



COURT OF APPEAL FOR ONTARIO

CITATION: Iskander v. BMO Nesbitt Burns Inc., 2014 ONCA 582

DATE: 20140814

DOCKET: C58725

Sharpe, Simmons and Pardu JJ.A.

BETWEEN

Christopher David Iskander

Applicant (Respondent)

and

BMO Nesbitt Burns Inc. and BMO Trust Company

Respondents (Appellants)

Mark Veneziano and Ian MacLeod, for BMO Nesbitt Burns
    Inc.

Nancy Arnold and Angela Shen, for the intervener, the
    Attorney General of Canada

Christopher David Iskander, in person

Heard and released orally: August 11, 2014

On appeal from the judgment of Justice P.T. Matlow of the
    Superior Court of Justice, dated April 16, 2014.

ENDORSEMENT

[1]

It is common ground that the only issue before the application judge was
    whether the applicant had provided BMO Nesbitt Burns (BMO) adequate information
    to allow BMO to deregister shares in a private corporation held in the
    applicants RRSP. The applicant accepted that BMO would be required to withhold
    and remit withholding tax to Canada Revenue Agency (CRA).

[2]

On his own motion, the application judge determined that there was no
    basis in law for BMO to withhold tax. He erred in so holding. That issue was
    not before him and this was not the appropriate forum to make that
    determination:
Tax Court of Canada Act
, R.S.C. 1985, c. T-2. S. 12.

[3]

In the circumstances, this is an appropriate case for this court to make
    the determination that the application judge should have made.

[4]

The applicant took the position that he had provided adequate
    information from which BMO could determine the value of the shares, namely, an
    offer by a third party to sell shares of a different class at the price of 50
    cents per share and a letter the applicant sent to the CRA purporting to
    confirm a conversation with a CRA representative that an offer to sell shares
    would be sufficient evidence to establish market value.

[5]

In our view, BMO was within its contractual rights to refuse to
    deregister the shares on the basis of the information the applicant had
    provided. The offer, standing alone without the shareholders agreement or any
    other details of the companys affairs, was inadequate.

[6]

Nor do we agree with the applicants interpretation of the exchange of
    emails between him and BMO as to what BMO would require. It was the applicant
    who insisted that BMO deregister the shares on the basis of the offer and we do
    not agree that BMO refused to accept anything other than a letter from the
    company as to the value of the shares.

[7]

Of course, it remains open to these parties to resolve the matter on the
    basis of proper documentation.

[8]

In the result, the appeal is allowed, the order of the application judge
    is set aside and the application is dismissed. Costs to the appellant fixed at
    $10,000 inclusive of disbursements and taxes, payable by the applicant.

Robert J. Sharpe J.A.

Janet
    Simmons J.A.

G.
    Pardu J.A.


