COURT OF APPEAL FOR ONTARIO

CITATION: Iskander v. BMO Nesbitt Burns Inc., 2014 ONCA 582

DATE: 20140814

DOCKET: C58725

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

[1] It 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).

[2] On 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.

[3] In the circumstances, this is an appropriate case for this court to make the determination that the application judge should have made.

[4] The 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.

[5] In 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.

[6] Nor 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.

[7] Of course, it remains open to these parties to resolve the matter on the basis of proper documentation.

[8] In 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.”