Words and Phrases - "trust"
Canada v. Canada North Group Inc., 2021 SCC 30, [2021] 2 S.C.R. 571
The Crown challenged an order of the Alberta judge in CCAA proceedings regarding the Canada North group of companies that “priming charges” pursuant to s. 11 of the CCAA for counsel fees, costs of the monitor and financing charges of an interim lender would rank in priority to all other security interests and charges, arguing that this priority was contrary to s. 227(4.1). The Crown argued that (1) s. 227(4.1) created a proprietary interest in the debtors’ assets and a court could not attach a super-priority charge to assets that were not the debtors’ property, and (2) in any event, s. 227(4.1) created a security interest that had statutory priority over all other security interests, including super-priority charges.
In the course of rejecting the first ground, Côté J noted that, in addition to the “indeterminacy” of which specific assets were covered by the deemed trust (para. 44), ”the fact that assets subject to the deemed trust are indeterminate makes the trustee’s role effectively impossible to play” (para. 45), so that the deemed trust did not accord with the Civil Law concept of a trust. Similar considerations indicated that s. 227(4.1) did not create a trust that accorded with common law concepts, and the Crown was not significantly assisted by the reference in s. 227(4.1) to the amount covered by the deemed trust being “property beneficially owned by Her Majesty.” In this regard, she noted:
- (at para. 46) that "[i]n the common law, a trust arises when legal ownership and beneficial ownership of a particular property are separated (see Valard Construction Ltd. v. Bird Construction Co., 2018 SCC 8" and that: “As Rothstein J. wrote, because of this fiduciary relationship,’“[t]he beneficial owner of property has been described as ‘the real owner of property even though it is in someone else’s name’ ‘ (Pecore v. Pecore, 2007 SCC 17 … ) .”
- (at para. 49) that: “Another core attribute of beneficial ownership is certainty as to the property that is subject to the trust … .”
- (at para. 52) that: “Traceability is another key aspect of a beneficial interest, since it allows the beneficial owner to enjoy the benefits of ownership, such as income from the property. It also ensures that the beneficial owner is responsible for the costs of ownership."
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 227 - Subsection 227(4.1) | a CCAA court can order a super-charge that has priority over the s. 227(4.1) deemed trust (which in fact does not create any Crown proprietary interest in the debtor’s assets) | 841 |
| Tax Topics - Statutory Interpretation - Interpretation/Definition Provisions | detailed listing of items covered in the 2nd part of a means and includes definition had a limiting effect | 289 |
| Tax Topics - Statutory Interpretation - Interpretation Act - Section 8.1 | Parliament chose to dissociate itself from provincial law in its drafting of a provision | 229 |
Canada (Attorney General) v. British Columbia Investment Management Corp., 2019 SCC 63, [2019] 4 S.C.R. 559
BCI was a BC Crown agent which was formed to manage and hold investments for the provincial pension plans. The governing Act (the “PSPSA”) and Regulation created a statutory trust under which each pension plan only had an entitlement to units in the investment pools managed by BCI and did not have ownership in any investment pool assets. CRA took the view (and ultimately assessed BCI for $40M in uncollected GST on the basis) that ETA s. 267.1(5)(a) deemed the statutory trust to be a person separate from BCI as agent for the provincial Crown, so that the investment services of BCI were supplied to that separate person.
Before going on to find that such assessments would contravene s. 125 of the Constitution Act, 1867 but for the effect of an Intergovernmental Agreement between B.C. and the federal government, Karakatsanis J stated (at paras. 56-57):
Counsel emphasized that because the PSPPA and the Regulation state that the Portfolio assets are “held in trust,” the Portfolios must be treated as a trust for the purposes of the ETA.
I disagree. The term “trust” is not defined in the ETA . Absent express direction to the contrary, undefined terms in a taxation statute must be interpreted according to their established and accepted legal meaning … . [S]. 8.1 of the Interpretation Act provides that, “unless otherwise provided by law, if in interpreting an enactment it is necessary to refer to a province’s rules, principles or concepts forming part of the law of property and civil rights, reference must be made to the rules, principles and concepts in force in the province at the time the enactment is being applied”. Since the ETA does not define the term “trust” and the concept of a trust undoubtedly forms part of the law of property and civil rights, reference must be made to the concept as its exists in British Columbia law. On this basis, unless the Portfolios would be considered a trust at private law, they cannot be a “person” within the meaning of s. 123(1) .
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - 101-110 - Section 104 - Subsection 104(1) | statutory trust was not necessarily a “trust” | 271 |
| Tax Topics - Other Legislation/Constitution - Constitution Act, 1867 - Section 125 | ETA taxes that would be borne by portfolio of which a Crown agent was legal owner would contravene s. 125 | 298 |
| Tax Topics - Excise Tax Act - Section 122 | s. 122 does not preclude imposition of collection duties | 302 |
4 October 2010 Internal T.I. 2008-0289461I7 - Netherlands Antilles private foundation
A private foundation was created pursuant to the laws of the Netherlands Antilles and governed by Articles of Foundation. Its capital consists of assets contributed by the Founder, as well as other assets acquired from others, it may make distributions out of its assets (mostly securities) to such persons and entities as the Foundation Council may determine with the written consent of the Founder (but, in fact, the beneficiaries are listed in the Foundation’s Administrative Rules) and its Foundation Council members who commission its management are appointed by the Founder. Is the foundation a trust or corporation? The Directorate responded:
[T]he private foundation created pursuant to the laws of the Netherlands Antilles is similar, in some respects, to the civil law trust.
In order to characterize a Netherlands Antilles private foundation that displays both corporate and trust attributes, it will be necessary to determine what the distinguishing characteristics of a Canadian corporation are, as compared to a Canadian trust, and the weight that should be attached to each… . Once that is done, a characterization determination can be made by comparing those characteristics with the attributes of the Netherlands Antilles Private Foundation.
…[T]he Foundation possesses a separate legal existence from the beneficiaries of the Foundation...possesses its own capacity to acquire rights and to assume liabilities…[and t]he beneficiaries of the Foundation also are not personally liable for any of the debts incurred by the Foundation. In th[ese] respect[s], the Foundation is similar to a corporation. … [However] the Foundation does not issue share capital or something else which serves the same function… the beneficiaries do not pay for their interests in the foundation… the beneficiaries of a private foundation cannot transfer their beneficial interest in the foundation to someone else…[and] the beneficiaries of the Foundation never have the right to participate in the decisions of the Foundation. … [Accordingly] the attributes of a private foundation created pursuant to the laws of the Netherlands Antilles more closely resemble those of a trust under our common and civil law than a corporation. As such, the Foundation should be treated as a trust… . [T]he existence of a separate legal entity clause contained in the Netherlands Antilles legislation governing private foundations would not...preclude an arrangement from being considered as a trust.
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Corporation | Netherlands Antilles private foundation qualifies as a trust notwithstanding its separate legal personality | 109 |