



COURT OF APPEAL FOR ONTARIO

CITATION: Canada Life Insurance Company of Canada v. Canada
    (Attorney General), 2018 ONCA 562

DATE: 20180621

DOCKET: C61470

Sharpe, Epstein and van Rensburg JJ.A.

BETWEEN

The Canada Life Insurance Company

of Canada

Applicant
(Respondent in Appeal/Appellant by Cross-Appeal)

and

The Attorney General of Canada

Respondent
(Appellant/Respondent by Cross-Appeal)

and

Her Majesty the Queen in
    Right of Ontario

Respondent
(Respondent in Appeal/Respondent by Cross-Appeal)

Alexandra Humphrey, Alisa
    Apostle and Stephanie Hodge, for the appellant/respondent by cross-appeal

Kent Thomson, Stephen Ruby
    and Sarah Weingarten, for the respondent in appeal/appellant by cross-appeal

Heard: November 20, 2017

On appeal from the order of Justice Laurence A. Pattillo
    of the Superior Court of Justice, dated November 19, 2015, with reasons reported
    at 2015 ONSC 281.

van Rensburg J.A.:

OVERVIEW

[1]

The Canada Life Insurance Company of Canada
    (CLICC) and certain of its affiliates carried out a series of transactions
    and events (the Transaction) in December 2007. The purpose of the Transaction
    was to realize a tax loss to offset unrealized foreign exchange gains accrued
    in the same taxation year. In 2012, the Canada Revenue Agency (CRA)
    disallowed the claimed loss in a reassessment of CLICCs taxes for 2007.
    Asserting that it had proceeded on the basis of erroneous advice from its tax
    advisor, CLICC applied to the Superior Court for an order setting aside the Transaction
    and replacing it with other steps, retroactive to the date of the original Transaction.

[2]

The application was opposed by the CRA,
    represented by the Attorney General of Canada (the Attorney General). Her
    Majesty the Queen in Right of Ontario, on behalf of the Director appointed
    pursuant to s. 278 of the
Ontario Business Corporations Act
, R.S.O., c. B.16, as amended (the OBCA), did not oppose the
    application and did not participate in this appeal.

[3]

The application judge, Pattillo J., made
    the order requested by CLICC. Relying on this courts decisions in
Canada
    (Attorney General) v. Juliar
(2000)
, 136 O.A.C. 301 (C.A.), leave to appeal refd, [2000] S.C.C.A. No.
    621 (
Juliar
) and
Fairmont Hotels
    Inc. v. Canada (Attorney General)
, 2015 ONCA 441, 2015
    D.T.C. 5073, revd 2016 SCC 56, [2016] 2 S.C.R. 720 (
Fairmont Hotels
),
    the application judge ordered rectification of the Transaction,
nunc
    pro tunc
.


[4]

The Attorney General appealed the decision of Pattillo
    J. The parties agreed to hold the appeal in abeyance until the Supreme Court
    released its decision in
Fairmont Hotels
. The
    parties now agree that the application judge erred in granting rectification, as
    the recent decision in
Fairmont Hotels
changed
    the law on which Pattillo J. relied, and restricted the scope of this equitable
    remedy to the correction of written agreements.

[5]

In its cross-appeal, CLICC seeks to substitute for the
    order made in the court below a new order that would permit it to achieve the
    intended tax purpose of the Transaction. CLICC relies on this courts inherent
    jurisdiction in equity and equitable rescission, as alternative bases for the
    relief sought. The cross-appeal is opposed by the Attorney General.

[6]

At the heart of the cross-appeal is whether the remedy
    sought by CLICC is available in the exercise of the courts jurisdiction in
    equity to relieve against mistakes in the light of the Supreme Courts decision
    in
Fairmont Hotels
.

[7]

I have concluded that the relief sought, albeit by a
    different name, is the very type of correction of an error in the structuring
    and implementation of a transaction to achieve a particular taxation result that
    the Supreme Court rejected in
Fairmont Hotels
.
    I would also reject CLICCs attempt to obtain this relief through equitable
    rescission, a remedy that is simply not available in the circumstances of this
    case. Finally, equitable considerations common to both remedies preclude the
    granting of a remedy in the particular circumstances of this case.

As such,
    and for the reasons that follow, I would allow the appeal and dismiss the
    cross-appeal.

FACTS

[8]

In April 2007, CLICC entered into a series of
    transactions with other members of the Great West Life group of companies. These
    transactions left CLICC with foreign exchange exposure on U.S. denominated
    investments that it held indirectly through Mountain Asset Management LP (MAM
    LP), a limited partnership. To offset this exposure, CLICC entered into third
    party hedge contracts with various financial institutions to eliminate any
    foreign exchange risk resulting from changes to the Canadian/U.S. dollar
    exchange rate.

[9]

During the last three quarters of CLICCs 2007 taxation
    year ending December 31, 2007 the U.S. dollar decreased in value against the
    Canadian dollar, which resulted in CLICC having accrued and unrealized losses
    of approximately $168 million on its interest in MAM LP. It also accrued the
    same amount of unrealized gains associated with the hedge contracts.

[10]

This was a mismatch for Canadian tax purposes as CLICC was
    required to report the unrealized capital gains on its 2007 tax return, but
    could not claim the corresponding unrealized foreign exchange losses associated
    with the hedge contracts in the same taxation year. The losses would be deductible
    only after they were realized.

[11]

The purpose of the Transaction was to generate a realized loss to
    offset against the accrued gains to avoid taxation. The Transaction, which was
    completed in December 2007, involved the following steps by CLICC and its
    affiliates (described at paras. 21-23 of the application judges reasons):

1.

On December 6, 2007 at 2:00 p.m. (Central Time), MAM Holdings Inc.
    (an Ontario company owned 5.575% by Great-West Life Assurance Company (GWL)
    and 94.425% by MAM LP), declared a dividend of $44,800,645 on its common
    shares, payable on December 7, 2007.

2.

Immediately following the declaration of the dividend, MAM Holdings
    Inc. paid the dividend to GWL and MAM LP, in accordance with their interests.

3.

On December 7, 2007 at 3:00 p.m. (Central Time), MAP LP distributed
    its MAM Holdings Inc. shares to its limited partner CLICC and its general
    partner CLICC GP based on their 99% and 1% interests.

4.

On December 31, 2007 at 3:00 p.m. (Eastern Time), the rights and
    interests of CLICC and CLICC GP in MAM LP were cancelled and extinguished. MAM
    LP distributed
pro rata
, to CLICC and CLICC GP,
    all of its property (except for $100 of limited partnership capital),
    consisting of a promissory note from MAM Holdings Inc. having a principal
    amount of $952,728,964 and short term securities and cash having a value of
    $42,387,295.

5.

On December 31, 2007 at 4:00 p.m. (Eastern Time), MAM LP was
    dissolved and immediately thereafter, the remaining $100 of partnership capital
    was distributed,
pro rata
, to CLICC and CLICC
    GP.

6.

On December 31, 2007 at 11:59 p.m. (Eastern Time), CLICC GP was
    wound up and its assets and liabilities were acquired and assumed by CLICC.

7.

By Certificate of Dissolution dated October 14, 2008 CLICC GP was
    formally dissolved.

[12]

The result of the Transaction was that CLICC suffered a loss
    resulting from the disposition of its 99% limited partnership interest in MAM
    LP in the amount of approximately $168 million (the difference between what
    CLICC received for its 99% interest in MAM LP and the cost of CLICCs interest
    in MAM LP for tax purposes). CLICC included the gains from the hedge contracts in
    its income tax return for the 2007 taxation year ending December 31, 2007 and
    deducted a corresponding amount in respect of the loss realized by the
    disposition of its 99% interest in MAM LP by reason of the dissolution of MAM
    LP.

[13]

On July 16, 2012 CRA issued a Notice of Reassessment to CLICC. CRA
    disallowed CLICCs claim for the loss on the basis that subsection 98(5) of the
Income Tax Act
, R.S.C., 1985, c. 1 (5th Supp.)
    (the ITA) applied, such that the dissolution of MAM LP was effected on a
    rollover or tax-deferred basis, without generating the intended immediate
    tax loss.

[14]

CLICC contends that an error was committed when the Transaction was
    designed and implemented. It relied on the tax advice of its external counsel,
    and failed to consider the possibility that s. 98(5) of the ITA might apply to
    the Transaction. If CLICC had adverted to the possible application of s. 98(5),
    it would have structured the Transaction in such a way as to avoid the
    application of that provision.

[15]

CLICC filed a notice of objection to the reassessment, in which it
    confirmed its intention to apply to the Superior Court for an order rectifying
    the Transaction with the result that s. 98(5) of the ITA would not apply to
    prevent CLICC from realizing the tax loss it claimed.

THE APPLICATION

[16]

CLICC requested an order
nunc pro tunc
cancelling the various steps taken in the Transaction and replacing them
    with a new series of steps that would dissolve MAM LP at December 31, 2007 in a
    way that s. 98(5) of the ITA would not apply. CLICC relied on the doctrine of
    rectification or, alternatively, on the courts inherent jurisdiction to
    relieve parties retroactively from the effects of their mistakes in circumstances
    where it is just and equitable to do so.

[17]

CLICC brought a motion shortly after the hearing of the application
    in which, among other things, it proposed what it described as a simplified
    form of relief. That relief involved delaying the wind-up of CLICC GP from
    December 31, 2007 to April 30, 2008, so that more than three months had elapsed
    following the dissolution of MAM LP, together with a number of ancillary
    orders.

DECISION OF THE APPLICATION JUDGE

[18]

The application judge granted the order initially sought by CLICC
    based on rectification.

[19]

Pattillo J. concluded that CLICC and the other parties to the transaction
    shared a common and continuing intention for CLICC in its 2007 taxation year
    to realize a deductible tax loss of approximately $168 million inherent in its
    partnership interest in MAM LP. The mistake was in structuring the Transaction
    without including steps to address the application of s. 98(5) of the ITA. The
    application judge concluded that this was not a case of
retroactive
tax planning, as the intention was always to create a taxable loss
    in the 2007 tax year in order to offset the unrealized taxable gain arising
    from the foreign exchange gains accrued (at paras. 36-39).

[20]

The application judge relied on Newbould J.s decision in
Fairmont
    Hotels Inc. v. Canada (Attorney General)
, 2014 ONSC 7302,
    123 O.R. (3d) 241, which by that point had been upheld on appeal to this court.
    In that case, Newbould J. applied this courts previous decision in
Juliar
to grant rectification in respect of a similar non arms-length
    corporate transaction. The application judge did not need to consider CLICCs
    alternative argument  that substantially the same order could be granted
    through the exercise of the courts inherent jurisdiction to relieve against
    mistakes. He also dismissed as unnecessary CLICCs motion to substitute a more
    simplified form of order.

[21]

The application judges order reversed the dissolution of MAM LP and
    the winding up of CLICC GP, and rectified certain transactions and events,
nunc
    pro tunc
as at the times and dates they occurred, whereby
    the winding-up and dissolution of CLICC GP was preceded by the dissolution of
    MAM LP and the distribution of its assets to CLICC and CLICC GP.

[22]

In particular, the order:

1.

Deemed the resolutions of December 21, 2007 by
    CLICC and CLICC GP cancelling and extinguishing their rights and interests in MAM
    LP to be null and void.

2.

Deemed the cancellation and extinguishment of
    the partnership interests of CLICC and of CLICC GP in MAM LP and distribution
    of its property as well as its dissolution not to have occurred at 3 p.m. (Eastern
    Time) on December 31, 2007 and to be null and void.

3.

Deemed CLICC GP to have acquired CLICCs shares
    in MAM Holdings Inc. on December 7, 2007.

4.

Deemed MAM LP to have then distributed its
    assets on December 31, 2007 to the same extent and in the same kind as was
    originally planned to happen.

5.

Deemed CLICC to have sold its interest in MAM LP
    to CLICC GP on December 31, 2007.

6.

Declared the sale to result in the cessation and
    dissolution of MAM LP and the transfer of its property and assets to CLICC GP.

7.

Deemed CLICC GP to have paid a dividend to CLICC
    after these operations.

8.

Cancelled the resolution dissolving CLICC GP dated
    December 21, 2007 and deemed it to be null and void.

9.

Deemed CLICC GP to have transferred all of its
    property, assets and rights to CLICC on April 30, 2008. CLICC GP was deemed to
    have been wound-up on that date.

10.

Deemed the articles of dissolution originally filed for to the December
    31, 2007 wind-up to have been filed for the April 30, 2008 wind-up.

11.

Deemed all the documents necessary for these operations to have been
    passed.

12.

Declared that the order did not affect the declaration of
    dissolution filed by MAM LP on December 21, 2007.

13.

Ordered costs in
favour
of CLICC.

THE APPEAL

[23]

CLICC concedes that, although the application judge applied the
    prevailing test for rectification in effect at the time he made his order (the
    test in
Juliar
), that test was superceded by
    the Supreme Court decision in
Fairmont Hotels
,
    and no longer governs requests for rectification in matters of this nature.

[24]

While CLICC initially responded to the Attorney Generals appeal by
    seeking to uphold Pattillo J.s order on the alternative basis that it could
    have been granted in the exercise of the courts equitable jurisdiction to
    relieve against mistakes, CLICC ultimately abandoned that position and its
    opposition to the appeal. Instead, CLICC pursues a different order in its
    cross-appeal.

THE CROSS-APPEAL

[25]

The order CLICC now invites this court to make has evolved from what
    was requested in its original notice of cross-appeal and factum. At the appeal
    hearing, CLICC advised that it now seeks an order the effect of which is to cancel
    the December 31, 2007 wind-up of CLICC GP and to cancel and reverse the
    transfer by CLICC GP to CLICC of all of its property, assets and rights.

[26]

CLICC asserts that s. 98(5) of the ITA only deprives it of the tax
    loss it intended to realize because, in addition to effecting the dissolution
    of MAM LP on December 31, 2007, it effected the dissolution and voluntary
    distribution of the assets of CLICC GP immediately thereafter. The winding up
    of CLICC GP in December 2007 was a matter of convenience, and was not required
    in order for CLICC to realize the tax loss that it intended to achieve in 2007
    on the dissolution of MAM LP. If CLICC GP had not been wound up immediately,
    the Transaction would not have been subject to the rollover provisions of s.
    98(5) of the ITA.

[27]

Accordingly, and relying on the same record that was before the
    application judge, CLICC asks this court to substitute for the order of
    Pattillo J. an order that:

(i)

the special resolution of CLICC, as sole
    shareholder of CLICC GP, dated December 21, 2007 authorizing the dissolution of
    CLICC GP pursuant to subsection 237(b) of the OBCA shall be and is hereby
    deemed to be cancelled and to be null and void,
nunc pro tunc
, as at December 21, 2007;

(ii)

the dissolution of CLICC GP shall be and is
    hereby cancelled,
ab initio
;

(iii)

the disposition by CLICC GP to its sole shareholder CLICC of all of
    its property, rights and assets on December 31, 2007, made pursuant to that
    dissolution, shall be and is hereby cancelled and deemed to be null and void,
nunc
    pro tunc
, as at the time such disposition was effected,
    and that such property, rights and assets be revested in or restored in
    substance to CLICC GP as at December 31, 2007;

(iv)

the Articles of Dissolution of CLICC GP, filed with the Director
    appointed pursuant to s. 278 of the OBCA in respect of the dissolution of CLICC
    GP, shall be and are hereby cancelled and deemed to be null and void
nunc
    pro tunc
, as at the beginning of the day on which they
    were executed by CLICC GP;

(v)

the Director, having endorsed a Certificate of
    Dissolution dated October 14, 2008 on the Articles of Dissolution of CLICC GP,
    cancel that Certificate, effective as at the beginning of the day on October
    14, 2008; and

(vi)

nothing herein affects the declaration of dissolution filed with the
    Ontario Ministry of Government Services on December 31, 2007 by MAM LP pursuant
    to subsection 23(1) of the Ontario
Limited Partnerships Act
dissolving MAM LP effective that day.

[28]

The Attorney General does not oppose CLICCs pursuit in this court
    of an entirely new form of order, but argues that the order should not be made.

THE ISSUES

[29]

CLICC argues two alternative bases for the order it seeks, both
    relying on the fact that a mistake was made in structuring the Transaction:

1)

CLICC seeks to invoke
    this courts equitable jurisdiction to relieve a party from the effects of its
    mistake in the interests of fairness and equity, by unwinding or reversing
    transactions structured or implemented in error; and

2)

CLICC seeks relief
    based on the equitable remedy of rescission.

THE PARTIES POSITIONS

(1)

CLICCs
    Position on the Courts Equitable Jurisdiction to Relieve against Mistakes

[30]

CLICC contends that the order it seeks is a different remedy than
    rectification
.


[31]

It points out that, in a number of cases
    where rectification was granted or considered by the court, the applicant
    sought, and the court would have granted, the same or similar relief on this
    equitable basis.
See for example
Re Amcor Packaging Canada Inc.
,
    2012 ONSC 6168, 1 C.C.P.B. (2d) 179, at paras. 17-18;
Telus Communications
    Inc. v. Canada (Attorney General)
, 2015 ONSC 6245, [2016] 5 C.T.C. 78, at
    para. 20;
Re GT Group Telecom Inc
. (2004), 5 C.B.R. (5th) 230 (Ont.
    S.C.), at para. 5.
Indeed, CLICC relied on this alternative
    ground before the application judge, but it did not have to be addressed.

[32]

CLICC contends that
Fairmont Hotels
restricted the
equitable
    remedy of rectification to the correction of written agreements, but that the Supreme
    Court left open the ability for a court, in the exercise of its general
    equitable jurisdiction, to correct a mistake, including to retroactively alter
    a transaction, even when the objective is to secure a particular tax treatment.

[33]

CLICC maintains that the CRA will suffer no prejudice, and will only
    be deprived of an unwarranted benefit or windfall gain to which it would not be
    entitled but for the mistake.

(2)

The Attorney
    Generals Position on the Courts Equitable Jurisdiction to Relieve against Mistakes

[34]

The Attorney General contends that CLICC cannot obtain the relief it
    seeks because CLICC is not entitled, by a different name, to the very relief
    that the Supreme Court ruled out in
Fairmont Hotels
. The Attorney General asserts that CLICC does not meet the
    requirements for equitable relief from the consequences of a mistake for
    essentially the same reasons it is unable to obtain relief through
    rectification. CLICCs objective is to avoid an adverse tax consequence by
    retroactively changing the facts on which its tax assessment was based.

(3)

CLICCs Position on Equitable Rescission

[35]

CLICC
    makes the alternative argument that it is entitled to the same order  to
    retroactively cancel the dissolution of CLICC GP, and to reverse the December
    2007 transfer by CLICC GP to CLICC, and to revest in CLICC GP, all of its
    property, assets and rights  by way of rescission. CLICC says that what it is
    asking the court to do is to permit it to unwind a voluntary disposition of
    property that was effected in error.

[36]

CLICC
    relies on two cases involving rescission of voluntary dispositions:
Pitt v.
    Holt
, [2013] 2 A.C. 108 (U.K.S.C.) and
Re Pallen Trust
, 2015 BCCA 222, 76 B.C.L.R. (5th) 256,
which followed and applied
Pitt v. Holt.
It says that these cases are
    authority that the remedy of equitable rescission of voluntary dispositions is
    available, even when the objective is to avoid unintended adverse tax
    consequences.

(4)

The Attorney Generals Position on Equitable Rescission

[37]

The Attorney General does not object to CLICC putting forward the
    new argument of rescission as an alternative basis for the relief it seeks.

[38]

However,
    the Attorney General asserts that CLICC is not asking this Court to rescind a voluntary
    or gratuitous transfer of property but rather to rescind a commercial contract
    that it entered into with a wholly-owned subsidiary, and that the test for
    equitable rescission of a contract for mistake cannot be met.

[39]

The Attorney General also asserts that CLICC does not meet the test
    for equitable relief whether by the exercise of the courts inherent
    jurisdiction to correct mistakes or through the remedy of rescission for two
    reasons.

[40]

First, CLICC has alternative remedies to address the adverse tax
    consequences resulting from the mistake it relies on. It has filed a notice of
    objection to appeal its tax assessment, it has a potential legal action against
    its professional advisors and, under s. 23 of the
Financial
    Administration Act
, R.S.C. 1985, c. F-11, CLICC can apply
    to the Minister for a remission of tax where its collection is unreasonable or
    unjust or where it is otherwise in the public interest to remit the tax.

[41]

Second, the circumstances here would not warrant the intervention of
    equity. Denying CLICC relief will not unjustly enrich the Crown and its
    windfall argument was considered and rejected by the Supreme Court in
Fairmont
    Hotels
.

ANALYSIS

(1)

The relief
    CLICC seeks is not available under the inherent jurisdiction of the court to
    relieve a party from the effects of a mistake

[42]

CLICC asks this court to retroactively alter a corporate transaction
    that was entered into to achieve a certain tax result, and where the result has
    not been achieved because of a mistake in how the transaction was structured.

[43]

I have concluded that CLICC is not entitled to the remedy it is
    seeking on its cross-appeal, through the exercise of any inherent jurisdiction
    the court may have to relieve against mistakes. What CLICC is seeking is the
    same type of intervention, by a different name, that the Supreme Court considered
    in
Fairmont Hotels
and
Jean
    Coutu Group (PJC) Inc. v. Canada (Attorney General)
, 2016 SCC 55, [2016] 2
    S.C.R. 670 (
Jean Coutu
), a companion appeal released on the same day
    as
Fairmont Hotels
. The Supreme Court concluded that
    it is not possible to rectify a corporate transaction to retroactively avoid
    adverse tax consequences. In my view, the remedy CLICC seeks, whether
    characterized as rectification or some other equitable remedy, is precluded by
    the reasoning in
Fairmont Hotels
and
Jean
    Coutu
. To explain why I have come to this conclusion, it
    is helpful to describe the evolution of the law in Ontario that culminated in
    these two decisions.

[44]

As I will explain, this court in
771225 Ontario Inc. v.
    Bramco Holdings Co.
(1995), 21 O.R. (3d) 739 (C.A.),
    leave to appeal refd [1995] S.C.C.A No. 47 (
Bramco
), recognized that any equitable jurisdiction that a court may have
    to relieve against a mistake cannot be invoked in order to retroactively alter
    a transaction to achieve a tax planning objective.

[45]

In my view,
Bramco
remains an impediment to the exercise of the equitable jurisdiction
    of the court to correct the mistake that was made in this case. Although this
    court in
Juliar
adopted an expansive view of
    rectification as a basis to avoid the principle articulated in
Bramco
, in
Fairmont Hotels
, the Supreme
    Court expressly shut down this approach when it overruled
Juliar
. Rectification is now limited to cases where the written instrument
    fails to record correctly the parties agreement.

[46]

In addition,
Fairmont Hotels

and
Jean Coutu
also affirm the
    underlying policy rationale of
Bramco
; it is
    not possible to alter corporate transactions on
a nunc pro tunc
basis to achieve particular tax objectives. In other words, the Supreme
    Court has signaled that retroactive tax planning by order of the Superior Court
    exercising its equitable jurisdiction is impermissible.

[47]

TCR
    Holding Corp. v. Ontario
, 2010 ONCA 233, 261 O.A.C. 256, leave
    to appeal refd, [2010] S.C.C. A. No. 206 (

TCR Holding

), does not alter this result. While
    this court may have recognized that other equitable remedies remain generally
    available even when rectification is not, it did not authorize such equitable remedies
    for the purpose of impermissible retroactive tax planning. I turn now to the
    development of these key principles in the case law.

(a)

Bramco
precludes
    resort to equitable jurisdiction to retroactively achieve a tax objective

[48]

In
Bramco
,

the appellant, Ms. Ho, sought to correct a mistake in a
    property transfer. After entering into an agreement to purchase land in the
    name of one of her numbered companies, she effected the transfer to a second
    company, which was a non-resident. The result was a land transfer tax of $1.7
    million, when a transfer of the property to the first company would have attracted
    land transfer tax of less than $85,000.

[49]

This court upheld the decision of the application judge refusing
    rectification. The structure for the transaction was selected with income tax
    consequences in mind, and not with a view to minimizing land transfer tax. Ms.
    Hos intention was always to take title in the name of the second company. The
    mistake was in failing to take into consideration the land transfer tax
    implications when the purchase was structured and carried out. Rectification
    was unavailable in circumstances where the transaction had achieved its
    intended purpose. I refer to this part of the reasons as the first prong of
    the decision in
Bramco.


[50]

This court considered the appellants alternative argument that the
    same relief was available under the courts general equitable jurisdiction to
    relieve against mistakes, the second prong of the decision. Accepting for the
    purpose of the appeal that such jurisdiction existed, the court refused the
    order for two reasons.

[51]

First, the appellant had an adequate alternative remedy to address
    the property tax issue under the
Land Transfer Tax Act
, R.S.O. 1990, c. L.6 (although her application for special
    consideration had been refused). Galligan J.A. observed that the courts
    equitable discretion should not be exercised to enable a person to obtain
    relief through equitable remedies which she was not able to obtain by the
    remedy which the law afforded her (at p. 742).

[52]

Second, to grant such relief would run contrary to the
    well-established rule in tax cases that the courts do not look with favour
    upon attempts to rewrite history in order to obtain more favourable tax
    treatment: The cases seem to hold consistently that tax liability is based
    upon what happened, not upon what, in retrospect, the taxpayer wished had
    happened (at p. 742).

[53]

CLICC relies on
Bramco
as authority
    for the courts general jurisdiction in equity to relieve against mistakes, as
    separate and independent and having a different meaning from rectification,
    and says that the reasons for rejecting an equitable remedy in
Bramco
do not apply to its case. The Attorney General argues
    that
Bramco
, consistent with
Fairmont
    Hotels
, precludes resort to any such equitable
    jurisdiction to retroactively achieve a tax objective, and in any event would
    preclude such a remedy where, as here, the applicant has an adequate
    alternative legal remedy.

[54]

I agree with the Attorney Generals position that the reasons for
    refusing general equitable relief in
Bramco
apply
    equally to this case. Furthermore,
Bramco
identified
    the problems with a
nunc pro tunc
order
    designed to reverse transactions to achieve a particular tax objective.

(b)

Juliar
expanded
    the scope of rectification but did not consider impediments to equitable relief
    in the tax context

[55]

In its later decision in
Juliar
,

this court
    avoided the first prong of the
Bramco
decision
by invoking an
    expanded doctrine of rectification to correct errors in the structuring of transactions
    to conform to the parties intention. It did so by defining the intention
    required for rectification broadly to include a partys tax objectives. This
    expanded remedy permitted parties to revoke and replace corporate transactions to
    avoid adverse tax consequences, provided that the court was satisfied that the
    parties had a continuing intention to achieve a particular tax outcome that was
    not realized because of a mistake.


[56]

The court did not address the second prong of the
Bramco
decision  the impediments to the intervention by the court in equity to
    reverse a transaction for tax purposes.

[57]

In
Juliar
,
t
he respondents had
    entered into a transaction which, because of erroneous professional advice,
    triggered an unintended income tax liability. The tax liability could have been
    deferred if the transaction had been structured differently. The respondents
    appealed their tax reassessment, and in the interim applied to the court for
    rectification of the transaction, which was granted:
Attorney
    General of Canada v. Juliar
(1999)
,
46 O.R. (3d) 104 (S.C.).

[58]

The Minister of National Revenue appealed, relying on
Bramco
as authority that rectification was not available, and
    that there was no other basis on which the relief sought could be granted.

[59]

This court distinguished the refusal of rectification in
Bramco
by focusing on the question of the parties intention
    at the time the transaction was entered into. In
Bramco
,

Ms. Hos
    primary objective was
not
the avoidance of
    land transfer tax and the excessive land transfer tax was a consequence she only
    subsequently sought to avoid. By contrast, the application judge in
Juliar

made a finding of fact that the true agreement between the
    parties was the completion of the transaction in a manner that would not
    attract immediate liability for income tax. He accepted that the transaction
    had to be carried out on a no immediate tax basis or not at all (at paras. 25
    and 27).

[60]

This court dismissed the appeal and approved of the use of the
    remedy of rectification to permit the unwinding and replacement of a corporate
    transaction to achieve the intended tax outcome. The court did not consider
    whether the exercise of the courts general equitable jurisdiction to correct
    mistakes was available, and importantly, whether the same barriers to the
    exercise of that jurisdiction that existed in
Bramco
 the existence of an alternative legal remedy, and the fact that the
    order was sought to obtain more favourable tax treatment - would preclude
    relief on this basis.

(c)

Fairmont Hotels
and
Jean Coutu
overrule
Juliar
and affirm the policy considerations
    underlying
Bramco

[61]

Leading up to and following
Juliar
, orders were routinely made in the Superior Court granting
    rectification of corporate transactions to avoid adverse tax consequences. One
    such order was made in the case of
Fairmont Hotels.
In that case, the order
rectified
    a corporate transaction, essentially by substituting
nunc pro tunc

new and different directors resolutions to convert a
    share redemption into a loan
.

[62]

Fairmont
    Hotels
was appealed to this court. In its brief
    endorsement, the court relied on the expansive interpretation of rectification adopted
    in
Juliar
and stated, at para. 10, that the
    critical requirement for rectification is proof of a continuing specific
    intention to undertake a transaction or transactions on a particular tax
    basis. In that case, the parties intended to take certain steps on a tax-free
    basis, but, as a result of a mistake by a member of Fairmonts senior
    management, the wrong transactional device was used, which triggered an
    adverse and unintended tax consequence.

[63]

As already noted, in 2016 the Supreme Court allowed the appeal from
    this courts decision in
Fairmont Hotels
. In
    my view, the companion decisions in
Fairmont Hotels
and
Jean Coutu
, do two things: (1) they specifically overrule the
    broad approach to rectification in the tax context that had been taken in
Juliar
, and (2) they
recognize
    and give effect to the same policy concerns that form the basis for the second
    prong of the
Bramco
decision.
Fairmont Hotels
and
Jean Coutu

effectively preclude the use of this courts equitable jurisdiction
    to refashion a corporate transaction to achieve a specific tax objective,
    whether or not that was the original intention of the parties to the
    transaction.

[64]

On the rectification point, in his majority reasons in
Fairmont
    Hotels
, Brown J. held, at para. 3, that even if all
    parties to the subject transactions had a common intention of tax neutrality,
    [r]ectification is limited to cases where the agreement between the parties
    was not correctly recorded in the instrument that became the final expression
    of their agreement and does not undo unanticipated effects of that agreement.
    He continued, at para. 13: [R]ectification is unavailable where the basis for
    seeking it is that one or both of the parties wish to amend
not the
    instrument
recording their agreement, but
the
    agreement itself
 (emphasis in original).

[65]

The court concluded that
Juliar
was
    wrongly decided. Brown J. stated that the parties mistake in
Juliar

was not in the recording of their intended agreement, but
    in their selection of the wrong mechanism (the transfer of shares for a
    promissory note instead of a shares-for-shares transfer). The Court of Appeal
    purported to
ʹ
rectify
ʹ
not merely the instrument recording the parties antecedent
    agreement, but the agreement itself where it failed to achieve the desired
    result of produced an unanticipated adverse consequence  that is where it was
    the product of an error in judgment (at para. 19).

[66]

CLICC submits that when the Supreme Court overturned
Juliar

in Fairmont Hotels
,

it left untouched the ability of the court to grant essentially
    the same relief  the retroactive unwinding of a transaction and its
    replacement by something else  under its general equitable jurisdiction to
    correct mistakes. This argument however ignores essential passages from Brown J.s
    majority reasons. At paras. 23 and 24, Brown J. stated the following:

Finally,
Juliar
does not account for this
    Court's direction, in
Shell Canada Ltd. v. Canada
, [1999] 3
    S.C.R. 622, at para. 45, that a taxpayer should expect to be taxed "based
    on what it actually did, not based on what it could have done". While this
    statement in
Shell Canada
was applied to support the
    proposition that a taxpayer should not be denied a sought-after fiscal
    objective merely because others had not availed themselves of the same
    advantage, it cuts the other way, too: taxpayers should not be judicially
    accorded a benefit based solely on what they would have done had they known
    better.

This point goes to the
    respondents' submission that "[r]ectification is necessary to ... avoid
    unjust enrichment of the Crown" (R.F., at para. 76), echoing the Court of
    Appeal's concern in
Juliar
(at paras. 33-34, quoting
Re
    Slocock's Will Trusts
, at p. 363) for the Crown's "accidental and
    unexpected windfall" and the chambers judge's concern in the present
    appeal (at para. 44) about the CRA's "unintended gain" and (at para.
    52) the Crown's "tax windfall". With respect, the premise underlying
    such concerns misses the point of the inquiry, inasmuch as it concerns the CRA.
    Tax consequences, including those which follow an assessment by the CRA, flow
    from freely chosen legal arrangements, not from the intended or unintended
    effects of those arrangements, whether upon the taxpayer or upon the public
    treasury. The proper inquiry is no more into the "windfall" for the
    public treasury when a taxpayer loses a benefit than it is into the
    "windfall" for the taxpayer when that taxpayer secures a benefit. The
    inquiry, rather, is into what the taxpayer agreed to do.
Juliar
erroneously
    departed from this principle, and in so doing allowed for impermissible
    retroactive tax planning:
Harvest Operations Corp. v. Canada
    (Attorney General)
, 2015 ABQB 327, 6 C.T.C. 78, at para. 49.

[67]

The Supreme Court in
Fairmont Hotels
was concerned not only with the availability of rectification as a
    remedy, but with the courts doing something under the guise of rectification
    that is not permitted  altering a corporate transaction
nunc pro
    tunc

to achieve a particular tax objective. The
    important point here is that tax consequences flow from freely chosen legal
    arrangements, not from the intended or unintended effects of those
    arrangements, and that the inquiry is into what the taxpayer agreed to do.
    Brown J. concluded that
Juliar
erroneously
    departed from this principle, and in so doing allowed for impermissible
    retroactive tax planning.

[68]

CLICC argues that, because the Transaction in which the mistake was
    made was always intended to generate a loss for tax purposes, although this is
    tax planning, it is not a case of
retroactive
tax planning. Indeed, the application judge specifically noted, at para. 37,
    that this was not a case of retroactive tax planning after the CRA audit and
    reassessment because the purpose was always to create a taxable loss to offset
    an unrealized taxable gain. As such, CLICC says that
Fairmont Hotels

would not preclude the order it seeks.

[69]

This argument has no merit. Retroactive tax planning is not limited
    to attempts to secure a more favourable tax consequence than one had originally
    hoped to generate. It includes attempts to change ones affairs so that tax
    consequences that were intended, but which were prevented by a mistake, can be
    achieved. Brown J.s reference to impermissible retroactive tax planning, which
    he noted occurred in
Juliar
, referred to both
    the intended and unintended effects of parties transactions or
    arrangements. Indeed,
Juliar
involved a
    transaction that was undertaken to achieve a particular tax result, as did
Fairmont
 the court accepted that tax neutrality was the parties
    intention (at para. 3)
.

[70]

The
    concern about retroactive tax planning as a policy reason for refusing an order
    to modify a corporate transaction to achieve a tax objective was articulated by
    Wagner J. (as he then was) in his majority reasons in
Jean Coutu
.

[71]

In
Jean Coutu
, the original transaction was intended to neutralize the
    effect of certain exchange rate fluctuations without adverse tax consequences.
    The appellant, under article 1425 of the
Civil Code of Québec
, brought
    a motion for rectification of the documents relating to certain transactions
    after they attracted unforeseen tax consequences. Wagner J., in upholding the
    decision of the Québec Court of Appeal refusing the remedy, addressed the
    policy considerations that militate against the courts retroactive amendment
    of parties agreements when unforeseen tax consequences result, at paras. 41 to
    43:

[A]ccepting [the appellants] position would require this Court
    to ignore the legal relationships that it and [its affiliate] originally agreed
    to create, and actually created, in favour of the tax consequences they sought
    to achieve. It would thus undermine one of the fundamental principles of our
    tax system: that tax consequences flow from the legal relationships or
    transactions established by taxpayers.

Equally, if taxpayers agree to and execute an agreement that
    produces unintended tax consequences, they must still be taxed on the basis of
    that agreement and not on the basis of what they could have done to achieve
    their intended tax consequences, had they been better informed. Tax
    consequences do not flow from contracting parties motivations or tax
    objectives.

I believe that allowing the
    amendment of the written documents in the instant appeal would amount to
    retroactive tax planning. It would set an undesirable precedent, where
    taxpayers could point to a common intention to effect their transactions on a
    tax-neutral basis to immunize themselves from unforeseen tax consequences. Such
    an intention would be common to many taxpayers and transactions, particularly
    where the parties are not at arms length. Allowing a general intention of tax
    neutrality to serve as a basis for retroactively modifying contracts would
    effectively enable many taxpayers to look to ar. 1425
C.C.Q
. as a kind
    of catch-all insurance for their inadvertence or mistakes, or for those of
    their tax advisors, in planning transactions.

[72]

The fact that CLICC entered into the Transaction to achieve a
    particular tax outcome does not remove it from the scope of impermissible
    retroactive tax planning, which is precluded by
Fairmont Hotels
and
Jean Coutu
. Both of these cases
    involved tax-driven transactions (in the sense that the choice of structure
    was informed by tax considerations), as did
Juliar
(where the application judge found that the transaction had to be
    carried out on a no immediate tax basis or not at all)
.
Whether the court is asked to rectify an agreement or to unwind
    transactions and replace them with other steps because of an error leading to
    an unplanned tax liability, the objective is to reverse the factual basis of
    the tax assessment, in order to defeat the tax liability that resulted from the
    original transaction. As both
Fairmont Hotels
and
Jean Coutu
emphasize, tax consequences flow
    from the transaction the taxpayer undertook, and not from its motivations or
    objectives.

[73]

Finally,
    in attempting to distinguish
Fairmont Hotels
, CLICC contends that the
    order that it now seeks in its cross-appeal would not involve the rectification
    of or any change to any
agreements
that formed part of the
    Transaction. There would be no re-writing of any agreement. Rather, it only
    wants to alter the steps taken following the agreements, to cancel the winding
    up of CLICC GP.

[74]

Again,
    this argument ignores the teaching of the Supreme Court in
Fairmont Hotels
,

that the court cannot substitute one series of transactions for another to
    avoid an unintended tax result. Nothing turns on whether the relief CLICC asks
    the court to grant involves the alteration of agreements, or the actual steps
    taken under the agreements to implement the transactions for which they
    provide.

[75]

I
    would also observe that, although
CLICC now says that the
    error it seeks to correct through the simplified order is the premature winding
    up of CLICC GP, in fact, the mistake has been consistently described throughout
    the proceedings as the failure to consider that s. 98(5) of the ITA applied to
    the dissolution of MAM LP. While the unintended tax rollover might be avoided
    by delaying the winding up of CLICC GP (that is, correcting the decision to
    wind up that entity), the mistake was in the structure of the Transaction
    that permitted the rollover to take effect.
This is the same kind of correction
    or rectification that the Supreme Court rejected in
Fairmont Hotels
and
Jean Coutu
and characterized as the rewriting of history in
    order to correct an error leading to an unforeseen tax liability.

(d)

TCR Holding
does
    not permit the retroactive alteration of transactions to correct unintended tax
    consequences

[76]

Finally, I turn to a consideration of this courts decision in
TCR
    Holding
. CLICC says that this case permits the court to
    retroactively alter a transaction in the exercise of its general authority to
    relieve against mistakes. The case involved an application to set aside an
    amalgamation where a numbered company, 846, had been included in error,
    resulting in TCR Holdings becoming liable on an obligation guaranteed by 846.
    The application judge set aside the amalgamation
nunc pro tunc
, on the basis of rectification, or alternatively, in the exercise
    of the courts equitable jurisdiction to relieve against a mistake. This court
    dismissed the appeal.

[77]

MacPherson J.A. concluded that rectification was not available
    because it would have violated the OBCA. He went on, however, to confirm the
    order of the court below on the alternative basis of the courts equitable
    jurisdiction to correct a mistake. He stated, at paras. 26 and 27:

Broadly speaking, a superior court has all the powers that are
    necessary to do justice between the parties: see
80 Wellesley St. East Ltd.
    v. Fundy Bay Builders Ltd.
,
[1972] 2
    O.R. 280
(C.A.), at p. 282. More specifically, superior courts have
    equitable jurisdiction to relieve persons from the effect of their mistakes:
    see
771225 Ontario Inc. v. Bramco Holdings Co.
(1995), 21
    O.R. (3d) 739
(C.A.), at p. 741.

This was the alternative basis for
    the application judges order. After reviewing the relevant evidence, he
    characterized the inclusion of a still debt-liable 846 in the amalgamation as an
    inadvertent mistake and, citing
Bramco
and this court's decision in
Attorney
    General of Canada v. Juliar
(2000), 50
    O.R. (3d) 728
, concluded that there was no reason not to grant the
    relief to TCR under this equitable jurisdiction to relieve against mistake. I
    see no basis for disagreeing with this analysis or with the application judges
    exercise of discretion in setting aside the amalgamation. The amalgamating
    companies agreed to the amalgamation based on the mistake that 846 was debt
    free.

[78]

TCR
    Holding
does not assist CLICC in its cross-appeal. The
    equitable jurisdiction of the court in that case was available to relieve
    against a mistake resulting in TCR Holdings assumption of an unintended
    liability to a creditor of 846 who had never bargained for such a benefit. It
    is unnecessary to attempt to define the outer limits of the equitable
    jurisdiction of the court to correct mistakes. The application in
TCR
    Holding
was not motivated by tax considerations, but to
    avoid an unintended windfall to a third party that would result from the
    mistake in including the insolvent debtor in an amalgamation. The tax
    authorities, although given notice, did not take a position on the application.
    The avoidance of unjust enrichment, and not unintended tax consequences, was
    the foundation of the courts intervention in equity.

[79]

In the present case, the only mistake to be corrected concerns the unintended
    tax consequences that prevented the Transaction from achieving its desired
    purpose.
Bramco
,

Fairmont Hotels
and
Jean
    Coutu
are consistent in prohibiting
    the
adjustment of a corporate transaction to
    relieve against mistakes leading to unintended tax consequences.

[80]

The relief CLICC seeks is simply rectification
    by another name. In
Harvest Operations Corp. v. Canada (Attorney
    General)
, 2017 ABCA 393, 61 Alta. L.R. (6th) 1, t
he very
    argument made by CLICC in this case, including an argument based on
TCR
    Holding
,

was rejected by the Alberta Court of
    Appeal.

[81]

In
    that case, the appellant's corporate predecessor entered into share acquisition
    and reorganization transactions. Because of an error by tax experts, the transactions
    attracted significant adverse tax implications for some of the entities
    involved even though they intended the transactions to be tax-neutral.
The court upheld the decision
of the court below that rectification of the underlying
    documentation was not available, as the application judge had applied
    essentially the same test that was subsequently recognized and applied by the
    Supreme Court in
Fairmont Hotels.
The
    appellate court considered the appellants alternative argument based on the
    alleged equitable jurisdiction of the court to relieve parties from the effect
    of their mistake. In rejecting this as a disguised attempt to avoid
Fairmont
    Hotels
, the court stated, at paras. 73 to 75:

The appellant asks us to adopt the opinion expressed by the Ontario
    Court of Appeal in
TCR Holding Corp. v. Ontario
to this effect: Broadly
    speaking, a superior court has all the powers that are necessary to do justice
    between the parties ... . More specifically, superior courts have equitable
    jurisdiction to relieve persons from the effect of their mistakes ... .

Without commenting on the merits of the assertion that a
    superior court has equitable jurisdiction to relieve persons from the effect
    of their mistakes, we fail to see how we can do this without undermining the
    rectification doctrine and ignoring the precedential value of
Fairmont
    Hotels
.

There is no principled basis, in
    the guise of exercising our equitable jurisdiction, to pump theoretical
    steroids into the rectification doctrine and give it the strength or force that
    the Supreme Court of Canada recently and consistently has declined to do. This
    is really what the appellant is asking us to do. [Footnotes omitted.]

[82]

I agree with these conclusions. While
Fairmont Hotels
does not preclude the exercise of the courts general equitable
    jurisdiction to relieve against mistakes in an appropriate case, as I have
    already explained, t
he rationale underlying the courts decisions in
Fairmont
    Hotels
and
Jean Coutu
prevents
    CLICC from invoking the courts general equitable jurisdiction to achieve the
    objective of avoiding an unintended tax consequence.

(2)

The order cannot be
    made through the equitable remedy of rescission

[83]

I
    turn first to the question whether the relief that CLICC seeks is the
    rescission of a voluntary disposition of property or of a contract. If it is
    the former, CLICC contends that the decisions in
Pitt v. Holt
and
Re
    Pallen Trust
are authorities for the court to grant rescission, even where
    the objective is to avoid unintended tax consequences.

[84]

Pitt
    v. Holt
and
Re Pallen
    Trust
both
involved the intervention
    of equity to permit the rescission of a voluntary settlement by a trustee.

[85]

In
Pitt v. Holt
, Ms. Pitt,

the settlor of a trust,
sought
    to have the court set aside the settlement, which involved the transfer of
    damages received as a result of Mr. Pitts car accident into a discretionary
    annuity trust established for his benefit. Tax was charged on the transfer
    after his death. It was alleged that neither the trustee nor her advisors took
    into account the inheritance tax consequences of the transfer.

[86]

The
    U.K. Supreme Court accepted, at para. 122, that where there had been a
    causative mistake of sufficient gravity that was basic to the transaction,
    rescission of a voluntary settlement could be ordered in rare cases, even where
    rectification could not be used to relieve a taxpayer from the error. This was
    one such case.
On the evidence, the court was entitled to find
    that Ms. Pitt had made a grave mistake in thinking that there would be no
    adverse tax consequences.

[87]

In
Re Pallen Trust
,

the B.C. Court of Appeal
    purported to follow
Pitt v. Holt
and granted rescission of a
    declaration and payment of dividends by a corporation to a trust which was a
    shareholder in the corporation. That distribution had resulted in adverse tax
    consequences. The court assumed that
Pitt v. Holt
was consistent with
    the law in Canada, and that the declaration and payment of dividends was a type
    of voluntary transfer of property to which equitable rescission could apply.

[88]

In
    my view, it is unnecessary to determine whether
Re Pallen Trust
is
good law following the Supreme Courts
    decision in
Fairmont Hotels
, or whether
Pitt v. Holt
should
    be followed in Ontario.

Even if such equitable jurisdiction exists,
    CLICCs characterization of the transfer of property from CLICC GP to CLICC as a
    voluntary distribution that was subject to a corporate directors exercise of
    discretion is inaccurate. This was not a gratuitous transfer; rather, CLICC
    GPs transfer of its assets occurred as part of a transaction between related
    entities. The transfer was effected under a contract (the General Conveyance
    and Assumption Agreement) where CLICC GP agreed for valuable consideration to
    sell, transfer, assign and set over to CLICC its right, title, interest and
    benefit of every nature in and to its undertaking, property, assets and rights.

[89]

The
    relief that CLICC seeks is more accurately described as rescission of a
    contract entered into by mistake. Accordingly, this courts decision in
Miller
    Paving Limited v. B. Gottardo Construction Ltd.
, 2007 ONCA 422, 313 O.A.C.
    137, governs. It requires the party seeking equitable rescission of a contract to
    establish that (a) the parties were under a common misapprehension as to the
    facts or their respective rights; (b) the misapprehension was fundamental; (c)
    the party seeking to set the contract aside was not itself at fault; and (d)
    one party will be unjustly enriched at the expense of the other if equitable
    relief is not granted (at paras. 23, 24, 26 and 31). None of these requirements
    apply in the present case, nor does CLICC attempt to bring itself within the
    requirements for equitable rescission of a contract.

[90]

Another
    impediment to the relief sought by CLICC is that rescission is an all or
    nothing remedy; partial rescission is not a recognized equitable remedy:
    G.H.L. Fridman,
The Law of Contract in Canada
,

6th ed. (Toronto:
    Carswell, 2011), at pp. 762 and 771-772. The purpose of rescission is to
    eliminate a benefit one party has received due to a mistake made by one or both
    parties to a contract. This is accomplished by cancelling and unwinding the
    contract and by issuing whatever ancillary orders are necessary to restore the
    parties to their original rights. Here, however, CLICC seeks to have only part
    of the Transaction rescinded, in order to generate a particular tax outcome. It
    does not ask the court to rescind the entire Transaction, and to restore it and
    its affiliates to their original rights, because to do so would not achieve its
    objective of triggering a loss to set off against its foreign exchange gains.

(3)

Equitable
    jurisdiction should not be invoked

[91]

In
    any event, this court should not exercise its equitable jurisdiction to relieve
    against mistake or to rescind aspects of the Transaction. I say this for two
    reasons.

[92]

First, CLICC has adequate alternative remedies to address the
    adverse tax consequences resulting from the mistake it relies on. As already
    noted, CLICC has filed a notice of objection to appeal its tax assessment,
    under s. 23 of the
Financial Administration Act
, it can apply to the Minister for a remission of tax, and it has a
    potential legal action against its professional advisor. The question is not whether
    CLICC will necessarily be successful in pursuing such alternative relief, but whether
    there is a remedy at law: see
Bramco
, at p.
    741;
JAFT Corp. v. Jones
, 2015 MBCA 77, 323
    Man. R. (2d) 57, at paras. 44-48; J.E. Martin and H.G. Hanbury,
Modern
    Equity
, 19th ed. (London: Sweet & Maxwell, 2012), at
    p. 35, and Jeffrey B. Berryman et al.,
Remedies Cases and Materials
, 7th ed. (Toronto: Emond, 2016), at p. 568.

[93]

Second, CLICC argues that the requested remedy is required to avoid
    its own unintended loss, and unjust enrichment to CRA. I agree with the
    Attorney General that, when examined closely, there is nothing that would
    warrant the intervention of equity as a result of the Transaction carried out
    by CLICC and its affiliates. CLICC sought to claim a $168 million tax loss
    without having to trigger a corresponding economic loss. Instead, the
    Transaction was structured in such a way as to attract the rollover provisions
    of the ITA, so that the intended goal was not achieved. This was an error made
    by CLICC as to the effect of the law. There is nothing inequitable about CLICC
    being taxed on what it did rather than on what it intended to achieve. And,
    the unjust enrichment that CLICC relies on here, including in its amended
    notice of cross-appeal and argument, is the alleged windfall gain to the CRA,
    which the Supreme Court in
Fairmont Hotels
explicitly
    rejected as the basis for equitable relief in such circumstances.


DISPOSITION

[94]

For
    these reasons, I would allow the appeal and dismiss the cross-appeal. I would
    set aside the order of Pattillo J. I would award the appellant its costs fixed in
    the amount agreed between the parties, $55,000, inclusive of disbursements and
    applicable taxes.

Released: RJS JUN 21 2018

K. van Rensburg
    J.A.

I agree. Robert J.
    Sharpe J.A.

I agree. Gloria
    Epstein J.A.


