COURT OF APPEAL FOR ONTARIO
Sharpe, Simmons and Pardu JJ.A.
BETWEEN
Christopher David Iskander
Applicant (Respondent)
and
BMO Nesbitt Burns Inc. and BMO Trust Company
Respondents (Appellants)
Mark Veneziano and Ian MacLeod, for BMO Nesbitt Burns Inc.
Nancy Arnold and Angela Shen, for the intervener, the Attorney General of Canada
Christopher David Iskander, in person
Heard and released orally: August 11, 2014
On appeal from the judgment of Justice P.T. Matlow of the Superior Court of Justice, dated April 16, 2014.
ENDORSEMENT
1It is common ground that the only issue before the application judge was whether the applicant had provided BMO Nesbitt Burns (BMO) adequate information to allow BMO to deregister shares in a private corporation held in the applicant’s RRSP. The applicant accepted that BMO would be required to withhold and remit withholding tax to Canada Revenue Agency (CRA).
2On his own motion, the application judge determined that there was no basis in law for BMO to withhold tax. He erred in so holding. That issue was not before him and this was not the appropriate forum to make that determination: Tax Court of Canada Act, R.S.C. 1985, c. T-2. S. 12.
3In the circumstances, this is an appropriate case for this court to make the determination that the application judge should have made.
4The applicant took the position that he had provided adequate information from which BMO could determine the value of the shares, namely, an offer by a third party to sell shares of a different class at the price of 50 cents per share and a letter the applicant sent to the CRA purporting to confirm a conversation with a CRA representative that an offer to sell shares would be sufficient evidence to establish market value.
5In our view, BMO was within its contractual rights to refuse to deregister the shares on the basis of the information the applicant had provided. The offer, standing alone without the shareholders’ agreement or any other details of the company’s affairs, was inadequate.
6Nor do we agree with the applicant’s interpretation of the exchange of emails between him and BMO as to what BMO would require. It was the applicant who insisted that BMO deregister the shares on the basis of the offer and we do not agree that BMO refused to accept anything other than a letter from the company as to the value of the shares.
7Of course, it remains open to these parties to resolve the matter on the basis of proper documentation.
8In the result, the appeal is allowed, the order of the application judge is set aside and the application is dismissed. Costs to the appellant fixed at $10,000 inclusive of disbursements and taxes, payable by the applicant.
“Robert J. Sharpe J.A.”
“”Janet Simmons J.A.”
“G. Pardu J.A.”