Telus – Ontario Superior of Court of Justice orders rectification to reorganize a corporate structure to reflect what it was thought to be at the time of making a tax election

A multi-tier alignment election made by Telus respecting a two-tier partnership structure held by it, to continue with the January 31 fiscal year ends of the two partnerships, was subsequently discovered by Telus to be invalid because it had overlooked a minority interest of one of the partnerships in a third partnership. If at the time Telus had known about this problem, it would have caused the partnership holding the minority interest to transfer it on a rollover basis to the partnership’s corporate subsidiary.

In granting the Telus application to correct this error by ordering this transfer to occur on a retroactive basis, Hainey J rejected the Crown submission that it was impermissible to use rectification to order a transaction that was not even remotely contemplated at the time, and stated following Juliar and Fairmont that "the Applicants had a specific and continuing intention throughout to file a valid Election." He stated in the alternative, and following TCR, that if rectification was not available, he could "rely on the equitable jurisdiction of this court" to make the same order.

Neal Armstrong. Summary of Telus Communications Inc. v. A.G. of Canada, 2015 ONSC 6245 under General Concepts – Rectification.