Jason Elliot Jerome DeFreitas

The Minister of Finance reassessed BFL Canada Risk and Insurance Services Inc. for a late retail sales tax return, imposing an administrative penalty.

BFL sought an extension and penalty waiver based on extenuating circumstances, which the Minister rejected.

BFL appealed to the Superior Court of Justice, challenging the Minister's refusal to apply its Extenuating Circumstances Policy.

The Minister argued the Superior Court lacked jurisdiction, asserting the matter should proceed by judicial review in Divisional Court.

The motion addressed the question of law regarding the Superior Court's jurisdiction under s. 25(1) of the Retail Sales Tax Act to vacate or vary a tax assessment based on the Minister's discretionary decisions.

The court found that the Superior Court has jurisdiction, as the RSTA's appeal mechanism is broad and not limited to the validity and correctness of an assessment, nor does it immunize discretionary decisions.

The appellants, placement agencies, appealed tax assessments by the Minister of Revenue under the Employer Health Tax Act, arguing they were not the employers of temporary workers supplied to the federal government.

The court considered the tripartite relationship between the agency, the worker, and the client, and the definition of "employer" under the EHTA.

The court found that the appellants were the only entities with contractual obligations to pay the workers, and therefore were the employers for the purposes of the Act.

The appeals were dismissed.

Capcorp Planning (2003) Inc. sold a health and welfare plan (HWP) that provided coverage for health, dental, vision, and hearing care, as well as protection against income loss due to illness or accident.

The plan was particularly attractive to owner-managers of small businesses who could not obtain equivalent coverage through traditional insurance due to pre-existing medical conditions.

The Minister of Revenue assessed Capcorp for failure to collect and remit retail sales tax (RST) on amounts paid by employers under the HWP, imposing a penalty of $278,625.31 including interest.

The Superior Court of Justice quashed the assessment, finding that the HWP was not subject to RST because participants could not obtain equivalent insurance coverage.

The Court of Appeal reversed, holding that the HWP constitutes an "unfunded benefits plan" under the Retail Sales Tax Act and is therefore subject to RST.

The court found that the statutory definition focuses on whether protection against risk "could otherwise be obtained" through insurance generally, not whether specific individuals could obtain such coverage.

The Minister of Revenue appealed an order dismissing its motion to dismiss the respondent's tax appeal and granting a production order.

The Court of Appeal quashed the appeal, finding that the motion judge's order was interlocutory because it did not finally determine the scope of the appeal under the Retail Sales Tax Act.

As the order was interlocutory, jurisdiction to hear the appeal lay with the Divisional Court, not the Court of Appeal.

The appellant purchased properties and executed vendor take back mortgages and a development agreement, paying land transfer tax on the total amount including the development milestones.

The development milestones were never met, the agreement was terminated, and the mortgages were discharged.

The appellant sought a refund of the land transfer tax paid on the development amounts.

The court dismissed the appeal, finding that the obligations under the development agreement formed an integral part of the consideration given on closing, and the contingent nature of the liability did not exclude it from the value of consideration under the Land Transfer Tax Act.

On a motion in a retail sales tax appeal, the moving party sought to restrict the responding party to arguing only the issue expressly raised in its Notice of Objection, namely whether premiums paid under a health and welfare plan attracted retail sales tax.

The responding party argued the court could permit amendments and should allow a fuller factual record, including matters such as due diligence and penalty, to properly frame the appeal.

The court held that fairness required a complete factual record so that any necessary determinations could be made in the interests of justice.

The motion to restrict the grounds of appeal was dismissed, with costs reserved to the hearing judge.

A corporation incorporated in the British Virgin Islands appealed Ontario tax reassessments requiring it to include interest received from a related Canadian company as taxable corporate income under the Corporations Tax Act.

The interest arose from specialty debt instruments issued as part of a corporate tax planning structure intended to replace retained earnings with intercompany borrowings.

The court considered whether the interest constituted income from a business carried on in Canada, whether the Ontario General Anti-Avoidance Rule applied, and whether the income triggered corporate minimum tax.

Relying on the Court of Appeal’s decision in Inter-Leasing, the court held the interest was income from property rather than business income and therefore not taxable under the applicable provisions.

The GAAR did not apply and the corporate minimum tax regime was also inapplicable.