Taxpayer was not challenging validity of search warrant so there was no basis to conclude taxpayer’s Charter rights were violated. Taxpayer failed to show that judge’s factual finding that CRA had every reason to believe taxpayer would not voluntarily pay his taxes was wrong or that jeopardy order would not have issued but for evidence obtained by way of search warrant. There was no impropriety in fact that some evidence obtained through search warrant was put before court in motion to obtain jeopardy order. Nor was CRA’s use of jeopardy order to enforce payment of tax debt analogous to use of criminal powers to enforce civil debt. Only way to vary or vacate jeopardy order was by application for review by judge of court which issued order and no appeal lies from such review. Jeopardy order was already reviewed and upheld so motion was collateral attack on jeopardy order proceedings. Finally, taxpayer failed to demonstrate that process followed to date, or to be followed, was not in accordance with principles of fundamental justice.
R. v. Klundert (Jun. 16, 2014, F.C.A., Eleanor R. Dawson J.A., Johanne Trudel J.A., and D.G. Near J.A., File No. A-83-13) Decision at 107 W.C.B. (2d) 155 was affirmed.  116 W.C.B. (2d) 179.



Only by assuming guilt by association could director conclude applicant committed offence

Director denied applicant passport services for five years because he knowingly organized, induced, aided or abetted wife to travel using counterfeit New Zealand passport. Applicant applied for judicial review. Application was granted. Attorney General appealed. Appeal dismissed. Federal Court erred in finding that director acted in procedurally unfair manner by failing to put alleged offence to applicant for response because it was put to him. However, facts relied on by director could not lead to conclusion that applicant committed offence under s. 117 of Immigration and Refugee Protection Act (Can.). None of facts positively supported finding that applicant used his passport to knowingly aid, organize, induce or abet wife to come to Canada with counterfeit passport. Only by unreasonably assuming guilt by association could director conclude from facts alone that applicant committed s. 117 offence. Director disbelieved what applicant told him but disbelief, without more, did not support finding that applicant committed offence.
Dias v. Canada (Attorney General) (Sep. 10, 2014, F.C.A., Pelletier J.A., David Stratas J.A., and Webb J.A., File No. A-102-14) Decision at 236 A.C.W.S. (3d) 989 was affirmed.  245 A.C.W.S. (3d) 183.

Civil Procedure

Judge erred in finding that undisclosed documents were subject to litigation brief privilege
During protracted discovery process, plaintiffs came into possession of documents that defendant Canada alleged were privileged. Canada sought order for return of all privileged documents while plaintiffs sought order requiring Canada to produce other documents over which Canada claimed privilege and had not produced. Plaintiffs’ motion was dismissed and Canada’s motion was allowed in part. Prothonotary found that Canada failed to establish litigation brief or settlement privilege but found that documents were subject to solicitor-client privilege and were to be returned to Canada. Prothonotary found there was no waiver of privilege. Plaintiffs appealed prothonotary’s decision. Appeal was dismissed. Judge upheld Canada’s claim that certain documents were protected from disclosure on basis that they were subject to litigation brief privilege and upheld Canada’s claim to solicitor-client privilege over documents Canada itself disclosed to plaintiffs. Plaintiffs appealed. Appeal allowed. Judge erred in finding that Canada established that undisclosed documents were subject to litigation brief privilege. Contents of documents did not establish that it was more likely than not that each document was prepared for dominant purpose of seeking legal advice or aiding in conduct of litigation. Claim to litigation privilege was disallowed. Evidence did not support judge’s finding that all of allegedly privileged documents were inadvertently disclosed in context where there was no intention to waive privilege. Evidence fell short of establishing that disclosure was inadvertent. There was no direct evidence that Canada did not intend to waive claim to privilege. Canada’s claim to solicitor-client privilege had been waived in respect of all documents at issue that were disclosed to plaintiffs.
Chemawawin First Nation v. R. (Sep. 12, 2014, F.C.A., J.D. Denis Pelletier J.A., Eleanor R. Dawson J.A., and David Stratas J.A., File No. A-350-12, A-351-12, A-358-12) Decision at 220 A.C.W.S. (3d) 505 was reversed.  244 A.C.W.S. (3d) 809.



Higher courts would benefit from practical expertise of provincial superior courts

Applicant fathers brought application alleging that Federal Child Support Guidelines (Can.), contradicted provisions of Divorce Act (Can.), under which they were enacted. Fathers sought to have Federal Court declare that Guidelines were ultra vires DA. Attorney General applied to have application dismissed. Federal Court Judge dismissed application. Judge found that four fathers lacked standing and did not meet test for public interest standing. Judge found that one father’s application was impermissible collateral attack and abuse of process. Judge found that one father had standing but court should decline to exercise jurisdiction to hear application because issues would be more appropriately dealt with in provincial superior court. Father appealed. Appeal dismissed. Judge did not err in law in concluding that provincial superior courts had jurisdiction to determine vires of Guidelines in context of proceedings for which they had jurisdiction under Act and to decline to apply them if found to be ultra vires. Judge erred in principle in applying and describing third factor to be considered in determining public interest standing. Appeal should be determined on issue of whether or not judge erred in declining to exercise jurisdiction and it was assumed fathers could have some standing. Judge’s discretion not to hear matter should be respected. Vires of Guidelines should be determined by court that developed particular expertise to properly assess argument in factual context. It would be more appropriate to adjudicate issues in context of divorce proceedings because it would ensure full participation of spouse seeking support. Higher courts would benefit from practical expertise provincial superior courts had. While declaration of invalidity could not be granted by provincial superior court, fathers could obtain ultimate goal of reduction of child support.
Strickland v. Canada (Attorney General) (Feb. 5, 2014, F.C.A., Blais C.J., Sharlow J.A., and Johanne Gauthier J.A., File No. A-199-13) Decision at 228 A.C.W.S. (3d) 705 was affirmed.  244 A.C.W.S. (3d) 341.

Human Rights Legislation


Once finding of undue hardship made, complaint should be dismissed

Complainant was employee of Canadian International Development Agency (CIDA) and she applied for postings in Afghanistan. Complainant had type 1 diabetes and was dependent on insulin. Complainant had two temporary assignments in Afghanistan but during second posting she had hypoglycemic incident that resulted in posting being curtailed against her wishes and her returning to Canada. Following incident, persons who were being posted to Afghanistan on temporary assignments were required to be assessed medically before being assigned to work there. Health Canada developed Afghanistan guidelines.

Complainant continued to apply for other postings in Afghanistan but she was not offered any other assignment. Complainant filed complaints of discrimination against CIDA and Health Canada. Tribunal found that applicant established prima facie case of discrimination against CIDA and Health Canada on basis of disability. Tribunal found that CIDA had not met procedural duty to accommodate complainant and had not provided bona fide justification for discriminatory practices. Tribunal found it would have caused CIDA undue hardship to accommodate complainant in Afghanistan. Tribunal awarded other monetary and systemic remedies. On application for judicial review, Federal Court Judge found that once finding of undue hardship had been made, complaint should have been dismissed as conduct would not then be discriminatory practice for purposes of Canadian Human Rights Act. Tribunal’s decision was set aside. Human Rights Commission appealed. Appeal dismissed. Based on provisions of Act, only reasonable or correct interpretation of applicable provisions was that once tribunal found that it would have imposed undue hardship on CIDA to accommodate needs of complainant in posting her to Afghanistan, complaint should have been dismissed. There was not separate procedural duty to accommodate under Act that could give rise to remedies if employer established it had satisfied all parts of test for determining whether prima facie discriminatory standard was bona fide occupational requirement. If employer established that prima facie discriminatory standard was bona fide occupational requirement then complaint should be dismissed.

Cruden and Canadian International Development Agency, Re (May. 20, 2014, F.C.A., J.D. Denis Pelletier J.A., Eleanor R. Dawson J.A., and Wyman W. Webb J.A., File No. A-214-13) Decision at 228 A.C.W.S. (3d) 1092 was affirmed.  244 A.C.W.S. (3d) 172.

Industrial and Intellectual Property


Incorporation of musical work into audiovisual work was reproduction that attracted royalties

Copyright board exercised its mandate under s. 70.2 of Copyright Act (Can.), to settle terms of licences granted to two broadcasters by collective society that administered reproduction rights. Terms of licence reflected board’s view that royalties were payable with respect to ephemeral copies of works made by broadcasters in normal course of their production or broadcasting activities. Ephemeral copies were copies or reproductions that existed only to facilitate technological operation by which audiovisual work was created or broadcast. Broadcasters applied for judicial review. Application granted in part. If technological advances required making of more copies of musical work in order to get audiovisual work that incorporated it to market, those additional copies added value to enterprise and attracted additional royalties. Broadcasters’ argument that copy-dependent technology did not add value to enterprise and as result, there was no additional value to share with artists, was essentially economic argument. Board heard extensive evidence on argument and its conclusion had evidentiary foundation. There was no basis to interfere with board’s conclusion on economic justification. Broadcasters conceded that incorporation of musical work into audiovisual work was reproduction that attracted royalties. Board’s reasoning was grounded in Bishop v. Stevens (1990), 72 D.L.R. (4th) 97, 22 A.C.W.S. (3d) 568 (S.C.C.), where Supreme Court of Canada held that ephemeral recordings of performance of work made solely for purpose of facilitating broadcasting of that performance were, if unauthorized, infringement of copyright holders rights. Bishop v. Stevens continued to remain good law. Entertainment Software Assn. v. Society of Composers, Authors and Music Publishers of Canada (2012), 347 D.L.R. (4th) 193, 216 A.C.W.S. (3d) 218 (S.C.C.) (ESA), restated principle of technological neutrality in copyright law, but provided no guidance as to how court should apply principle when faced with copyright problem in which technological change was material fact. Nothing in ESA authorized board to create category of reproductions or copies which, by their association with broadcasting, would cease to be protected by Act. ESA did not overrule Bishop v. Stevens. Comments in ESA about technological neutrality had not changed law to point where board erred in finding that incidental copies were protected by copyright. However, formula imposed by board was flawed and discounted formula was amended.
Canadian Broadcasting Corp. v. SODRAC 2003 Inc. (Mar. 31, 2014, F.C.A., Marc Noel J.A., J.D. Denis Pelletier J.A., and Johanne Trudel J.A., File No. A-516-12, A-527-12, A-63-13) 241 A.C.W.S. (3d) 434.



Grant of citizenship by descent limited to first generation born abroad to Canadian citizens

Applicants’ paternal grandmother was Canadian citizen, but ceased to be Canadian citizen when she became naturalized citizen of United States. Applicants’ father was born in United States and at time of his birth neither of his parents were Canadian citizens. Applicants were born in United States and at time of their birth neither of their parents were Canadian citizens. Citizenship Act (Can.), was amended to extend citizenship to individuals who lost or were denied citizenship. Grandmother’s Canadian citizenship was restored retroactively to date she lost citizenship and father was deemed to be Canadian citizen from time he was born. Applicants applied for Canadian citizenship. Delegate refused to issue citizenship certificates to applicants because they did not meet statutory requirements for citizenship in s. 3(1)(b) of Act. Delegate found that s. 3(3) of Act limited citizenship by descent to first generation of progeny born abroad to Canadian citizens. Applicants’ application for or judicial review of delegate’s decision was dismissed. Judge found that s. 3(3)(a) of Act was intended to cut-off citizenship by descent after first generation born abroad. Applicants also claimed that s. 3(3)(a) of Act violated s. 15 of Canadian Charter of Rights and Freedoms. Judge found that applicants did not have standing under Charter to challenge unconstitutionality of s. 3(3)(a). Applicants appealed. Appeal dismissed. Standard of review was correctness. Required textual, contextual and purposive analysis was conducted and delegate’s interpretation of Act was correct. Section 3(3)(a) of Act operated to limit grant of citizenship by descent to first generation born outside of Canada to Canadian parent and that limitation applied to applicants.
Kinsel v. Canada (Minister of Citizenship and Immigration) (May. 14, 2014, F.C.A., Eleanor R. Dawson J.A., Johanne Trudel J.A., and D.G. Near J.A., File No. A-35-13) Decision at 224 A.C.W.S. (3d) 264 was affirmed.  240 A.C.W.S. (3d) 295.
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