The Federal Court of Appeal clarified that the application of the formula set out in s.40(2)(b) of the Income Tax Act requires an annual determination, rather than a single determination at the time of disposition of the taxpayer’s “principle residence.” The formula set out in s.40(2)(b) is used to determine the capital gain tax payable on this disposition.
The Income Tax Act [the “Act”] allows an exemption on capital gains that are realized from the disposition of a principal residence. This exemption, per s.54(e) of the Act, is limited to 0.5 hectares unless the taxpayer can show that any additional land claimed was necessary for the use and enjoyment of the property. It is undisputed that Cassidy’s property was a principal residence, and at the time the property was purchased, zoning by-laws prohibited the land from being smaller than 2.43 hectares. Accordingly, more than 0.5 hectares was necessary for the use and enjoyment of the property. In 2003, the year the taxpayer disposed of the property, zoning by-laws changed and Cassidy could have divided the land prior to disposition. The Crown argued that s.40(2)(b) called for a single determination of capital gain at the time of disposition. Since the land had been re-zoned at this time, only half a hectare of land was necessary for the use and enjoyment of the property, and accordingly only this amount should receive favourable tax status. Sharlow JA rejected this approach, holding that s.40(2)(b), interpreted according to the language and purpose of the Act, required an annual determination. According to Sharlow JA, the purpose of s.40(2)(b) is to relieve taxpayers from capital gain taxes where the gain is realized on the sale of their principle residence. Annual determination ensures that this benefit is partially available in the case of properties that do not meet the definition of “principle residence” for the entire period of ownership.
September 30, 2011
Link to Decision
Kaitlind de Jong & Steve Holinski
*
Friday, September 30, 2011
CIBC World Markets Inc. v. Canada, 2011 FCA 270
In CIBC World Markets Inc. v. Canada, the Federal Court of Appeal held that the Excise Tax Act allows a goods and services tax (GST) registrant to make a second claim for input tax credits using a different method than that used for a prior claim concerning the same taxation year. Stratus J.A., writing for the court, found that while there are no words in the GST provisions of the Act that expressly allow a GST registrant to make such a claim, the general scheme and purpose of the GST provisions and the lack of statutory wording to the contrary support the possibility.
Justice Stratus noted that not only are there no words in the Act which prohibit more than one claim for input tax credits concerning the same taxation year, but that s. 225(3) specifically contemplates such a possibility. He held that while the objective of “fiscal certainty” would favour only allowing for one claim, this objective is not one that suffuses the entire Act. In fact, many sections work against such finality or “fiscal certainty.”
Finally, Justice Stratus decided that using a revised method is not contrary to s. 141.01(5) because the subsection merely requires consistency throughout the entire year once a method is chosen. It prevents using one method at one part of the year and another method at another part of the year. He concluded that this interpretation was consistent with the plain meaning of the Act.
September 30, 2011
Link to Decision
Mark Carter, Leo Elias & Marc Gibson
*
Justice Stratus noted that not only are there no words in the Act which prohibit more than one claim for input tax credits concerning the same taxation year, but that s. 225(3) specifically contemplates such a possibility. He held that while the objective of “fiscal certainty” would favour only allowing for one claim, this objective is not one that suffuses the entire Act. In fact, many sections work against such finality or “fiscal certainty.”
Finally, Justice Stratus decided that using a revised method is not contrary to s. 141.01(5) because the subsection merely requires consistency throughout the entire year once a method is chosen. It prevents using one method at one part of the year and another method at another part of the year. He concluded that this interpretation was consistent with the plain meaning of the Act.
September 30, 2011
Link to Decision
Mark Carter, Leo Elias & Marc Gibson
*
Wednesday, September 28, 2011
Wallace v. Canadian Pacific Railway, 2011 SKCA 108
The Court in Wallace v. Canadian Pacific Railway clarified the duty of loyalty that lawyers owe to their clients in situations where there are conflicting interests. It was also found that the remedy of disqualification should not be used for punishment but to protect the public’s confidence in the legal profession and the administration of justice.
In this case, the respondent had its former counsel, the appellant, disqualified from acting as counsel for the representative plaintiff of an upcoming class action that the appellant had begun acting for while still working on unrelated matters for the respondent. In adjudicating the case, the Court applied the test from R. v. Neil concerning the "Professional Litigant Exception" and the "bright line" rule disallowing a lawyer simultaneously representing two clients whose interests are adverse. The Court held that the "Professional Litigant Exception" does not only apply to minor or non-contentious unrelated matters, and advocated a more flexible approach to the Neil test looking at all the circumstances.
Relevant factors for this analysis included: the size and sophistication of the former client; dependency on the solicitor; the type of cases worked on by the solicitor; the danger of confidential information being abused; vulnerability of the former client; and whether or not the solicitor’s actions would diminish the public’s confidence in the profession. In looking for a suitable remedy, it was found that even though the appellant had breached its duty of candour, disqualification would not be appropriate. Instead, the Court held that where there is no further relationship between the solicitor and former client to protect; where there is no risk of prejudicial use of confidential information; where disqualification would be unnecessarily costly to the parties; and where other remedies are available to the former client disqualification should not be used.
September 28, 2011
Link to Decision
Liam Oster
*
In this case, the respondent had its former counsel, the appellant, disqualified from acting as counsel for the representative plaintiff of an upcoming class action that the appellant had begun acting for while still working on unrelated matters for the respondent. In adjudicating the case, the Court applied the test from R. v. Neil concerning the "Professional Litigant Exception" and the "bright line" rule disallowing a lawyer simultaneously representing two clients whose interests are adverse. The Court held that the "Professional Litigant Exception" does not only apply to minor or non-contentious unrelated matters, and advocated a more flexible approach to the Neil test looking at all the circumstances.
Relevant factors for this analysis included: the size and sophistication of the former client; dependency on the solicitor; the type of cases worked on by the solicitor; the danger of confidential information being abused; vulnerability of the former client; and whether or not the solicitor’s actions would diminish the public’s confidence in the profession. In looking for a suitable remedy, it was found that even though the appellant had breached its duty of candour, disqualification would not be appropriate. Instead, the Court held that where there is no further relationship between the solicitor and former client to protect; where there is no risk of prejudicial use of confidential information; where disqualification would be unnecessarily costly to the parties; and where other remedies are available to the former client disqualification should not be used.
September 28, 2011
Link to Decision
Liam Oster
*
Tuesday, September 27, 2011
R. v. R.D.R., 2011 NSCA 86
In R. v. R.D.R. the Nova Scotia Court of Appeal held that the replacement of the Youth Offenders Act (YOA) with the Youth Criminal Justice Act (YCJA) did not change existing jurisprudence nor did it result in a special constitutional guarantee for young persons.
Beveridge J.A., writing for the court, held that the YCJA did not alter the proper approach to evaluating whether a young person's Charter right to be tried within a reasonable period was violated and rejected the argument that young offenders should be treated differently from adults in that respect.
The appellant, convicted in Youth Court, challenged the decision by the trial judge that his right to be tried within a reasonable period of time had not been infringed, arguing that the YCJA granted young persons "special guarantees" to be tried without delay. The appellant also submitted that previous jurisprudence holding that the YOA did not grant a constitutional guarantee to trial without delay should be disregarded. Beveridge J.A. disagreed, stating the YCJA did not create new requirements. Rather, the court held that the term "promptness and speed" in s. 3 of the YCJA must be read in context, and procedural fairness to the state and the accused take precedence over speed. In the case at bar the appellant was partly responsible for the delay, and Justice Beveridge held that the long period until trial did not violate the appellant's Charter rights.
September 27, 2011
Link to Decision
Adrienne Ho
*
Beveridge J.A., writing for the court, held that the YCJA did not alter the proper approach to evaluating whether a young person's Charter right to be tried within a reasonable period was violated and rejected the argument that young offenders should be treated differently from adults in that respect.
The appellant, convicted in Youth Court, challenged the decision by the trial judge that his right to be tried within a reasonable period of time had not been infringed, arguing that the YCJA granted young persons "special guarantees" to be tried without delay. The appellant also submitted that previous jurisprudence holding that the YOA did not grant a constitutional guarantee to trial without delay should be disregarded. Beveridge J.A. disagreed, stating the YCJA did not create new requirements. Rather, the court held that the term "promptness and speed" in s. 3 of the YCJA must be read in context, and procedural fairness to the state and the accused take precedence over speed. In the case at bar the appellant was partly responsible for the delay, and Justice Beveridge held that the long period until trial did not violate the appellant's Charter rights.
September 27, 2011
Link to Decision
Adrienne Ho
*
R. v. Khan, 2011 BCCA 382
In R. v. Khan, the Court of Appeal for British Columbia commented on the obligations of counsel and trial judge in the context of a Vetrovec warning and on the evidentiary burden associated with a third-party suspect defence.
In R. v. Khela, the Supreme Court of Canada held that, in a case where the testimony of unsavoury witnesses necessitates a Vetrovec warning, Crown and defence counsel must provide the jury with examples of evidence which can, or cannot, be considered confirmatory of the tainted witness’s testimony. Justice Frankel added that counsel have a responsibility to be correct in these submissions. If evidence is mischaracterized by counsel, the trial judge has a responsibility to correct that error in his instruction to the jury. The Court further considered that, where an unsavoury witness reports to police that he has been asked to participate in a crime, and that crime later occurs, evidence that the crime did in fact occur is capable of bolstering the witness’s credibility.
The Court also held that, in raising a third-party suspect defence, the accused does not have to show evidence of the third party’s opportunity, motive, or propensity to commit the crime in order for the defence to raise a reasonable doubt in the mind of a properly instructed jury.
September 27, 2011
Link to Decision
Zarya Cynader & Mary Phan
*
In R. v. Khela, the Supreme Court of Canada held that, in a case where the testimony of unsavoury witnesses necessitates a Vetrovec warning, Crown and defence counsel must provide the jury with examples of evidence which can, or cannot, be considered confirmatory of the tainted witness’s testimony. Justice Frankel added that counsel have a responsibility to be correct in these submissions. If evidence is mischaracterized by counsel, the trial judge has a responsibility to correct that error in his instruction to the jury. The Court further considered that, where an unsavoury witness reports to police that he has been asked to participate in a crime, and that crime later occurs, evidence that the crime did in fact occur is capable of bolstering the witness’s credibility.
The Court also held that, in raising a third-party suspect defence, the accused does not have to show evidence of the third party’s opportunity, motive, or propensity to commit the crime in order for the defence to raise a reasonable doubt in the mind of a properly instructed jury.
September 27, 2011
Link to Decision
Zarya Cynader & Mary Phan
*
Bodnar v. The Cash Store Inc., 2011 BCCA 384
In this case, the British Columbia Court of Appeal decided that a court has jurisdiction to replace the administrator of a class action settlement where the court has lost confidence in the settlement administrator. Justice Neilson dismissed the appeal, holding that replacing the administrator did not amount to varying or rewriting the terms of the settlement, and thus did not exceed the court’s jurisdiction.
A class action brought against a number of payday loan companies was settled, and the appellants were appointed administrators of the settlement agreement. However, they used the wrong formula for determining the claims of members and failed to respond to over forty claims. After the appellants failed to meet deadlines to rectify the problem, counsel for the class members sought to have them replaced as settlement administrators. The appellants argued that this would effectively rewrite the settlement agreement, a remedy which was not within the court’s jurisdiction.
Justice Neilson agreed with the chambers judge that the appellants did not demonstrate any prejudice arising from their removal and replacement as settlement administrators. This was an administrative matter and immaterial to the substance of the settlement. Under s. 12 of the Class Proceedings Act, the court has the authority to make any appropriate order to ensure the fair and expeditious conduct of a class proceeding. An order to replace a settlement administrator in whom the court has lost confidence is within the scope of that statutory power. Justice Neilson therefore dismissed the appeal.
September 27, 2011
Link to Decision
Zarya Cynader & Sam Golder
*
A class action brought against a number of payday loan companies was settled, and the appellants were appointed administrators of the settlement agreement. However, they used the wrong formula for determining the claims of members and failed to respond to over forty claims. After the appellants failed to meet deadlines to rectify the problem, counsel for the class members sought to have them replaced as settlement administrators. The appellants argued that this would effectively rewrite the settlement agreement, a remedy which was not within the court’s jurisdiction.
Justice Neilson agreed with the chambers judge that the appellants did not demonstrate any prejudice arising from their removal and replacement as settlement administrators. This was an administrative matter and immaterial to the substance of the settlement. Under s. 12 of the Class Proceedings Act, the court has the authority to make any appropriate order to ensure the fair and expeditious conduct of a class proceeding. An order to replace a settlement administrator in whom the court has lost confidence is within the scope of that statutory power. Justice Neilson therefore dismissed the appeal.
September 27, 2011
Link to Decision
Zarya Cynader & Sam Golder
*
Monday, September 26, 2011
R. v. Woodward, 2011 ONCA 610
In R. v. Woodward, the defendant challenged both his conviction and length of sentence in relation to the offence of luring by means of a computer system under (as it was then) s.172.1(1) of the Criminal Code. Writing for the court, Moldaver J.A., dismissed the appeal on both grounds and provided guidance as to the meaning of “computer system” under s.342.1(2) of the Code and the sentencing of offenders who engaged in the luring of children over the internet.
The appellant argued that text messaging via cell phone did not fall within the actus reus required under s. 172.1(1). Under that section a person must communicate with another by means of a computer system within the meaning of s. 342.1(2) of the Code. The court rejected the appellant’s argument, holding that text messaging required a “logic” and “control” function preformed by telephone networks to deliver messages between phones. This process amounted to a computer system. Supporting this finding, the court pointed out that Parliament has made two attempts to change the highly technical definition of computer system in the Code.
The court also rejected the appellant’s argument that his sentence was in excess of the usual range of those convicted of similar offences. Moldaver J.A., noted that the decision of Rosenburg J.A. in R. v. Jarvis (2006), 211 C.C.C. (3d) 20 (C.A.) has been incorrectly interpreted as setting the range of sentencing of 12 months to 2 years for offenders who engage in online luring. Instead, the court determined that internet luring was a pervasive social problem warranting stiffer sentences in the range of 3 to 5 years in order to meet the goals of deterrence, denunciation and separation of society. Moldaver J.A. then held that when considering a sentence in this type of case, “ the focus of the sentencing hearing should be on the harm caused to the child by the offender’s conduct and the life-altering consequences that can and often do flow from it.”
September 26, 2011
Link to Decision
Heather Palin
*
The appellant argued that text messaging via cell phone did not fall within the actus reus required under s. 172.1(1). Under that section a person must communicate with another by means of a computer system within the meaning of s. 342.1(2) of the Code. The court rejected the appellant’s argument, holding that text messaging required a “logic” and “control” function preformed by telephone networks to deliver messages between phones. This process amounted to a computer system. Supporting this finding, the court pointed out that Parliament has made two attempts to change the highly technical definition of computer system in the Code.
The court also rejected the appellant’s argument that his sentence was in excess of the usual range of those convicted of similar offences. Moldaver J.A., noted that the decision of Rosenburg J.A. in R. v. Jarvis (2006), 211 C.C.C. (3d) 20 (C.A.) has been incorrectly interpreted as setting the range of sentencing of 12 months to 2 years for offenders who engage in online luring. Instead, the court determined that internet luring was a pervasive social problem warranting stiffer sentences in the range of 3 to 5 years in order to meet the goals of deterrence, denunciation and separation of society. Moldaver J.A. then held that when considering a sentence in this type of case, “ the focus of the sentencing hearing should be on the harm caused to the child by the offender’s conduct and the life-altering consequences that can and often do flow from it.”
September 26, 2011
Link to Decision
Heather Palin
*
Friday, September 23, 2011
Daishowa Paper Manufacturing Ltd. v. Canada, 2011 FCA 267
In Daishowa Paper Manufacturing Ltd. v. Canada, the majority of the Federal Court of Appeal ("FCA") affirmed the characterization of reforestation liabilities as proceeds of disposition for the purposes of the Income Tax Act (“ITA”). Mainville J.A., in dissent, held that such liabilities should flow with the property.
The case arose when the appellant sold two of its subsidiary timber businesses. Both sales included the assumption by the purchasers of medium-term silviculture (reforestation) liabilities whose values were fixed by the terms of sale. These liabilities arise when a stand of trees is cut down, but are not satisfied until a sufficiently reforested tree crop surpasses a free-growing growth point, typically after eight to fourteen years. Since subpara. 39(1)(a)(iv) of the ITA excludes timber resource properties from capital gain treatment, the Minister of Revenue (“Minister”) viewed the amounts as proceeds of disposition within the meaning of s. 13(21) of the ITA, and accordingly included them in the appellant’s income for the relevant taxation years.
The Tax Court of Canada agreed that the amounts were proceeds of disposition, but discounted the long-term liability for tax purposes to recognize that the actual cost of the liability cannot be known until some years after the sale. The FCA held that it was not open to the court to discount the liabilities, but Justice Nadon (Layden-Stevenson J.A. concurring) agreed that the reforestation liabilities should be included in the appellant’s proceeds of sale. Justice Nadon noted that both contracts agreed to a specific valuation of the reforestation liabilities, and held that this must be the valuation used for income tax purposes. He emphasized that for the purposes of the ITA, the distinction between absolute and contingent liabilities is irrelevant; the key question is how the parties have chosen to value the iability in their contract of sale. Furthermore, the deduction in price that the appellant assumed based on the assumption of liability by the purchaser cannot lead to a reduction of the value for income tax purposes.
Justice Mainville, dissenting, would have found that, as reforestation liabilities form an integral part of the forestry business, and as the government will not allow the sale without the inclusion of the liabilities, the liabilities flow with the property. Consequently, they cannot be regarded separately from the rest of the sale and should not be added to the proceeds of disposition. Justice Mainville held that the majority's approach would create a system in which vendors who do not specifically value their liabilities would escape taxation.
September 23, 2011
Link to Decision
Zarya Cynader, Marc Gibson & Mary Phan
*
The case arose when the appellant sold two of its subsidiary timber businesses. Both sales included the assumption by the purchasers of medium-term silviculture (reforestation) liabilities whose values were fixed by the terms of sale. These liabilities arise when a stand of trees is cut down, but are not satisfied until a sufficiently reforested tree crop surpasses a free-growing growth point, typically after eight to fourteen years. Since subpara. 39(1)(a)(iv) of the ITA excludes timber resource properties from capital gain treatment, the Minister of Revenue (“Minister”) viewed the amounts as proceeds of disposition within the meaning of s. 13(21) of the ITA, and accordingly included them in the appellant’s income for the relevant taxation years.
The Tax Court of Canada agreed that the amounts were proceeds of disposition, but discounted the long-term liability for tax purposes to recognize that the actual cost of the liability cannot be known until some years after the sale. The FCA held that it was not open to the court to discount the liabilities, but Justice Nadon (Layden-Stevenson J.A. concurring) agreed that the reforestation liabilities should be included in the appellant’s proceeds of sale. Justice Nadon noted that both contracts agreed to a specific valuation of the reforestation liabilities, and held that this must be the valuation used for income tax purposes. He emphasized that for the purposes of the ITA, the distinction between absolute and contingent liabilities is irrelevant; the key question is how the parties have chosen to value the iability in their contract of sale. Furthermore, the deduction in price that the appellant assumed based on the assumption of liability by the purchaser cannot lead to a reduction of the value for income tax purposes.
Justice Mainville, dissenting, would have found that, as reforestation liabilities form an integral part of the forestry business, and as the government will not allow the sale without the inclusion of the liabilities, the liabilities flow with the property. Consequently, they cannot be regarded separately from the rest of the sale and should not be added to the proceeds of disposition. Justice Mainville held that the majority's approach would create a system in which vendors who do not specifically value their liabilities would escape taxation.
September 23, 2011
Link to Decision
Zarya Cynader, Marc Gibson & Mary Phan
*
Thursday, September 22, 2011
Sutherland v. Hudson's Bay Company, 2011 ONCA 606
In Sutherland v. Hudson's Bay Company, the Ontario Court of Appeal addressed the ownership of surplus funds in a company pension plan, holding that such funds were subject to the same equitable principles governing the pension fund itself, even though provisions in the plan documentation provided that the surplus funds could revert to the company in certain cases.
The respondents, former employees of Hudson's Bay Company ("HBC"), alleged that HBC had misappropriated surplus pension funds that were properly due to the employees as plan beneficiaries. HBC, relying on the result in Burke v. Hudson's Bay Company, argued that it was a beneficiary and entitled to the surplus under the plan's terms. Justice Gillese (MacFarland J.A. concurring) dismissed the appeal. Following the analysis set out in Schmidt v. Air Products of Canada Ltd., Gillese J.A. found that the pension fund in question was the subject of an irrevocable trust which explicitly extended to any surplus. Accordingly, as per Schmidt, equitable principles must prevail to the extent of any conflict with the plan documentation – including the provisions on which HBC purported to rely. Although it did not change the Schmidt framework, Burke was distinguished from the present case, as the plan at issue in Burke clearly limited the employees’ interest in their defined benefits only.
Justice Rouleau, dissenting, would have allowed the appeal. While agreeing that Schmidt remained authoritative and had not been altered in principle by Burke, he considered the former to be distinguishable. In the present case, as in Burke, he would have read the plan documentation in its entirety, so as to reduce or eliminate conflict, as a matter of contractual interpretation. Read in this way, he suggested, the documentation entitled HBC to the surplus.
September 22, 2011
Link to Decision
Zarya Cynader, Mary Phan & Kai Sheffield
*
The respondents, former employees of Hudson's Bay Company ("HBC"), alleged that HBC had misappropriated surplus pension funds that were properly due to the employees as plan beneficiaries. HBC, relying on the result in Burke v. Hudson's Bay Company, argued that it was a beneficiary and entitled to the surplus under the plan's terms. Justice Gillese (MacFarland J.A. concurring) dismissed the appeal. Following the analysis set out in Schmidt v. Air Products of Canada Ltd., Gillese J.A. found that the pension fund in question was the subject of an irrevocable trust which explicitly extended to any surplus. Accordingly, as per Schmidt, equitable principles must prevail to the extent of any conflict with the plan documentation – including the provisions on which HBC purported to rely. Although it did not change the Schmidt framework, Burke was distinguished from the present case, as the plan at issue in Burke clearly limited the employees’ interest in their defined benefits only.
Justice Rouleau, dissenting, would have allowed the appeal. While agreeing that Schmidt remained authoritative and had not been altered in principle by Burke, he considered the former to be distinguishable. In the present case, as in Burke, he would have read the plan documentation in its entirety, so as to reduce or eliminate conflict, as a matter of contractual interpretation. Read in this way, he suggested, the documentation entitled HBC to the surplus.
September 22, 2011
Link to Decision
Zarya Cynader, Mary Phan & Kai Sheffield
*
McLean v. City of Miramichi, 2011 NBCA 80
The Court in this case held that s. 17.91 of the New Brunswick Police Act, (the "Act") which states a police officer shall not be dismissed for “unsatisfactory work performance”, except in accordance with the provisions of the Act, should be broadly interpreted to include cases of involving the common law doctrine of frustration as well as “impossibility of performance.”
Justice Robertson found that the legislature made a conscious decision to alter the Act in 2005 in order to ensure that terminations for cause that do not relate to misconduct are dealt with by the legislation and not by common law. Justice Robertson therefore reasoned that the way in which complaints are originally characterized - whether or not they are stated as being related to misconduct - is not dispositive in determining whether it falls within the provision. Additionally, the powers of the arbitrator appointed under the Act are broad enough to deal with the issues of frustration of an employment contract.
September 22, 2011
Link to Decision
Sierra Robart
*
Justice Robertson found that the legislature made a conscious decision to alter the Act in 2005 in order to ensure that terminations for cause that do not relate to misconduct are dealt with by the legislation and not by common law. Justice Robertson therefore reasoned that the way in which complaints are originally characterized - whether or not they are stated as being related to misconduct - is not dispositive in determining whether it falls within the provision. Additionally, the powers of the arbitrator appointed under the Act are broad enough to deal with the issues of frustration of an employment contract.
September 22, 2011
Link to Decision
Sierra Robart
*
McCaffrey v. Paleolog, 2011 BCCA 378
The British Columbia Court of Appeal held that a deliberate intent to evade child support obligations is not required in order to impute income to a spouse under s.19 of the Federal Child Support Guidelines [the “Guidelines”]. Further, the court clarified that childbirth does not automatically fall under the “needs of the child” exception set out in s. 19(1)(a) of the Guidelines. Finally, the court determined that it was inappropriate to fix a period of non-imputation based on the duration of maternity leave programs.
A mother, who had been ordered to make child support payments for children of a previous relationship, subsequently elected not to work. Instead, the mother chose to remain at home in order to care for a newborn child and her two-year old sibling. In determining whether to impute income to the mother under s.19(1)(a) of the Guidelines, the court rejected the Alberta jurisprudence requiring a finding of bad faith. The court also held that it was inappropriate to base the period of non-imputation on the duration of maternity leave programs: to do so would not take into account the positive obligation of a parent to support a child. While benefit schemes shift the burden of caring for children onto the employer or the public, child support payments shift the burden onto the payor parent. Further, not everyone is eligible for maternity leave programs, and neither can everyone afford the reduction in income that comes with such benefits. Finally, the court affirmed that a period of unemployment or underemployment is reasonable after childbirth. However, childbirth does not automatically exempt a parent from paying child support. The court affirmed that the circumstances of each situation must be evaluated on the criteria adopted in Watts v. Willie, and that any period of non-support must be reasonable.
September 22, 2011
Link to Decision
Fidelia Ho & Steve Holinski
*
A mother, who had been ordered to make child support payments for children of a previous relationship, subsequently elected not to work. Instead, the mother chose to remain at home in order to care for a newborn child and her two-year old sibling. In determining whether to impute income to the mother under s.19(1)(a) of the Guidelines, the court rejected the Alberta jurisprudence requiring a finding of bad faith. The court also held that it was inappropriate to base the period of non-imputation on the duration of maternity leave programs: to do so would not take into account the positive obligation of a parent to support a child. While benefit schemes shift the burden of caring for children onto the employer or the public, child support payments shift the burden onto the payor parent. Further, not everyone is eligible for maternity leave programs, and neither can everyone afford the reduction in income that comes with such benefits. Finally, the court affirmed that a period of unemployment or underemployment is reasonable after childbirth. However, childbirth does not automatically exempt a parent from paying child support. The court affirmed that the circumstances of each situation must be evaluated on the criteria adopted in Watts v. Willie, and that any period of non-support must be reasonable.
September 22, 2011
Link to Decision
Fidelia Ho & Steve Holinski
*
R. v. Deveau, 2011 NSCA 85
In R. v. Deveau, the Nova Scotia Court of Appeal held that there is no need for a respondent to file a pre-motion brief which commits the respondent to particular evidence for the motion. Fichaud J.A., writing for the court, held that the respondent is not estopped from calling evidence on the motion if no such brief had been filed in advance.
The accused brought a Charter motion at the outset of her trial and the Crown did not commit to calling any evidence until after it had heard the evidence for the motion from the applicant. The Provincial Court judge held that a respondent must file a pre-motion brief committing the respondent to particular evidence prior to hearing the applicant’s evidence or else the respondent is estopped from calling evidence. He therefore allowed the Charter motion and acquitted the accused. Fichaud J.A. noted that no authority for the estoppel had been cited and held that the trial judge's view was not a principle of law. He therefore ordered a new trial.
September 22, 2011
Link to Decision
Marc Gibson & Sierra Robart
*
The accused brought a Charter motion at the outset of her trial and the Crown did not commit to calling any evidence until after it had heard the evidence for the motion from the applicant. The Provincial Court judge held that a respondent must file a pre-motion brief committing the respondent to particular evidence prior to hearing the applicant’s evidence or else the respondent is estopped from calling evidence. He therefore allowed the Charter motion and acquitted the accused. Fichaud J.A. noted that no authority for the estoppel had been cited and held that the trial judge's view was not a principle of law. He therefore ordered a new trial.
September 22, 2011
Link to Decision
Marc Gibson & Sierra Robart
*
Carter Brothers Ltd. v. The Registrar of Motor Vehicles for the Province of New Brunswick, 2011 NBCA 81
In this case the New Brunswick Court of Appeal determined that "boom trucks" qualify as "special mobile equipment" under s. 1 of the Motor Vehicle Act, R.S.N.B. 1973, c. M-17 (MVA) and s. 7(6) of its General Regulation 83-42. Robertson J.A., writing for the court, noted an apparent discrepancy between the definitions in the statutory provision and the regulation and held that the statutory definition must therefore prevail. If any doubt remained as to how to resolve the apparent inconsistency, Justice Robertson was prepared to invoke the residual presumption in favour of the taxpayer.
After applying for and obtaining class "M" registration plates for its boom trucks for almost twenty years, the appellant was informed by the Registrar of Motor Vehicles that it must instead obtain more expensive class "L" plates. Justice Robertson held that the Registrar's legal interpretation of "special mobile equipment", as a question of law, was owed no deference by the court. Finding that there was "no obvious correlation" between the definition in the MVA and its regulations, he concluded that the simplest approach to resolving the inconsistency was to determine if boom trucks meet the criteria set out in the statutory definition. If so, nothing in the regulations should be able to undermine that conclusion. The MVA specifically refers to "concrete mixers" and "ditch digging apparatus" in its definition of special mobile equipment and Justice Robertson found that boom trucks fall in the same general class as those vehicles. His conclusion was aided by the residual presumption in favour of the taxpayer, which "should not be lost in future cases where the Attorney General is called upon to defend the government’s interpretation of fiscal legislation."
September 22, 2011
Link to Decision
Marc Gibson & Daniel Lo
*
After applying for and obtaining class "M" registration plates for its boom trucks for almost twenty years, the appellant was informed by the Registrar of Motor Vehicles that it must instead obtain more expensive class "L" plates. Justice Robertson held that the Registrar's legal interpretation of "special mobile equipment", as a question of law, was owed no deference by the court. Finding that there was "no obvious correlation" between the definition in the MVA and its regulations, he concluded that the simplest approach to resolving the inconsistency was to determine if boom trucks meet the criteria set out in the statutory definition. If so, nothing in the regulations should be able to undermine that conclusion. The MVA specifically refers to "concrete mixers" and "ditch digging apparatus" in its definition of special mobile equipment and Justice Robertson found that boom trucks fall in the same general class as those vehicles. His conclusion was aided by the residual presumption in favour of the taxpayer, which "should not be lost in future cases where the Attorney General is called upon to defend the government’s interpretation of fiscal legislation."
September 22, 2011
Link to Decision
Marc Gibson & Daniel Lo
*
R. v. Kelsy, 2011 ONCA 605
In R. v. Kelsy, the Ontario Court of Appeal considered the the limits of permissible investigative procedures in the course of responding to a 911 call. Rosenberg J.A., writing for the court, held that the police have considerable latitude to secure the scene in such cases, but their actions are still subject to review under s. 8 of the Charter. Specifically, he held that seizure of property may be necessary to stabilize the scene of a 911 response, but any search of that property is still subject to the reasonable necessity requirements of the Waterfield doctrine.
In this case, a 911 call was made after the appellant's boyfriend had been attacked outside his apartment. The appellant and her two-year-old daughter, who had been in the apartment, stepped outside as police searched the premises. They ordered the appellant to drop a knapsack she was carrying while they secured the scene and escorted her and her daughter to safety. A subsequent search of the knapsack revealed a loaded prohibited firearm and a quantity of heroin.
The trial judge found that the search was reasonable by drawing on both doctrines of exigent circumstances and the Waterfield test. However, Justice Rosenberg held that while the two doctrines may be related or even overlap, it is preferable to keep them separate. Although he noted that investigations in response to 911 calls justify significant intrusions into privacy, he held that there was nothing in the circumstances that necessitated a search of the knapsack. The police had grounds to temporarily seize the appellant’s bags, but in this case searching them violated her s. 8 rights. In respect of the s. 24 analysis, Justice Rosenberg agreed with the trial judge’s findings that any breach of the appellant’s rights was not serious and that the police had acted in good faith. Given that “[t]his case is one of first impression and the limits of permissible investigative procedures in the course of responding to a 911 call were not entirely clear”, the police mistake was understandable and the evidence could be admitted.
September 22, 2011
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Tony Drake & Marc Gibson
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In this case, a 911 call was made after the appellant's boyfriend had been attacked outside his apartment. The appellant and her two-year-old daughter, who had been in the apartment, stepped outside as police searched the premises. They ordered the appellant to drop a knapsack she was carrying while they secured the scene and escorted her and her daughter to safety. A subsequent search of the knapsack revealed a loaded prohibited firearm and a quantity of heroin.
The trial judge found that the search was reasonable by drawing on both doctrines of exigent circumstances and the Waterfield test. However, Justice Rosenberg held that while the two doctrines may be related or even overlap, it is preferable to keep them separate. Although he noted that investigations in response to 911 calls justify significant intrusions into privacy, he held that there was nothing in the circumstances that necessitated a search of the knapsack. The police had grounds to temporarily seize the appellant’s bags, but in this case searching them violated her s. 8 rights. In respect of the s. 24 analysis, Justice Rosenberg agreed with the trial judge’s findings that any breach of the appellant’s rights was not serious and that the police had acted in good faith. Given that “[t]his case is one of first impression and the limits of permissible investigative procedures in the course of responding to a 911 call were not entirely clear”, the police mistake was understandable and the evidence could be admitted.
September 22, 2011
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Tony Drake & Marc Gibson
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Yorke v. Yorke, 2011 NBCA 79
In Yorke v. Yorke, Larlee J. decided that, barring explicit legislation, RRSPs are family assets, with the presumption of equal division pursuant to the Marital Property Act.
Mrs. Yorke appealed the trial judge's holding that Mr. Yorke's RRSP was not a marital asset since, like an division-exempted pension, it was acquired before the marriage and not contributed to during the marriage. Distinguishing McQuade v. McQaude, an earlier New Brunswick Court of Appeal case in which RRSPs had been held not subject to equal division, on its facts, Larlee J. relied on a definition in the British Columbia Family Relations Act to find that RRSPs are a family asset. She then drew a further distinction between RRSPs to which there were no contributions were made during the marriage and those used to finance the household. Since Mr. York used the RRSP to finance their lifestyle, Larlee J. held it be a martial asset. He concludes the purpose for which the RRSP is used for is the determining factor.
Larlee J. then applied the three criteria outlined in s. 6 of the Marital Property Act to conclude equal division would not be inequitable, contrary to the lower court's ruling. She also highlighted that there was no agreement between the Yorkes exempting the RRSPs from division and that 16 years of cohabitation along with a 12-year marriage are sufficient to qualify as a long-term marriage. Finally, Mrs. Yorke was seen to have made a substantial contribution, contrary to the trial judge's ruling, despite the fact she did not raise any children, did not contribute financially, and stayed at home. Larlee J. held that the RRSPs should be divided equally.
Richard J., in dissent, argued that the matter of whether marital property should be divided equally should be left to the trial judge's discretion. He argued that as long as the trial judge has applied s. 6 of the Marital Property Act to the facts of the case, appellate courts should defer to the lower court's ruling.
September 22, 2011
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Leo Elias & Adrienne Ho
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Mrs. Yorke appealed the trial judge's holding that Mr. Yorke's RRSP was not a marital asset since, like an division-exempted pension, it was acquired before the marriage and not contributed to during the marriage. Distinguishing McQuade v. McQaude, an earlier New Brunswick Court of Appeal case in which RRSPs had been held not subject to equal division, on its facts, Larlee J. relied on a definition in the British Columbia Family Relations Act to find that RRSPs are a family asset. She then drew a further distinction between RRSPs to which there were no contributions were made during the marriage and those used to finance the household. Since Mr. York used the RRSP to finance their lifestyle, Larlee J. held it be a martial asset. He concludes the purpose for which the RRSP is used for is the determining factor.
Larlee J. then applied the three criteria outlined in s. 6 of the Marital Property Act to conclude equal division would not be inequitable, contrary to the lower court's ruling. She also highlighted that there was no agreement between the Yorkes exempting the RRSPs from division and that 16 years of cohabitation along with a 12-year marriage are sufficient to qualify as a long-term marriage. Finally, Mrs. Yorke was seen to have made a substantial contribution, contrary to the trial judge's ruling, despite the fact she did not raise any children, did not contribute financially, and stayed at home. Larlee J. held that the RRSPs should be divided equally.
Richard J., in dissent, argued that the matter of whether marital property should be divided equally should be left to the trial judge's discretion. He argued that as long as the trial judge has applied s. 6 of the Marital Property Act to the facts of the case, appellate courts should defer to the lower court's ruling.
September 22, 2011
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Leo Elias & Adrienne Ho
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Wednesday, September 21, 2011
DJO Canada Inc v. Schroeder, 2011 SKCA 106
The Saskatchewan Court of Appeal determined that the warranties described in s.48 of the Saskatchewan Consumer Protection Act (the “CPA”) can only be deemed to have been given by a manufacturer when a consumer product is “sold by a retail seller.” Section 50(2) of the CPA deems certain warranties described in s.48 to have been given by manufacturers. The court held that s.50(2) is not a freestanding provision and does not independently impose warranty obligations. Accordingly, the requirement in s.48 that a product be sold by a retail seller also applies to warranties deemed to be given by manufacturers under s.50(2).
Schroeder et al alleged that the manufacturers of pain pumps breached their statutory warranties under the CPA. The pain pumps were sold to the patients by a hospital. The court determined that in order to take advantage of the warranties described in s.48 the pain pumps had to have been sold by a retail seller. The wording of s.48 “clearly indicates that the warranties described therein are considered to be given by a retail seller only when a consumer product is ‘sold by a retail seller.’” Further, the court held that s.50(2), which deems certain of the s.48 warranties to have been given by manufacturers, is not a freestanding provision and cannot independently impose warranty obligations. It follows that there can be no manufacturer’s warranty if there is no retail seller’s warranty. As a retail seller is necessary for the existence of a retail seller’s warranty, Schroeder et al will have to show at trial that the hospital was a “retail seller.”
According to the court, the use of the term “consumer” in s.50(2), and the expansion of the definition of “retail seller” in s.50(1), confirms their interpretation of the CPA. This is because a “consumer” is defined in the CPA as someone who buys a consumer product “from a retail seller.” It is also because the expansion of the definition of “retail seller” per s.50(1) would not be necessary if s.50(2) was intended to independently impose warranty obligations on manufacturers.
Finally, the court determined that s. 64 of the CPA, which describes those who are entitled to recover damages for a breach of warranty, does not create warranties or warranty obligations. The section only specifies who can claim damages if there is a breach.
September 21, 2011
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Kaitlind de Jong & Steve Holinski
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Schroeder et al alleged that the manufacturers of pain pumps breached their statutory warranties under the CPA. The pain pumps were sold to the patients by a hospital. The court determined that in order to take advantage of the warranties described in s.48 the pain pumps had to have been sold by a retail seller. The wording of s.48 “clearly indicates that the warranties described therein are considered to be given by a retail seller only when a consumer product is ‘sold by a retail seller.’” Further, the court held that s.50(2), which deems certain of the s.48 warranties to have been given by manufacturers, is not a freestanding provision and cannot independently impose warranty obligations. It follows that there can be no manufacturer’s warranty if there is no retail seller’s warranty. As a retail seller is necessary for the existence of a retail seller’s warranty, Schroeder et al will have to show at trial that the hospital was a “retail seller.”
According to the court, the use of the term “consumer” in s.50(2), and the expansion of the definition of “retail seller” in s.50(1), confirms their interpretation of the CPA. This is because a “consumer” is defined in the CPA as someone who buys a consumer product “from a retail seller.” It is also because the expansion of the definition of “retail seller” per s.50(1) would not be necessary if s.50(2) was intended to independently impose warranty obligations on manufacturers.
Finally, the court determined that s. 64 of the CPA, which describes those who are entitled to recover damages for a breach of warranty, does not create warranties or warranty obligations. The section only specifies who can claim damages if there is a breach.
September 21, 2011
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Kaitlind de Jong & Steve Holinski
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Monday, September 19, 2011
The Sovereign General Insurance Company v. Walker, 2011 ONCA 597
In Sovereign, Justice Laskin of the Ontario Court of Appeal, writing for the majority, ruled that a third party with sufficient proximity to an insurance claim may give notice of that claim to trigger liability coverage.
Mrs. Walker slipped in a parking lot and sustained serious injuries. She sued both Emshih, the owner of the mall, and Sun Shelters, the maintenance company that was hired to remove the ice and snow from the parking lot, for damages. Emshih and Walker settled but Sun Shelters went bankrupt and did not defend the claim or notify Sovereign, its insurance company, of the claim. Counsel for Emshih, carrying out a cross-claim, forwarded all the pleadings to Sovereign upon hearing that Sun Shelters was insured. The Walkers received a judgment against Sun Shelters, upon which they then brought an action against Sovereign under s. 132(1) of the Insurance Act, which allows a third party to recover against an insurer where its insured has failed to satisfy a judgment for damages. Sovereign argued it was not obligated to indemnify Sun Shelters’ claim as it could only receive notice of the claim through its insured and Sun Shelters failed to notify them.
Justice Laskin noted that s. 3(a) of the insurance policy stated that notice can be given “by or for the insured”, which on plain reading allowed for notice from others than the insured. At a minimum, the meaning was ambiguous and according to the rules of statutory interpretation, it should be interpreted against Sovereign. Rejecting Sovereign’s “rigid” interpretation, Justice Laskin also found that the purpose of the provision was to make the insurer aware of the claim so that it had a timely opportunity to deal with it. Therefore, notice could clearly be given by a person with sufficient proximity to the claim.
September 19, 2011
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Leo Elias & Sam Golder
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Mrs. Walker slipped in a parking lot and sustained serious injuries. She sued both Emshih, the owner of the mall, and Sun Shelters, the maintenance company that was hired to remove the ice and snow from the parking lot, for damages. Emshih and Walker settled but Sun Shelters went bankrupt and did not defend the claim or notify Sovereign, its insurance company, of the claim. Counsel for Emshih, carrying out a cross-claim, forwarded all the pleadings to Sovereign upon hearing that Sun Shelters was insured. The Walkers received a judgment against Sun Shelters, upon which they then brought an action against Sovereign under s. 132(1) of the Insurance Act, which allows a third party to recover against an insurer where its insured has failed to satisfy a judgment for damages. Sovereign argued it was not obligated to indemnify Sun Shelters’ claim as it could only receive notice of the claim through its insured and Sun Shelters failed to notify them.
Justice Laskin noted that s. 3(a) of the insurance policy stated that notice can be given “by or for the insured”, which on plain reading allowed for notice from others than the insured. At a minimum, the meaning was ambiguous and according to the rules of statutory interpretation, it should be interpreted against Sovereign. Rejecting Sovereign’s “rigid” interpretation, Justice Laskin also found that the purpose of the provision was to make the insurer aware of the claim so that it had a timely opportunity to deal with it. Therefore, notice could clearly be given by a person with sufficient proximity to the claim.
September 19, 2011
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Leo Elias & Sam Golder
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Wednesday, September 14, 2011
Gosse v. Sorensen-Gosse, 2011 NLCA 58
In Gosse v. Sorensen-Gosse, the Newfoundland and Labrador Court of Appeal held that sections 14, 15, and 26 of the Family Law Act ("FLA") must be exercised in a manner consistent with each spouse’s equal interest in the matrimonial home. The Court also held that corporate income could be attributed to a sole shareholder where that shareholder had complete discretionary control of the corporation’s income.
In the case, the Court held that, where an occupying spouse was given the opportunity to buy out a non-occupying spouse’s interest in the matrimonial home, the payment to the non-occupying spouse should reflect as equal an increase in the value of the matrimonial home as circumstances allow. Consequently, the Unified Family Court’s Judge’s ruling, which accounted for increases only until the date of trial and not until the date of the buying out of the non-occupying spouse’s interest, was quashed.
In dividing the monthly rental value of the matrimonial home, Wells, J.A. warned that the discretion to award occupational rent or a comparable offsetting payment is more narrow than suggested in Harvey v. Harvey, and some compensation to the non-occupying spouse will usually be required to conform with the objectives of FLA section 5(b). Since expert evidence concerning the value of monthly rental of the matrimonial home was in conflict, the Court awarded the median of the conflicting amounts.
Wells, J.A. finally analyzed sections 17 and 18 of the Child Support Guidelines (which allow a corporation’s income to be imputed to a shareholder in determining what funds that shareholder has available for the purposes of child support payments). In determining what funds the Respondent had available for the purpose of paying child support obligations, Wells, J.A. noted that the Respondent was the sole shareholder of the Corporation, the Respondent had discretionary control over 100% of the Corporation’s income, and the Corporation had paid 75% of the Respondent’s legal fees in previous proceedings. As such, the Court attributed 85% of the Corporation’s pre-tax income to the Respondent.
September 14, 2011
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Liam Oster
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In the case, the Court held that, where an occupying spouse was given the opportunity to buy out a non-occupying spouse’s interest in the matrimonial home, the payment to the non-occupying spouse should reflect as equal an increase in the value of the matrimonial home as circumstances allow. Consequently, the Unified Family Court’s Judge’s ruling, which accounted for increases only until the date of trial and not until the date of the buying out of the non-occupying spouse’s interest, was quashed.
In dividing the monthly rental value of the matrimonial home, Wells, J.A. warned that the discretion to award occupational rent or a comparable offsetting payment is more narrow than suggested in Harvey v. Harvey, and some compensation to the non-occupying spouse will usually be required to conform with the objectives of FLA section 5(b). Since expert evidence concerning the value of monthly rental of the matrimonial home was in conflict, the Court awarded the median of the conflicting amounts.
Wells, J.A. finally analyzed sections 17 and 18 of the Child Support Guidelines (which allow a corporation’s income to be imputed to a shareholder in determining what funds that shareholder has available for the purposes of child support payments). In determining what funds the Respondent had available for the purpose of paying child support obligations, Wells, J.A. noted that the Respondent was the sole shareholder of the Corporation, the Respondent had discretionary control over 100% of the Corporation’s income, and the Corporation had paid 75% of the Respondent’s legal fees in previous proceedings. As such, the Court attributed 85% of the Corporation’s pre-tax income to the Respondent.
September 14, 2011
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Liam Oster
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Tuesday, September 13, 2011
Davies v. Collins, 2011 NSCA 79
In this case, the Nova Scotia Court of Appeal held that recognition of a Trinidadian marriage in extremis as a valid marriage under the Nova Scotia Wills Act did not require the Court to also apply, under the principle of comity, the entire Trinidadian law governing such marriages. Therefore, the Court held that such marriages can revoke a prior will, in accordance with the Wills Act, even though Trinidadian law would produce the opposite outcome.
In 1989, the appellant's ex-husband, Dr. Davies, executed a will naming her the principle beneficiary and executrix. Following their divorce, Dr. Davies began a relationship with the respondent, and the two entered into a marriage in extremis in Trinidad and Tobago in July 2007. The trial judge found that the marriage between Dr. Davies and Ms. Collins in Trinidad, although its form was not recognized in Nova Scotia, constituted a marriage within the meaning laid out in s. 17 of the Wills Act. Then, the trial judge applied Nova Scotia law to determine that the marriage revoked the original will.
The appellant argued that Trinidadian law should have been applied to the case as a whole. Noting that comity is not a term of art in the conflict of laws, but rather a principle of international law requiring that states respect one another's legal actions, the Court rejected the appellant's argument. Recognizing the marriage in extremis as a valid marriage under Nova Scotia law did not necessitate applying provisions of Trinidadian law that contradicted Nova Scotia law. The Court also noted that Mr. Davies' presumed intention in drafting the will was that it be governed by Nova Scotia law.
September 13, 2011
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Sierra Robart & Kai Sheffield
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In 1989, the appellant's ex-husband, Dr. Davies, executed a will naming her the principle beneficiary and executrix. Following their divorce, Dr. Davies began a relationship with the respondent, and the two entered into a marriage in extremis in Trinidad and Tobago in July 2007. The trial judge found that the marriage between Dr. Davies and Ms. Collins in Trinidad, although its form was not recognized in Nova Scotia, constituted a marriage within the meaning laid out in s. 17 of the Wills Act. Then, the trial judge applied Nova Scotia law to determine that the marriage revoked the original will.
The appellant argued that Trinidadian law should have been applied to the case as a whole. Noting that comity is not a term of art in the conflict of laws, but rather a principle of international law requiring that states respect one another's legal actions, the Court rejected the appellant's argument. Recognizing the marriage in extremis as a valid marriage under Nova Scotia law did not necessitate applying provisions of Trinidadian law that contradicted Nova Scotia law. The Court also noted that Mr. Davies' presumed intention in drafting the will was that it be governed by Nova Scotia law.
September 13, 2011
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Sierra Robart & Kai Sheffield
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Thursday, September 8, 2011
Ladner v. Wolfson, 2011 BCCA 370
The British Columbia Court of Appeal held that the test for the imposition of a good conscience trust, as articulated in Soulos v. Korkontzilas, requires a direct proprietary nexus between the contributions said to give rise to the trust and the property over which the trust is claimed. Madam Justice Garson held that while Soulos may be authority for the imposition of a good conscience trust irrespective of a finding of unjust enrichment, this does not mean that the imposition of a good conscience trust no longer requires a proprietary connection.
The respondent wished to claim a constructive trust over life insurance proceeds payable to her deceased husband’s estate. The Court of Appeal found that the conditions required for the imposition of the good conscience trust, as articulated in Soulos, had not been met. According to Justice Garson, Soulos is authority for the proposition that a finding of unjust enrichment is not essential for the imposition of a constructive trust. However, a connection between the defendant’s duty-breaching activities and the property to which a trust is claimed is required. The trial judge found that the life insurance policies that the respondent claimed a constructive trust over were not the ones contemplated by the separation agreement. Accordingly, the necessary proprietary connection between the wrongful act and the insurance policies was not present.
Finally, Roberts v. Martindale was considered as allowing for a possible relaxation of the Soulos conditions. The court chose to distinguish Roberts on the basis that unlike in Roberts, Mr. Ladner’s estate was not receiving property to which it was not entitled, and accordingly was not being unjustly enriched. Further, Roberts is a case where a clear proprietary nexus was present.
September 8, 2011
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Steve Holinski & Kelly Ng
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The respondent wished to claim a constructive trust over life insurance proceeds payable to her deceased husband’s estate. The Court of Appeal found that the conditions required for the imposition of the good conscience trust, as articulated in Soulos, had not been met. According to Justice Garson, Soulos is authority for the proposition that a finding of unjust enrichment is not essential for the imposition of a constructive trust. However, a connection between the defendant’s duty-breaching activities and the property to which a trust is claimed is required. The trial judge found that the life insurance policies that the respondent claimed a constructive trust over were not the ones contemplated by the separation agreement. Accordingly, the necessary proprietary connection between the wrongful act and the insurance policies was not present.
Finally, Roberts v. Martindale was considered as allowing for a possible relaxation of the Soulos conditions. The court chose to distinguish Roberts on the basis that unlike in Roberts, Mr. Ladner’s estate was not receiving property to which it was not entitled, and accordingly was not being unjustly enriched. Further, Roberts is a case where a clear proprietary nexus was present.
September 8, 2011
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Steve Holinski & Kelly Ng
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Wednesday, September 7, 2011
Petrelli v. Lindell Beach Holiday Resort Ltd., 2011 BCCA 367
In Petrelli v. Lindell Beach Holiday Resort Ltd., the court held that pleadings from another, similar, action are not properly the subject of “judicial notice” as the concept is strictly understood. While a judge may be entitled to take notice of records not directly before her, and may be entitled to use them as evidence, she should not normally do so without advising the parties, thus giving them an opportunity to address the issue raised.
The Petrellis had brought an action for the rescission of their contract with the appellant trail park operator. Previously, the Petrellis' friends, the Bahrys, were successful in a claim for the rescission of their contract with the appellant. The Bahrys had brought their claim under highly similar circumstances and on the same grounds as the Petrellis were now claiming. Accordingly, the Petrellis argued that their contract had already been interpreted by the court and that it was an abuse of process to defend the current action. The appellant owners argued that there was no basis for a finding that their defence had already been raised, argued, and determined in the Bahry case. Accordingly, the appellants asked the Court to take judicial notice of the Bahry pleadings. Justice Groberman found that the Bahry pleadings had not become evidence in the court below: neither party had drawn the judge’s attention to them, nor did the judge indicate an intention to examine them. Since no formal or informal step had been taken to include the Bahry pleadings in evidence, the court could not now take “judicial notice” of them. According to Justice Groberman, judicial notice covers matters of general knowledge, or matters that are easily ascertainable by anyone through widely available, accurate, sources. When judicial notice is taken of such facts no one is taken by surprise. Further, such facts cannot be practically challenged. Justice Groberman went on to hold that the contents of court records are not matters of general knowledge and there are limits on the court taking “judicial notice” of its records. A judge may consult court records that are not directly before her and rely on them as evidence. However, she should not normally do so without first advising the parties and giving them a chance to address the issue raised.
While the court refused to take judicial notice of the Bahry pleadings, they were nonetheless allowed to be adduced as fresh evidence on appeal. The court went on to hold that the appellants’ raising of the non-conforming use defence did not constitute an abuse of process. According to Justice Groberman, the focus of the doctrine of abuse of process is on the integrity of the adjudicative functions of the court. The re-litigation of issues is an inefficient use of judicial resources, and the possibility of inconsistent judgements diminishes the credibility of court judgements. According to the Court, both cause of action estoppel and issue estoppel, the two branches of res judicata, are concerned with preventing abuse of process. While cause of action estoppel is focussed primarily on fairness to litigants, issue estoppel is primarily concerned with the integrity of the judicial system. However, the court held that there may be some overlap between the two concerns.
September 7, 2011
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Fidelia Ho & Steve Holinski
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The Petrellis had brought an action for the rescission of their contract with the appellant trail park operator. Previously, the Petrellis' friends, the Bahrys, were successful in a claim for the rescission of their contract with the appellant. The Bahrys had brought their claim under highly similar circumstances and on the same grounds as the Petrellis were now claiming. Accordingly, the Petrellis argued that their contract had already been interpreted by the court and that it was an abuse of process to defend the current action. The appellant owners argued that there was no basis for a finding that their defence had already been raised, argued, and determined in the Bahry case. Accordingly, the appellants asked the Court to take judicial notice of the Bahry pleadings. Justice Groberman found that the Bahry pleadings had not become evidence in the court below: neither party had drawn the judge’s attention to them, nor did the judge indicate an intention to examine them. Since no formal or informal step had been taken to include the Bahry pleadings in evidence, the court could not now take “judicial notice” of them. According to Justice Groberman, judicial notice covers matters of general knowledge, or matters that are easily ascertainable by anyone through widely available, accurate, sources. When judicial notice is taken of such facts no one is taken by surprise. Further, such facts cannot be practically challenged. Justice Groberman went on to hold that the contents of court records are not matters of general knowledge and there are limits on the court taking “judicial notice” of its records. A judge may consult court records that are not directly before her and rely on them as evidence. However, she should not normally do so without first advising the parties and giving them a chance to address the issue raised.
While the court refused to take judicial notice of the Bahry pleadings, they were nonetheless allowed to be adduced as fresh evidence on appeal. The court went on to hold that the appellants’ raising of the non-conforming use defence did not constitute an abuse of process. According to Justice Groberman, the focus of the doctrine of abuse of process is on the integrity of the adjudicative functions of the court. The re-litigation of issues is an inefficient use of judicial resources, and the possibility of inconsistent judgements diminishes the credibility of court judgements. According to the Court, both cause of action estoppel and issue estoppel, the two branches of res judicata, are concerned with preventing abuse of process. While cause of action estoppel is focussed primarily on fairness to litigants, issue estoppel is primarily concerned with the integrity of the judicial system. However, the court held that there may be some overlap between the two concerns.
September 7, 2011
Link to Decision
Fidelia Ho & Steve Holinski
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