Dowad v. Dowad

Dowad v. Dowad

The court held that the parties reached a clear consensus ad idem on the transaction and its execution; the failure to consider Part IV tax consequences was an oversight, not a fundamental mistake affecting the subject matter. Rectification and rescission are unavailable for mere tax consequences, and equitable intervention was not warranted given experienced advisors, no inequality or unconscionability and minimal net prejudice to the plaintiff; therefore the application fails.

Citation
2009 BCSC 600
Parties
Plaintiff (applicant): Patricia Dowad; Plaintiff (applicant): Patco Investments Ltd.; Defendant (respondent): Wilfred Dowad; Defendant (respondent): W. Dowad Ltd.
Court
Supreme Court of British Columbia
Jurisdiction
Canada
Judgment Date
6 May 2009
Procedural Posture
Family Law Divorce and Property Division With Contractual Dispute / Application for Summary Trial (rule 18 A); Reasons for Judgment
Outcome
Application dismissed with costs to the defendants.
Legal Topics
Property Division, Minutes of Settlement, Consent Order, Mistake (contract), Rectification, Part IV Income Tax Act, Refundable Dividend Tax on Hand (rdtoh), Summary Trial (rule 18 A)
Source Language
English
Family Law Contract Law Equity Tax Law Civil Procedure Property Division Minutes of Settlement Consent Order +5 more

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Parties

Patricia Dowad

Plaintiff (applicant)

Patco Investments Ltd.

Plaintiff (applicant)

Wilfred Dowad

Defendant (respondent)

W. Dowad Ltd.

Defendant (respondent)

Procedural Posture

Family Law Divorce and Property Division With Contractual Dispute / Application for Summary Trial (rule 18 A); Reasons for Judgment

Legal Issues

  1. 1 Whether the corporate share redemption and resultant RDTOH refund created an uncompensated windfall to the defendants
  2. 2 Whether the tax consequences constituted a mutual mistake or mistake at law sufficient to void or rectify the Minutes of Settlement/Consent Order
  3. 3 Whether equitable relief (rectification or rescission) is available for inadvertent tax consequences

Ratio Decidendi

The court held that the parties reached a clear consensus ad idem on the transaction and its execution; the failure to consider Part IV tax consequences was an oversight, not a fundamental mistake affecting the subject matter. Rectification and rescission are unavailable for mere tax consequences, and equitable intervention was not warranted given experienced advisors, no inequality or unconscionability and minimal net prejudice to the plaintiff; therefore the application fails.

Court Disposition

Application dismissed with costs to the defendants.

Orders

  • Application dismissed
  • Costs awarded to the defendants