Editor’s Note: This post was written as a preview of an upcoming Supreme Court of Canada decision for the Fantasy Courts website and newsletter.

Hi, here’s what you need to know about the Supreme Court of Canada this week in 8 minutes.

Latest News

  1. 🥇 That’s a wrap. Below is a full recap and list of winners for Season 10. We’ll start a fresh season in September when the Court returns to releasing decisions again more regularly.
  2. 💰 The SCC will release its decision in two tax law appeals on Friday, June 28, 2024: Iris Technologies Inc. v. Canada and Dow Chemical Canada ULC v. The King. At issue is the tax court’s jurisdiction to review a discretionary decision of the Minister of National Revenue.
  3. 🍎 On June 21, the SCC released its decision in York Region District School Board v. Elementary Teachers’ Federation of Ontario, 2024 SCC 22. The Court unanimously dismissed the appeal, ruling that an Ontario public school board is inherently governmental for the purposes of s. 32 of the Charter and its teachers are protected by s. 8.
  4. 🔮 83% of players correctly predicted the outcome of the decision.

You can still head over to Fantasy Courts to lock in your predictions for this week’s decision, but we’ll reset the streaks after the summer.

Winners & Recap of Season 10

Season 10 saw us predict 24 appeals from January to June. A few of those were grouped together, but it was still a very active period compared to the ten appeals we predicted in the second half of 2023. Let’s break down those 24 appeals:

  • 11 were allowed, while 13 were dismissed.
  • As some of the appeals were dealt with together, there were 18 decisions in total.
  • Of those 18, ten were unanimous decisions. On the eight split decisions, only Justice Kasirer was never in dissent.
  • Note: There are always several criminal appeals decided from the bench that aren’t available to predict and not included in this recap.

In terms of predictions, players were correct on average 71% of the time. The toughest appeals with the worst results were:

  • Yatar v. TD Insurance Meloche Monnex, 2024 SCC 8 (9:0) with only 12% getting it right
  • R. v. Bykovets, 2024 SCC 6 (5:4) with only 17% right
  • R. v. Lozada, 2024 SCC 18 (3:2) with only 19% right

These tricky decisions were spread out across the season meaning it was tough for all players to string together lengthy prediction streaks. It was a close field, but one player, Ben Sttor, managed to come out ahead with 10 right in a row. Behind him, we had a four-way tie with players with nine right in a row: Wendy, Jim Smith, Scott McAnsh and Adil Abdulla. Adil also ends the season with the longest currently intact streak.

As usual, gift cards but, more importantly, bragging rights for the winners. Thanks again for playing!

Case to Predict: Tax Court Jurisdiction

Appeal by leave from Canada v. Dow Chemical Canada ULC, 2022 FCA 70 and Canada (Attorney General) v. Iris Technologies Inc., 2022 FCA 101

SCC factums (Dow & Iris) and webcast

What Happened in Dow?

Background: Dow requested that the Minister exercise her discretionary power under s. 247(10) of the Income Tax Act to adjust the value of a non-arm’s length transaction which would reduce a tax assessment. The Minister declined.

Tax Court: It was unclear whether the Tax Court or Federal Court had jurisdiction to hear a challenge of the Minister’s decision. The Tax Court judge determined that it had exclusive jurisdiction to review the Minister’s decision, which directly affected the computation of income, and was therefore part of the assessment. Appeals of assessments are within the Tax Court’s jurisdiction.

Appeal: The Federal Court of Appeal reached the opposite conclusion and allowed the Crown’s appeal. The decision is part of the process of the assessment, and the Tax Court only has the power to hear appeals of the product of that process. Furthermore, correcting an error in the Minister’s decision requires the power to quash or issue an order of mandamus, and the Tax Court does not have those powers.

What Happened in Iris?

Background: CRA completed an audit of monthly GST/HST returns of Iris Technologies Inc. Two days later, it commenced a second audit. The Minister of National Revenue withheld GST/HST refunds for the reporting periods under examination in the second audit and denied Iris’s requests to have those funds released.

Judicial Review & Motion to Dismiss: Iris applied to the Federal Court for judicial review seeking to compel the release of the refunds and seeking declarations that it was denied procedural fairness, that the Minister failed to follow policy with respect to the administration of the Excise Tax Act, that there was no evidentiary foundation upon which an assessment could be issued, and that the assessments were issued for an improper purpose. The Attorney General filed a motion to dismiss Iris’s application for judicial review. The Case Management Judge dismissed the motion. The Federal Court dismissed an appeal.

Appeal: The Federal Court of Appeal allowed an appeal and dismissed Iris’s application for judicial review. The application was a collateral challenge to the validity of the assessments, a matter within the exclusive jurisdiction of the Tax Court of Canada.

What Was Argued at the SCC?

Appellants: Dow argued that the Income Tax Act contemplates the Tax Court having a broad jurisdiction that includes a comprehensive objection and appeal regime. Limits to this jurisdiction are judge-made and inconsistent with the legislation.

Iris argued that the Tax Court and Federal Courts have consistently held that the Tax Court does not have jurisdiction to grant relief on the basis of reprehensible conduct by the Minister leading up to the assessment disputed in that Court, including abuse of power or unfairness. Accordingly, oversight of the Minister’s conduct must fall within the Federal Court’s broad jurisdiction.

Respondent: In response to Dow, Canada argued that the Federal Court and Tax Court are creatures of statute. The Income Tax Act does not expressly provide for an appeal to the Tax Court from the Minister’s discretionary decision. Only the Federal Court can grant relief here. Parliament did not create the Tax Court as a “one stop shop” where all matters connected with taxation could be adjudicated.

In response to Iris, Canada argued that judicial review applications that are doomed to fail must be struck. The Federal Court’s jurisdiction is restricted in this case because an appeal to the Tax Court is an adequate, curative remedy for the alleged procedural and evidentiary failures of the Minister.

What Else Should You Know Before Making a Prediction?

Before being appointed to the SCC, Justice Côté had her own tax battles over expenses she claimed as a corporate litigator. I could see her having some sympathy for the appellants here and insight into the difficulties faced by those challenging the Minister’s exercise of discretion. The easy way out for the Court here would be to defer to Parliament as the one to fix any jurisdictional shortcomings in the legislation. However, the panel seemed receptive to Dow’s arguments about recognizing the Tax Court’s broad jurisdiction but showed some reserve with respect to Iris’s approach of seeking declaratory relief in Federal Court. With two appeals that could go different ways involving a complex area law, this is not easy to predict.

Previous Prediction: Schools & The Charter

On June 21, 2024, the SCC released its decision in York Region District School Board v. Elementary Teachers’ Federation of Ontario, 2024 SCC 22

Held (9:0): Appeal dismissed. Ontario public school board teachers are protected by s. 8 of the Charter in the workplace. The arbitrator didn’t properly consider s. 8 and her decision should be set aside.

Key Points:

  • All actions carried on by Ontario public school boards are subject to Charter scrutiny.
  • The arbitrator here had the power to decide questions of law, and was therefore required to decide the grievance consistent with the requirements of s. 8 of the Charter.
  • When a Charter right applies, it is not sufficient that an arbitrator made some references to the Charter jurisprudence. There must be clear acknowledgment of and analysis of that right.
  • Where a court reviews a decision of an administrative tribunal, the standard of review must be determined on the basis of administrative law principles pursuant to Vavilov. Correctness applies because the issue on judicial review is a constitutional question that requires a final and determinate answer from the courts and therefore falls within the rule of law exception.

Predictions: 83% of players correctly predicted that the appeal would be dismissed.

-Tom Slade

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