Canada Case Law

Canada c. Fiducie Historia

Court

Federal Court of Appeal

On the evidence the trustees continued to exercise their powers and the beneficiary sons did not act as de facto trustees in breach of art.1275 CCQ; the Tax Court’s factual findings were not tainted by a palpable and overriding error and its legal interpretation was correct. Therefore the impugned assessments were not justified and the Crown’s appeal is dismissed.

Source excerpt

• Deduction under income tax act s.104(6)
• Meaning of "became payable" (s.104(24))
• Trustee powers and delegation (ccq art.1275)
• Interpretation of trust instruments
• Standard of review for factual findings

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Beaulieu c. Canada

Court

Federal Court of Appeal

The Federal Court of Appeal upheld the Tax Court's factual finding that the appellant did not assume the mortgages and therefore received a taxable benefit under s.15(1); the 2017 resale does not eliminate the 2013 taxable benefit; the Tax Court committed no reviewable legal error and the late-filing penalty under s.162(1) was properly imposed, so the appeal is dismissed.

Source excerpt

• Income inclusion under s.15(1)
• Late-filing penalty (s.162(1))
• Consideration for transfer of property
• Standard of review on appeal
• Evidence and credibility assessment

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Fiducie Historia v. The King

Court

Tax Court of Canada

The Tax Court allowed Fiducie Historia’s appeal, holding the trust allocations to a beneficiary were validly payable and deductible under s. 104(6) of the Income Tax Act.

• Deduction under s.104(6) ita
• Meaning of 'became payable' (s.104(24))
• Nullity under civil code of québec art.1275
• De facto trustee doctrine
• Delegation of trustee powers (art.1337 ccq)
• Standing to invoke nullity

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Fédération des caisses Desjardins du Québec v. Canada (National Revenue)

Court

Federal Court of Appeal

The Federal Court of Appeal held that the Tax Court applied the wrong legal approach by giving undue weight to bargaining power, exclusivity and monitoring reports rather than conducting the required comprehensive, global assessment of legal subordination under the Act and the Civil Code of Québec; accordingly the Tax Court judgment was set aside and the matter was remitted for reconsideration by another judge.

Source excerpt

• Insurable employment
• Employment relationship (employee vs independent contractor)
• Legal subordination
• Contract of service vs contract for services
• Evidentiary assessment

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ABB Inc. v. Canadian National Railway Company

Court

Federal Court

The Federal Court held CN and CSXT liable for damage to ABB’s transformer, finding the 2011 agreement’s negligence exception governing and applying Quebec law on successive carriage.

• Limitation of liability
• Successive carriers liability
• Choice of law
• Negligence
• Tariffs and regulatory framework
• Contractual extension to connecting carriers

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Churchill Falls (Labrador) Corp. v. Hydro‑Québec

Court

Supreme Court of Canada

The Supreme Court of Canada dismissed Churchill Falls’s appeal, holding Hydro‑Québec had no duty to renegotiate the power contract or share windfall profits.

• Good faith
• Doctrine of unforeseeability (imprévision)
• Duty to renegotiate
• Relational contracts
• Implied terms
• Prescription

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Laplante v. Canada

Court

Federal Court of Appeal

The Tax Court judge correctly applied governing principles, found on the evidence that the distributions were simulated and that the appellant was the true beneficiary by mandate, and the Federal Court of Appeal found no palpable and overriding error in those factual findings or in the application of law; consequently the reassessment for 2008 was upheld.

Source excerpt

• Reassessment
• Simulation (fictitious act)
• Mandate/prête-nom
• Standard of review
• Evidentiary weight and findings

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Raposo v. The Queen

Court

Tax Court of Canada

The Raposo clan was not a partnership under Quebec law because the contract creating the alleged partnership had an unlawful object (drug trafficking) and was therefore null under arts.1413, 1417 and 1422 C.C.Q.; accordingly s.272.1(5) ETA, which applies only if a partnership exists under provincial law, could not be used to impose joint and several liability on the appellant, and the assessment was set aside.

Source excerpt

• Joint and several liability
• Definition of partnership
• Public order and contract nullity
• Gst on illegal sales

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Fonds de solidarité des travailleurs du Québec (F.T.Q) v. The Queen

Court

Tax Court of Canada

Transfers were not gifts because appellant received equivalent consideration — the extinguishment of its obligation to negotiate and obtain participating priority shares — negating the material and mental elements of a gift; alternatively, appellant failed to prove on balance of probabilities that payments were made for the purpose of earning business income, so expenses were not deductible under s.18(1)(a) ITA.

Source excerpt

• Charitable gifts
• Deductibility
• Business expense
• Donative intent
• Interpretation of statutory and civil law

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Diktakis v. The Queen

Court

Tax Court of Canada

The appellant failed to prove that the first occupants of the new dwelling were her relations as required by s.254(2)(g) ETA; Érika Lachance was not a relation because she was neither married nor in a conjugal relationship with the appellant's father, and although NR could be a half‑sister, occupancy by NR and her mother was not established by the evidence (Hydro‑Québec invoices in another name, absence of corroborating witnesses, and the notarial deed indicating the appellant would occupy), therefore the GST rebate claim fails.

Source excerpt

• Gst rebate for new housing
• Related persons
• Occupation requirement
• Interpretation of 'relation'
• Evidentiary burden

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