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.