Nancy Josee Arnold

Jayco, Inc. appealed the dismissal of its action against the Canada Revenue Agency (CRA) and Her Majesty the Queen in Right of Canada.

Jayco sought recovery of legal costs and interest incurred while successfully contesting a GST/HST assessment.

The claims were based on theories of common law indemnity (as a statutory agent under the Excise Tax Act) and private law duty of care (negligence) owed by the CRA during an audit.

The Court of Appeal dismissed the appeal, affirming that no common law right to indemnity exists for statutory agents in this context, nor does the CRA owe a private law duty of care to taxpayers during administrative audits, distinguishing such audits from criminal investigations.

The plaintiff, a U.S. business registered to collect HST, successfully appealed a $14 million CRA tax assessment but incurred over $1.4 million in interest and professional fees.

The plaintiff sued the government for indemnity and negligence, alleging the CRA acted in bad faith during the audit.

The defendants moved to strike the statement of claim.

The Superior Court of Justice granted the motion, finding that neither the common law nor the Excise Tax Act provides a right to indemnity for such costs, and that the CRA does not owe a private law duty of care to taxpayers or tax collection agents during an audit.

The plaintiff brought a proposed class action against the Canada Revenue Agency and a CRA employee on behalf of investors in a tax-driven investment scheme.

The parties negotiated a settlement to resolve the tax disputes and civil claims, which was accepted by over 90% of the putative class members.

The plaintiff moved for a pre-certification order to discontinue the proposed class action to implement the settlement.

The court approved the discontinuance under s. 29 of the Class Proceedings Act, 1992, finding it was not prejudicial to the putative class members.

Self-represented appellants appealed the dismissal of their application in which they claimed a right under section 7 of the Canadian Charter of Rights and Freedoms to choose their relationship with Canada and to be exempt from federal and provincial laws without their consent.

The appellants argued they could distinguish between the geographic landmass of Canada and the "Juristic Federal Unit Canada" and that they were not bound by tax legislation or other laws of general application.

The Court of Appeal dismissed the appeal, holding that residents of Canada are subject to federal and provincial laws that apply to residents, and that the appellants' arguments were based on selective and improper interpretations of the Charter and international covenants.

The appellants appealed the trial judge's award of costs in favour of the respondents following an unsuccessful trial.

The appellants had brought a claim for misfeasance in public office but discontinued it midway through trial after the trial judge identified that they lacked evidence for an essential element.

They sought to reopen the claim based on fresh evidence, which the trial judge rejected.

The appellants argued that no costs should be awarded due to the respondents' conduct, but this argument was based on the same evidence that had already been rejected in the misfeasance claim.

The Court of Appeal refused leave to appeal costs, finding that the trial judge had properly considered the respondents' conduct and reduced the costs award accordingly.

The defendants, having successfully moved to dismiss the plaintiff's action under Rule 21, sought costs of over $35,000 on a partial indemnity basis.

The plaintiff argued the amount was excessive for a straightforward motion and pointed to his own costs outline of approximately $6,600.

The court found that while the Department of Justice lawyers were entitled to costs, the hours claimed were disproportionate to the narrow legal question involved.

The court awarded the defendants $15,000 in all-inclusive partial indemnity costs, balancing the moving party's burden with the reasonable expectations of the unsuccessful party.

The plaintiff participated in a charitable donation tax shelter, claiming substantial tax refunds which were later disallowed by the Canada Revenue Agency (CRA).

The plaintiff brought a claim in Superior Court alleging CRA and its employees owed a duty to police the registration of the charity associated with the scheme and to warn the public.

The defendants moved to strike the statement of claim.

The court allowed the motion, finding no duty of care owed by CRA to warn taxpayers about unsuccessful tax schemes, that the Charter claim was bald and untenable, and that claims against individual employees were an abuse of process.

The court also struck damages related to the lost tax deduction as being within the exclusive jurisdiction of the Tax Court.

The appellant appealed a decision granting the equitable remedy of rectification to correct mistaken share redemptions that triggered unintended tax consequences.

The application judge found that the respondents had a continuing intention to carry out loan arrangements on a tax-neutral basis and that the share redemptions were a mistake.

The Court of Appeal dismissed the appeal, holding that under the binding authority of Juliar, the critical requirement for rectification is proof of a continuing specific intention to undertake a transaction on a particular tax basis, which the respondents had established.

The Canada Revenue Agency (CRA) obtained a jeopardy order under the Income Tax Act to collect a tax debt from a corporation on the eve of its receivership.

The CRA garnished funds from the corporation's bank account.

The corporation was subsequently declared bankrupt.

The trustee in bankruptcy brought a motion seeking the return of the garnished funds, arguing the jeopardy order conflicted with the priority scheme in the Bankruptcy and Insolvency Act (BIA).

The Court of Appeal dismissed the trustee's appeal, holding that the motion was an impermissible collateral attack on the Federal Court's jeopardy order.

Furthermore, the garnishment was a completely executed process prior to bankruptcy under s. 70(1) of the BIA, and the CRA's actions did not constitute an improper Crown priority or inequitable conduct.

In an addendum to a previous decision, the Court of Appeal for Ontario determined the issue of costs for the application and the appeal.

Agreeing with the submissions of the respondent Director, the court ordered that each party bear its own costs.

A real estate broker became insolvent after its principal misappropriated trust funds for day-to-day operations.

The Director, representing the trust claimants, asserted priority over the broker's assets, including accounts receivable collected by a secured bank and funds remaining in trust accounts.

The Court of Appeal held that the accounts receivable were not impressed with a constructive trust because there was no clear connection between the misappropriated funds and the generated receivables, allowing the bank to realize its security.

Furthermore, the funds remaining in the trust accounts were not restored trust funds, giving the Crown priority over those funds pursuant to the deemed trust provisions of the Income Tax Act.