Diana Aird

The applicant corporation sought to rectify a directors' resolution that declared capital dividends, after discovering its accountant had miscalculated the available balance in the capital dividend account, resulting in unintended tax consequences.

The court dismissed the application, finding that the resolution accurately recorded the parties' agreement to issue the specific dividend amounts recommended by the accountant.

Applying the Supreme Court's decision in Fairmont Hotels, the court held that rectification cannot be used to retroactively amend an agreement merely to avoid unanticipated tax liabilities, and noted the applicant had alternative remedies available.

The applicants invested in a Ponzi scheme through their companies.

They received payments that were reported as income and paid taxes on them.

After discovering the fraud, they applied for an order rectifying their corporate and tax records to show the payments as a return of capital, and for a declaration to that effect.

The court dismissed the claim for rectification because the documents accurately reflected the applicants' intentions at the time they were prepared.

However, the court granted a declaration that the moneys were a return of capital, without prejudice to how the payments should be treated for tax purposes by the tax authorities.