Diana Nicole Aird

The appellants restructured family trusts, incorporating "Child Corporations" and subscribing for shares without actual payment, leading to a significant tax reassessment by the Canada Revenue Agency (CRA) for taxable benefits.

They sought a declaration from the Superior Court that the shares were invalidly issued under the Ontario Business Corporations Act (OBCA) and an order for rectification of share registers, aiming to negate the tax assessment.

The Superior Court declined jurisdiction, deferring to the Tax Court of Canada, and also indicated it would not have granted the requested relief.

The Court of Appeal upheld the Superior Court's discretionary decision to decline jurisdiction, finding no reviewable error.

The Court emphasized that the primary dispute was between the appellants and the CRA, falling within the Tax Court's specialized expertise, and that the corporate parties did not require a binding order from the Superior Court to resolve internal corporate issues.

The Attorney General of Canada appealed a rectification order granted by the Superior Court of Justice that allowed Slate Management Corporation to restructure a single-step amalgamation of three subsidiaries into a two-step amalgamation to obtain a tax bump under the Income Tax Act.

The Court of Appeal found the appeal moot based on the principle established in Norcan Oils Ltd. v. Fogler, as the plan of arrangement had been implemented and third parties had relied on the financial consequences of the rectification order.

The court declined to exercise its discretion to hear the moot appeal and quashed it, awarding costs to Slate.

This application sought a rectification order for a corporate amalgamation intended to achieve specific tax outcomes under the Income Tax Act's "tax bump rules." Due to an error, the amalgamation was performed in a single step instead of the required two steps, defeating the intended tax benefit.

The court applied the test for rectification, requiring proof of a continuing specific intention to undertake the transaction on a particular tax basis.

The court found, on a balance of probabilities, that the applicant had a continuing specific intention to utilize the tax bump rules, supported by various documents and witness testimony.

The application for rectification was granted, and costs were awarded to the applicant.