Dominic C. Belley

The appellant, a flight simulator manufacturer, brought a motion for an interim confidentiality order and sealing order to protect commercially sensitive documents prior to their disclosure during discovery.

The respondent opposed the motion, arguing it was premature and that the implied undertaking rule provided sufficient protection.

The Tax Court of Canada found that the implied undertaking rule was inadequate to protect the highly competitive strategic information and granted a sealing order for the specific documents, while adjourning the request for a permanent confidentiality order to the trial judge.

The appellant, Future Electronics Inc., brought a motion for a permanent confidentiality order to redact the names of its suppliers and clients, as well as information regarding its business model, from the trial transcripts.

The Tax Court of Canada applied the Sherman test for discretionary limits on court openness.

The Court found that the disclosure of this information posed a serious risk to important public interests, including the preservation of confidential information, commercial certainty, and fair competition.

Concluding that redaction was necessary and that the benefits of the order outweighed its negative effects, the Court granted the motion and ordered the transcripts redacted.

The Appellant brought a motion to strike portions of the Respondent's Further Amended Reply in a GAAR appeal.

The Tax Court of Canada found the pleadings deficient for failing to clearly articulate the basis for the alleged abuse, but concluded the defect was curable.

The motion was allowed in part, striking the impugned paragraphs with leave to amend.

The respondent Minister brought a motion to compel the appellant to disclose a tax-planning memorandum prepared by an accounting firm in connection with a hybrid sale of a business.

The appellant objected on the basis that the document was not relevant and contained subjective opinions.

The Tax Court of Canada granted the motion, finding that the memorandum was relevant to the application of subsection 84(2) of the Income Tax Act, as it could shed light on the circumstances surrounding the transactions and the potential involvement of a third-party facilitator.

The appellants donated stock options to registered charities and claimed corresponding tax credits in their returns.

The tax authority reassessed the taxpayer to include the fair market value of the gifted stock options in his taxable income pursuant to ss. 50 and 422(c)(ii) of the Taxation Act.

The Court of Québec vacated the reassessments but the Quebec Court of Appeal restored them.

The Supreme Court of Canada unanimously affirmed the Court of Appeal, holding that s. 422(c)(ii) applies to the disposition of stock options by gift and that Division VI of the Taxation Act does not constitute a complete code that excludes the application of s. 422.

The appellants appealed reassessments under the Income Tax Act for the 2012 taxation year.

The issue was whether amounts received from the sale of shares to an unrelated party following a corporate reorganization were deemed to be dividends under subsection 84(2).

The Tax Court of Canada found that the transactions constituted a distribution or appropriation of corporate funds on the reorganization of the business.

The appeals were dismissed with costs.

The appellant corporation appealed a reassessment made beyond the normal reassessment period, which added $920,700 in unreported dividends to its income.

The appellant argued that the omission was due to a software error and the inattention of its external accountant, and that it had exercised due diligence.

The Tax Court of Canada dismissed the appeal, finding that the external accountant was negligent in failing to verify the tax return and that this negligence was attributable to the appellant.

Furthermore, the appellant's officers failed to exercise due diligence by not reviewing the tax return before it was filed.

The appellant sought rectification of transactional documents under article 1425 C.C.Q. after an implemented cross-border financing structure created unforeseen foreign accrual property income and significant federal tax liability.

The majority held that a general intention of tax neutrality, without sufficiently determinate or determinable obligations and prestations, cannot ground retroactive modification of written instruments.

The Court distinguished correction of transcription errors from retroactive alteration of agreed transactions that merely produced unintended consequences.

It concluded the parties made no expression error, but instead chose transactions that generated adverse tax results.

The appeal was dismissed with costs, with two judges dissenting in favour of broader rectification aligned with prior Quebec jurisprudence.

These consolidated tax-planning appeals concerned errors in transactional documents that failed to reflect the parties’ common contractual intentions under Quebec civil law.

The Court held that, where parties mutually recognize drafting or implementation errors and amend their acts to align with their true agreement, courts may interpret and recognize those amendments under art. 1425 C.C.Q. The Court emphasized the distinction between exchange of consents and written expression, and rejected any acquired right of tax authorities to benefit from contractual errors once corrected by mutual consent, subject to third-party rights.

It also clarified that civil courts in such proceedings do not adjudicate the validity of tax assessments, which remain for competent tax forums.

The appeals were dismissed with costs throughout.