Adam Howard Hirsh

Following a successful appeal in a complex tax case, the appellant sought costs of the trial and appeal totaling over $1.3 million.

The respondent agreed costs should follow the event but argued the amounts were excessive.

The Court of Appeal declined to apply a 25% bump-up for a non-Rule 49 settlement offer, noting the respondent's obligation to protect the public purse in a test case.

The Court awarded the appellant costs of the appeal and trial fixed at $925,000 inclusive of disbursements and HST.

The appellant challenged reassessments imposing Ontario corporate income tax and corporate minimum tax on interest received under specialty debt instruments created through an inter-corporate refinancing designed to reduce provincial tax.

The court held the interest was income from property, not income from business, because the appellant's activity was minimal and the debt instruments were not employed or risked in any separate business.

Applying GAAR principles, the court found that even if the transactions generated a tax benefit or constituted avoidance transactions, they were not abusive because the statutory scheme deliberately distinguished between business income and property income for foreign-incorporated corporations with an Ontario permanent establishment.

The court also held the specialty debt instruments were not property situated in Canada because, under the settled common law situs rule, specialty debts are located where the instruments are physically found, here the British Virgin Islands.

The appeal was allowed and the reassessments were to be vacated.

Following an appeal involving a dispute between a corporate appellant and the provincial Minister of Revenue, the court addressed the issue of costs.

The parties agreed on a fixed amount for legal fees and disbursements payable to the respondent.

The court endorsed the agreement and ordered that the respondent recover the agreed costs.

The decision reflects the court’s approval of negotiated costs following the disposition of the appeal.

The appellant corporation appealed Ontario corporate tax assessments arising from interest income earned through refinancing transactions within a corporate group.

The appellant argued the interest constituted income from property and therefore fell outside the scope of Ontario taxation under the pre‑2005 Corporations Tax Act regime applicable to non‑Canadian incorporated corporations.

The court held that the interest income formed part of a business carried on in Canada because the corporation’s core purpose was to facilitate financing transactions within the corporate group and administer the resulting debt instruments in Canada.

As a result, the interest income constituted income from a business carried on in Canada within the meaning of s. 115 of the Income Tax Act and was taxable in Ontario.

The court upheld the Minister’s assessments and found it unnecessary to conduct a full GAAR analysis.

In ongoing proceedings under the Companies’ Creditors Arrangement Act, the applicants sought approval of an Employee Hardship Application Process and an extension of the stay of proceedings.

The requested hardship process was unopposed and approved.

Certain noteholders sought conditions requiring enhanced reporting and procedural safeguards in relation to the claims process and employee claims.

The court held that the statutory test under s. 11(6) of the CCAA was satisfied because the circumstances warranted the extension and the applicants had acted in good faith and with due diligence.

The stay extension was granted, while proposed procedural changes to the claims process were found more appropriately addressed through a motion to vary existing orders.

The appellant franchisee operated a gas station under a one-year franchise agreement with the respondent franchisor.

The franchisee sought to rescind the agreement and claim a refund under the Arthur Wishart Act because the franchisor had not provided a disclosure document.

The franchisor successfully moved for summary judgment on the basis that it was exempt under s. 5(7)(g)(ii) of the Act, which applies to agreements valid for no longer than one year that do not involve a non-refundable franchise fee.

The Court of Appeal upheld the motion judge's finding that the agreement's one-year term and requirement to pay royalties, rather than a franchise fee, satisfied the exemption criteria.

The TD defendants sought leave to appeal a motion judge's order dismissing their motion to strike the plaintiff's claims.

The plaintiff alleged that the TD defendants transferred her share of lottery winnings out of the jurisdiction at her ex-boyfriend's request, despite knowing of her interest and a court preservation order.

The Divisional Court granted leave to appeal solely on the issue of whether the plaintiff's claim for a declaration of contempt of court should be struck, finding reason to doubt the correctness of allowing such a claim in a civil action.

Leave to appeal was denied for the negligence, breach of trust, breach of fiduciary duty, and preservation order validity issues.

The moving parties sought leave to appeal an order approving a settlement in the CCAA proceedings of Nortel Networks.

The Court of Appeal denied leave, finding no procedural or substantive unfairness in the settlement.

The motion judge had carefully balanced the various interests at stake and made no demonstrable error.

The appellants, representing unionized and non-unionized former employees of Nortel, appealed a decision dismissing their motions for directions to compel Nortel to pay severance, termination, and retirement benefits during its CCAA restructuring.

The appellants argued that the payments were protected under s. 11.3(a) of the CCAA as compensation for ongoing services, and that the CCAA stay could not override provincial Employment Standards Act obligations.

The Court of Appeal dismissed the appeals, holding that the payments were for past services and that the doctrine of federal paramountcy allowed the CCAA stay to suspend the immediate payment obligations under the provincial legislation to facilitate the restructuring.