THE LAWYERS WEEKLY
September 30, 2011 | 17
DIGEST
OF RECENT DECISIONS FROM CANADA’S COURTS
Michael Hamilton, LL.B. E-mail: jandm@hfx.eastlink.ca
APPEALS
LEAVE TO APPEAL – Proposed
appeal by Crown from acquittal of
accused raised valid questions of statutory interpretation and was of importance to the public generally.
Application by the Crown for leave to
appeal from a summary conviction appeal
judge’s decision to uphold the acquittal of
three accused on charges under the Income
Tax Act and the Excise Tax Act. All three
accused were charged with making false or
deceptive statements in returns; destruction, alteration or secretion of records to
evade taxes; and tax evasion. The charges
were laid following examinations by Canada Revenue Agency (CRA) officers of the
records and tax returns of N Ltd., a company through which the three accused
operated a restaurant. Business records of
the restaurant and similarly-sized businesses in other locations across Canada
were seized, copied and reviewed by the
CRA as part of a pilot project. The present
criminal charges resulted. The trial judge
held that the seizure of the records pursuant to the survey pilot project was unlawful
and violated the rights of accused to protection against unreasonable search and seizure. Accused were acquitted after the judge
excluded the evidence as a remedy for the
rights violations. The appeal judge upheld
the trial decision.
HELD: Application allowed. The Crown
sought to argue that, on a plain reading of
the Income Tax Act, the CRA was authorized to inspect, audit or examine books or
records for the administration and enforcement of the Act, including any documents
that could assist in ascertaining the information that was or should be in the books
and records of the taxpayer. It took the
position that the taxpayer’s record keeping
duties and the CRA’s authority to examine
books and records should have been read
together. That argument raised valid questions of statutory interpretation and
whether the appeal judge was correct in
applying certain jurisprudence to the facts.
The proposed appeal was of importance to
the public generally.
R. v. He, [2011] B.C.J. No. 1629,
B.C.C.A., Rowles J.A., Aug. 29/11. Digest
No. 3120-001 (Approx. 7 pp.)
BUILDING CONTRACTS
PAYMENT – Plaintiff unable to col-
lect amount of unpaid invoice from
defendant, who was the project manager
for a subdivision development.
Action by plaintiff for damages to com-
pensate for an unpaid invoice. Plaintiff
provided work and materials for a commer-
cial and residential subdivision develop-
ment at an agreed price of $23,000. The
work was provided for the benefit of the
developer, L Corp. Defendant was the pro-
ject manager. The parties and the owner of
L Corp. were all present at the meeting to
discuss the work required from plaintiff.
Plaintiff submitted a faxed proposal after
communications with defendant. The work
was subsequently completed and plaintiff
submitted an invoice for $27,097, which
included agreed-upon extras. The invoice
remained unpaid. Plaintiff submitted that
defendant was liable on the basis of an
enforceable contract between the parties.
Defendant submitted that plaintiff knew at
all times that it was an agent for the
developer and was not party to the contract.
CIVIL PROCEDURE
ADDITION OF PARTY – Plaintiff
granted leave to add a defendant.
Motion for an order granting plaintiff
leave to amend the statement of claim to
add a defendant. On Dec. 28, 2008 plaintiff
was using the washroom at defendant KB,
a bingo hall, when she slipped and fell on
an accumulation of water on the floor. Her
lawyer wrote to KB in February 2009 advising they had been retained. KB’s insurer
responded in June 2009. In September
2009 plaintiff’s lawyer emailed the insurer
asking for the name of any independent
third party contractor responsible for cleaning the washroom but received no response.
Defendant’s lawyer advised in January 2011
that BN was an independent third party
cleaning contractor. Plaintiff then brought
the motion.
HELD: Motion granted. This was an
appropriate case in which to grant leave to
plaintiff to add BN as a party defendant.
Plaintiff did not have prior knowledge of
the existence of the independent third party
cleaning contractor. All she knew was that
someone was responsible for cleaning the
washrooms. Plaintiff’s lawyer asked the
insurer whether there was an outside cleaning contractor but received no reply. A
plaintiff was not required to carry out an
investigation in circumstances where she
had no information that such a potential
tortfeasor even existed.
Barker v. Kennedy Bingo, [2011] O.J.
No. 3826, Ont. S.C.J., Muir (Master),
Aug. 25/11. Digest No. 3120-003
(Approx. 6 pp.)
COSTS – Appellate court set aside
costs awarded at trial and ordered that
no costs be awarded.
Appeal from a decision confirming the
trial judgment. Appellant contracted with
respondent for the expansion of the park-
ing lot on respondent’s property. Respond-
ent failed to pay the second installment
when due and appellant abandoned the
job. Appellant filed a lien for the unpaid
balance of the contract and commenced the
present action for payment of the moneys
owing. The trial judge found respondent
had breached the contract and dismissed
the counterclaim for failure to complete.
The judge awarded appellant the value of
the work performed less the first install-
ment paid. The judge found, however, that
appellant filed a grossly excessive lien and
awarded respondent its borrowing cost to
vacate the lien. The judge also awarded the
respondent $55,000 for its costs of the
action, due to respondent’s offer to settle.
PRIVILEGE – Plaintiff entitled to
refer in his reply to an offer made by
defendants because it was not a without
prejudice compromise offer.
Appeal from a master’s decision dismissing defendants’ motion to strike a paragraph in plaintiff’s reply. Defendants were
guarantors of two promissory notes in
default. Plaintiff contacted defendants
when the default was discovered and heard
nothing until they received a package
promising immediate payment upon execution of documents. The offer proposed
that plaintiff accept $89,700 and $79,625
as full payment on $276,000 and $245,000
promissory notes, and assign their interest
in the notes to a numbered company that
would act as the nominee and trustee in
contemplated Companies’ Creditors
Arrangement Act (CCAA) proceedings.
Instead, plaintiff demanded immediate
payment and then commenced an action
for the full amount owing. Defendants
admitted to the guarantees but denied liability on the basis the limitations period
had expired. In reply, plaintiff referred to
the offer as an acknowledgement of liability. Defendants argued the reply was prejudicial because the offer was a privileged and
inadmissible offer to settle. The master
found the offer did not meet the preconditions of privilege.
HELD: Appeal dismissed. In the cir-
cumstances, this was not a simple without
prejudice compromise offer. The offer was
a sophisticated business proposal made in
anticipation of CCAA proceedings which
would have the effect of settling the claims
against defendants. The offer was made
by the numbered company, not defend-
ants. The parties were not yet engaged in
litigation, the offer was not a compromise
and the documents were not marked
“without prejudice.” The master reached
the correct conclusion.
STANDING – Applicant university
professor did not have public interest
standing to challenge decision by univer-
sity to grant PhD to student.
Motion for an order striking a notice of
application. Applicant had been an assistant professor at respondent university since
2006. Respondent D was Dean of Graduate
Studies. Z was a graduate student, for
whom certain accommodations were made
pursuant to the university’s disability policies, allowing Z to complete a doctorate. Z
was awarded a PhD in Mathematics. Applicant took exception to the awarding of the
degree and the process followed. He took
the position the extent to which D and the
university accommodated Z undermined
the academic integrity and standards of the
PhD program and the university as a whole.
He sought various declarations and orders,
including an order that Z did not fulfill the
requirements of a PhD degree. Z was not a
student of applicant and applicant was not
on the committee responsible for considering his requests for accommodation at
the time such requests were made. Those
decisions were made by D as dean.
HELD: Motion allowed. Applicant
failed to identify any direct, legitimate personal or private interest that would grant
him private interest standing to bring his
application. He did not teach Z, was only
laterally a member of the committee, did
not hold a degree from the university and
did not represent the university in any official capacity. He also failed to demonstrate
any damages. Applicant’s conscience did
not provide grounds for a legal proceeding.
Lukács v. Doering, [2011] M.J. No.
264, Man. Q. B., McCawley J., Aug. 25/11.
Digest No. 3120-006 (Approx. 10 pp.)
STRIKING OUT PLEADINGS –
Court refused to strike notice of civil
claim against applicant by director of
civil forfeiture.
Application for an order striking
respondent director’s notice of civil claim as
an abuse of process. Applicant was the
registered owner of a parcel of land, which
included an outbuilding that contained
hundreds of marijuana plants and marijuana cultivation, production and trafficking paraphernalia. RCMP officers walked
on applicant’s land, without his knowledge
or consent, to gain a better view of the outbuilding. As a result of those observations
the officers formed their belief that there
was marijuana plant material in the outbuilding. A justice of the peace issued a warrant authorizing entry into, and search of,
the outbuildings. Despite the restricted
term of the warrant, one of the officers
entered the residence. Others entered and
