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Trees, Tenures and Taxes: SCC
Justice Rothstein begins his decision in Daishowa-Marubeni International Ltd. v. Canada, 2013 SCC 29 by asking the age old question: "If a tree falls in the forest and you are not around to replant it, how does it affect your taxes?" The short answer is that a seller of Alberta forest tenures is not required to include in its proceeds of disposition an estimate of the costs of the reforest obligations assumed by the purchaser. The decision turned on the fact that the obligation to reforest harvested areas is a future expense that is embedded in the tenure. As such, said the court, "the obligation serves to depress the value of the forest tenure. It is not a separate existing debt of the vendor that is assumed by the purchaser as part of the sale price of the forest tenure." The decision may affect other industries facing reclamation or land rehabilitation costs, as noted in these commentaries on the case:
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A Cautionary Tale for Spousal Guarantors: ONCA
In Royal Bank of Canada v. Samson Management & Solutions Ltd., 2013 ONCA 313, 2013 ONCA 313, the Ontario Court of Appeal overturned a lower court ruling that RBC could not enforce a continuing "all accounts" guarantee where material changes had been made to the underlying loan agreement without notice to or consent of the guarantor/wife. The Court of Appeal enforced the guarantee, finding that there was nothing in the language of the "plain-vanilla standard form bank guarantee" or the factual context to justify not enforcing the clear and unambiguous terms (paras. 64-65).
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Access to Corporate Financial and Accounting Records: MBQB
The court dismissed an appeal from an arbitrator's "interlocutory" order to produce the financial records of a corporation involved in a shareholder oppression dispute in Mathieu et al v. J.R.Stephenson Mfg. Ltd. et al, 2013 MBQB 64. The court found it had no jurisdiction to hear the appeal since the arbitrator's decision was a procedural order and not an award within the meaning of s.41 of The Arbitration Act. In addition, the court found that ss. 20(3) and 153(2) of The Corporations Act provided the applicants (who were both shareholders and directors) with lawful authority to access the financial statements and accounting records they sought, independent of the arbitration process.
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PIPEDA Report
In her final report as Privacy Commissioner Jennifer Stoddart stresses the significance of online reputation management and business accountability in the digital age. The 2012 annual report on the Personal Information Protection and Electronic Documents Act was released June 6, 2013. In the chapter on Business Accountability, the author notes the need for organizations to develop tailor-made programs to manage and protect personal information under their control and references an earlier report on how to do this.
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Business Publications
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The June 2013 edition of Eco-Bulletin, the National Environmental, Energy and Resources section newsletter, contains articles on regulating energy projects, First Nations consultation, and wind turbines and migratory birds.
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Fall CPD: LSM
Mark your calendars for these fall continuing professional development programs:
- The Income Tax of Share Sales and Reorganizations - Cy Fien will explain what you need to know to avoid costly tax consequences on share sales and reorganizations. The program takes place on October 11, 2013, from noon to 1:30 p.m. at the Law Society classroom.
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Fall Conferences
- The 2013 National Competition Law Fall Conference will be held October 3-4, 2013 in Ottawa. Its broad theme is competition law enforcement, and presenters will consider recent decisions, new directions and future challenges.
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