Tax Law - OCA

The appellants were convicted of multiple counts of GST and income tax evasion based on a net worth analysis.

Their summary conviction was upheld on appeal to the Superior Court of Justice.

They sought leave to appeal to the Court of Appeal, arguing the trial judge improperly stereotyped electricians and engaged in prohibited propensity reasoning by referencing documents about an unrelated fraudulent scheme.

The Court of Appeal denied leave, finding the trial judge's comments, while unfortunate, did not amount to reviewable error or raise significant issues of trial fairness, and the case against the appellants was overwhelming.

The Minister of Finance appealed a Superior Court of Justice decision regarding the interpretation of the Retail Sales Tax Act.

The Court of Appeal dismissed the appeal, finding that the trial judge correctly interpreted the relevant provisions of the Act.

Costs were awarded to the respondent in the amount of $22,500.

The appellant appealed a decision finding it liable for tax under s. 189(1)(e) of the Mining Act.

The Court of Appeal dismissed the appeal, agreeing with the application judge that the appellant's acquisition of mineral rights fell within the statutory definition of 'mining rights'.

The court held that the industry distinction between surface rights and surface access rights does not apply for the purpose of tax liability under the Act.

The appellant brought an action in the Ontario Superior Court attacking a decision of the tax court.

The appellant had already exhausted his right to appeal the tax court decision.

The Court of Appeal dismissed the appeal, agreeing with the motion judge that the appellant is not entitled to collaterally attack the tax court decision in the Superior Court.

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.

The Minister assessed the respondent for unremitted retail sales tax on the basis that she was a director of her brother's company.

The respondent was never a director and had no involvement with the company, but missed the time limits to object to the assessment under the Retail Sales Tax Act.

She obtained a declaration from the Superior Court that she was not a director and not liable for the tax.

The Court of Appeal allowed the Minister's appeal, holding that the respondent could have raised a due diligence defence under the Act and that disputes concerning the validity of an assessment must be resolved within the statutory framework, not through an application for declaratory relief.

The appellant taxpayer obtained a declaratory judgment that it was not required to pay retail sales tax on rented wooden pallets because they did not fall within the definition of 'returnable container' under the Retail Sales Tax Act.

In response, the legislature retroactively amended the Act to broaden the definition.

The Minister successfully moved for a determination that the retroactive amendment applied to the appellant's outstanding tax assessment appeals.

The Court of Appeal dismissed the taxpayer's appeal, holding that there is no exception to the general application of valid retroactive legislation for 'adjudicated rights' where the prior declaration merely interpreted the former law.

The appellant appealed his conviction and sentence for defrauding the public of over $3 million in income tax and GST payments.

He argued that no fraud occurred because no false income tax returns were actually filed.

The Court of Appeal dismissed the appeal, finding that the appellant caused false GST returns to be filed and that his deliberate failure to file income tax returns, combined with creating false records, imperilled the public purse and constituted a risk of deprivation.

The sentence of six years' imprisonment and a $2,000,000 fine was upheld as fit.

The corporate appellants owned a commercial property that was severed in 2000.

In 2001, amendments to the Municipal Act imposed a new taxation scheme on 'eligible properties', including those that were subdivided or subject to a severance.

The appellants sought a declaration that the amendments did not apply retrospectively to their 2000 severance, arguing they had vested rights to the previous favourable tax treatment.

The Court of Appeal dismissed the appeal, holding that the definition of 'eligible property' operates retrospectively to ensure tax fairness and that the appellants had no vested right to the continuance of the previous tax scheme.

The Minister of Finance appealed a Superior Court decision regarding a tax assessment.

The Court of Appeal dismissed the appeal, finding no error in the appeal judge's conclusion that the taxpayer was wholly-owned at the time of the transfer of tangible property within the meaning of Regulation 1013.

Costs of $10,000 were awarded to the respondent.

The Minister of Finance appealed a decision of the Superior Court of Justice.

The Court of Appeal dismissed the appeal, finding no error in the trial judge's careful and thorough reasons.

The appellant's request for leave to appeal costs was also denied, as there was no basis on the record to grant such leave.

The appellants brought an action in the Superior Court claiming they were exempt from paying GST on certain financial services under the Excise Tax Act.

The respondent successfully moved for summary judgment on the basis that the Tax Court of Canada had exclusive jurisdiction.

On appeal, the appellants argued the Superior Court had constitutional or concurrent jurisdiction.

The Court of Appeal dismissed the appeal, finding the claim was not constitutional in nature and that the Tax Court of Canada Act, read with the Excise Tax Act, clearly gave the Tax Court exclusive jurisdiction over GST rebate claims.

The respondent architectural firm produced volumes of blueprints and specifications, which it purchased from a third-party duplicator and distributed to contractors.

The Minister of Finance denied a retail sales tax exemption, arguing the volumes were not 'published' to the general public and were not 'solely' for a technical purpose due to the firm's commercial intent.

The Court of Appeal dismissed the Minister's appeal, holding that distribution to a targeted audience satisfies the publication requirement and that the technical purpose is determined by the content of the books, not the producer's commercial intention.

The accused was charged with income tax evasion.

At his second trial, he argued that he was not obligated to pay taxes because the Income Tax Act did not apply to him as a 'natural person'.

The trial judge put this defence to the jury, and the accused was acquitted.

The Crown appealed.

The Court of Appeal allowed the appeal, holding that the accused's belief that the Act did not apply to him was a mistake of law that did not constitute a defence to tax evasion.

The trial judge erred in putting this unavailable defence to the jury.

A new trial was ordered.

The accused were investigated by the CRA for tax evasion and fraud after a referral from the RCMP.

The trial judge found that the CRA auditor was conducting a criminal investigation from the outset, violating section 8 of the Charter by using regulatory inspection powers.

The trial judge quashed the search warrants, excluded the evidence under section 24(2), and awarded costs to the accused.

The Crown appealed.

The Court of Appeal allowed the appeal in part, setting aside the acquittals and ordering a new trial.

The majority held that the auditor's inquiries did not violate section 8, as their predominant purpose was not the determination of penal liability, making that evidence admissible.

The Court unanimously set aside the costs award, finding no exceptional circumstances or Crown misconduct.

The Minister of Finance assessed IBM Canada for payroll tax under the Employer Health Tax Act on moneys paid to expatriate employees working abroad for foreign affiliates.

The Superior Court of Justice held that while the expatriates remained employees of IBM Canada, the payments did not constitute 'remuneration paid' because the foreign affiliates reimbursed IBM Canada.

The Court of Appeal allowed the Minister's appeal, finding that the payments were made in the context of an ongoing employer/employee relationship and thus constituted 'remuneration paid' under the Act, regardless of the ultimate economic burden.

IBM Canada's cross-appeal challenging the existence of the employer/employee relationship was dismissed.

The appellants appealed the dismissal of their applications for certiorari to quash their committals for trial on charges of making false and fraudulent claims for GST refunds.

The preliminary inquiry judge found evidence supporting a reasonable inference that the appellants were not involved in commercial activity and generated paperwork solely to defraud the government of GST refunds.

The appellants argued that under a literal interpretation of the Excise Tax Act, they were entitled to claim GST credits even if the transactions were constructed solely to obtain public money.

The Court of Appeal rejected this argument, finding no jurisdictional error by the preliminary inquiry judge, and dismissed the appeals.

The appellants, Ontario limited partnerships, mistakenly believed that fees paid to non-resident film studios were deductible and remitted withholding taxes to the Canada Revenue Agency (CRA) on their behalf.

When the CRA later denied the deductions, meaning no withholding tax was actually owed, the appellants sued the CRA in unjust enrichment to recover the remitted funds.

The Court of Appeal affirmed the dismissal of the action, holding that under the Income Tax Act, any overpayment is owed only to the non-residents, not the remitting party.

Furthermore, Part XIII of the Act provides a complete procedural code for the return of withholding taxes, granting exclusive jurisdiction to the Tax Court of Canada.

The appellants appealed a summary judgment, arguing the motion judge erred by not ordering a trial on the issue of a set-off for capital gains tax and liability for recapture.

The Court of Appeal dismissed the appeal, finding that because there was only a potential future liability for capital gains tax and recapture, there were no existing claims capable of giving rise to a set-off.

The dismissal was without prejudice to the appellants bringing future claims or seeking a stay of enforcement under Rule 20.08 if such claims materialize.

Costs of $7,500 were awarded to the respondents.

The University Health Network (UHN) was formed through the amalgamation of several hospitals, each of which previously held an express statutory exemption from retail sales tax.

The amalgamation statutes repealed the individual hospital acts, including their tax exemptions, but contained 'continuation of rights' clauses.

UHN sought a declaration that these clauses preserved its tax-exempt status.

The Court of Appeal held that even if a tax exemption is a 'right' under the continuation clauses, it did not survive the repeal of the specific statutes granting the exemptions.

The court applied principles of statutory interpretation, including implied exclusion, to conclude that the Legislature did not intend to continue the tax exemptions for UHN.