Lori Elizabeth Joy Patyk

This appeal concerned whether taxes collected by Enterprise Rent-A-Car on insurance products were Retail Sales Tax (RST) or Harmonized Sales Tax (HST) for assessment purposes.

Enterprise had collected and remitted these taxes as HST to the Canada Revenue Agency (CRA).

The Minister of Finance assessed Enterprise for RST, arguing Enterprise had erroneously remitted RST as HST.

The Court of Appeal found the motion judge erred by focusing on Enterprise's belief about the tax collected, rather than the factual question of what tax was actually collected.

The Court concluded that Enterprise had, in fact, collected HST, based on its invoicing practices and remittances.

As the Minister's assessments were based on "tax collected" under the Retail Sales Tax Act, and Enterprise had collected HST, the assessments had no legal basis.

The appeal was allowed, and the Minister's assessments were set aside.

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.

Capcorp Planning (2003) Inc. appealed an assessment of Ontario Sales Tax and a penalty levied by the Minister of Revenue for non-remittance of tax on premiums paid for its extended health care plans.

The central issue was whether these plans, identified as "unfunded benefits plans" under the Retail Sales Tax Act, were exempt from tax because the risks covered could not "otherwise be obtained by taking out a contract of insurance." The court found that the plans were indeed unfunded benefits plans and, based on uncontradicted evidence that purchasers could not obtain alternative health insurance due to pre-existing conditions or other impediments, concluded that the amounts paid were not taxable.

Consequently, the assessment was quashed.

The court also rejected the respondent's arguments regarding the penalty rationale and the due diligence defence.

The successful appellants sought costs following summary judgment motions in land transfer tax appeals.

They requested over $260,000 and argued that costs should also include work performed for additional related appeals and disputes that had been held in abeyance, as well as elevated costs based on a purported Rule 49 settlement offer.

The court declined to award costs for the additional appeals and related disputes because they were not before the court and there was no evidentiary basis to assess the work performed.

The court also held that the settlement proposal was not a valid Rule 49 offer because it addressed matters beyond the proceedings before the court and therefore did not justify elevated costs.

The parties were directed to attempt to agree on the remaining costs or provide further submissions limited to the four appeals heard.