Martin Gentile

The Appellant brought a motion for an order requiring the Respondent to provide answers to questions on examinations for discovery that were refused, or to which unresponsive answers were provided.

The underlying appeal concerns the application of the general anti-avoidance rule (GAAR) to deny loss carryforwards and other deductions.

The Tax Court of Canada allowed the motion in part, ordering the Respondent to provide certain sealed documents and GAAR Committee documents, subject to redactions for third-party information and claims of solicitor-client privilege, finding that these documents were relevant for the purposes of discovery as they were considered in the context of the audit of the Appellant or the decision to apply the GAAR.

The Minister reassessed the appellant under the transfer pricing rules in section 247 of the Income Tax Act, reallocating all profits earned by a related Barbados corporation from the sale of a herbicide to the appellant's income.

The Minister argued the transactions were a sham, or alternatively, that they should be recharacterised or adjusted because arm's length parties would not have entered into them or agreed to the same terms.

The Tax Court of Canada allowed the appeal, finding no evidence of deceit to support a sham.

The court held that the Barbados corporation bore real risks, owned the inventory, and performed valuable functions.

Furthermore, the appellant demolished the Minister's assumptions by providing unrefuted expert evidence that the service fee paid to the appellant was within a reasonable arm's length range.

The reassessments and associated penalties were vacated.

The appellant brought an interlocutory motion under Rule 53(1) of the Tax Court of Canada Rules to strike portions of the respondent's Amended Reply.

The underlying appeal concerned the deductibility of a charitable donation to a tax shelter program.

The appellant argued that the respondent's pleadings contained immaterial facts, evidence, and assumptions beyond his knowledge.

The court reviewed the principles of pleading and held that most of the impugned paragraphs should remain, as issues of materiality and onus of proof are better left to the trial judge.

The motion was allowed only to the extent of striking the word 'domiciled' in three places, as it improperly mixed fact and law.

The Minister of Revenue reassessed two trusts, the Herman Grad 2000 Family Trust and the Marya Grad Spousal Trust, for provincial taxes on the basis that they were resident in Ontario, not Alberta, during the 2006 to 2009 taxation years.

The trusts appealed, arguing their trustees resided in Alberta and exercised management and control there.

The Superior Court of Justice dismissed the appeals, finding that the central management and control of both trusts was actually exercised by the settlor and his financial advisor, both resident in Ontario, who directed the trusts' investment and distribution decisions.