From Sham to Reality: Should a Wrong Be Taxed as a Right?

2010 ◽  
Vol 55 (1) ◽  
pp. 123-150
Author(s):  
Chris Sprysak
Keyword(s):  
Traditional Approach ◽  
Case Law ◽  
Federal Court ◽  
Third Party ◽  
Tax Law ◽  
Legal Effect ◽  
The Subject ◽  
Tax Benefits ◽  
Court Of Appeal ◽  
As If

How should a sham be treated for tax purposes? In 1524994 Ontario Ltd. v. M.N.R., the Federal Court of Appeal treated a sham as if it reflected the true agreement between the parties in order to uphold a GST assessment. The result was inconsistent with existing jurisprudence and undesirable. Courts should apply the law to the true facts only, and should not overlook or give effect to a sham in order to achieve the desired juridical consequences. The author reviews the origins and development of the sham doctrine and introduces a three-part typology of sham cases. In situations like 1524994 Ontario Ltd. v. M.N.R., the sham is intended to obtain non-tax benefits from a third-party victim, but in the process triggers unintended tax consequences, which are the subject of litigation. Although the traditional approach in Continental Bank Leasing Corp. v. M.N.R. (under which recharacterization is permissible only if the label attached to a transaction does not reflect its actual legal effect) could result in non-payment of taxes and retention of improperly obtained benefits, the author concludes that this result would be preferable to that of the Federal Court of Appeal judgment. Treating a sham as real, and taxing a wrong as a right (1) will not deter parties from creating shams to obtain non-tax benefits, (2) will violate longstanding principles that tax law be applied with neutrality and equity and without considering its effects, and (3) will increase uncertainty and inconsistency in the case law.

15. Duress, undue influence, and unconscionable bargains

2019 ◽  
pp. 702-760
Author(s):  
Robert Merkin ◽  
Séverine Saintier
Keyword(s):  
Case Law ◽  
The Other ◽  
Third Party ◽  
Undue Influence ◽  
Financial Position ◽  
Legal Effect ◽  
The Subject ◽  
The Relationship ◽  
Selection Of ◽  
Made In

The Casebook series provides a comprehensive selection of case law that addresses all aspects of the subject encountered on undergraduate courses. This chapter examines further vitiating factors which relate to the way in which the contract was entered into and render it voidable. It discusses the doctrines of duress and undue influence and whether contracts are affected by a general doctrine of unconscionability relating to the manner of formation and content relative to the nature and position of the contracting parties. The doctrine of economic duress allows for any contract to be set aside where unlawful threats to financial position were made in order to secure agreement. This doctrine is still evolving but represents a mechanism to prevent the enforceability of promises not freely given. Under the doctrine of undue influence, a contract may be set aside if one party has put unfair and improper pressure on the other in the negotiations leading up to the contract. The courts of equity have developed undue influence as one of the grounds of relief to prevent abuse of the influence of one person over another, particularly where the influence results from the nature of the relationship between the parties. The chapter examines types of undue influence, actual undue influence, presumed (or evidential) undue influence, undue influence exercised by a third party, the legal effect of undue influence, and the relationship between undue influence and unconscionability.

10. Duress, undue influence, and unconscionable bargains

2021 ◽  
pp. 507-564
Author(s):  
Robert Merkin ◽  
Séverine Saintier
Keyword(s):  
Case Law ◽  
Contract Law ◽  
The Other ◽  
Third Party ◽  
Undue Influence ◽  
Legal Effect ◽  
The Subject ◽  
The Relationship ◽  
Selection Of ◽  
Made In

Poole’s Casebook on Contract Law provides a comprehensive selection of case law that addresses all aspects of the subject encountered on undergraduate courses. This chapter examines further vitiating factors which relate to the way in which the contract was entered into and render it voidable. It discusses the doctrines of duress and undue influence and whether contracts are affected by a general doctrine of unconscionability relating to the manner of formation and content relative to the nature and position of the contracting parties. The doctrine of economic duress allows for any contract to be set aside where unlawful threats to financial position were made in order to secure agreement. This doctrine is still evolving but represents a mechanism to prevent the enforceability of promises not freely given. Under the doctrine of undue influence, a contract may be set aside if one party has put unfair and improper pressure on the other in the negotiations leading up to the contract. The courts of equity have developed undue influence as one of the grounds of relief to prevent abuse of the influence of one person over another, particularly where the influence results from the nature of the relationship between the parties. The chapter examines types of undue influence, actual undue influence, presumed (or evidential) undue influence, undue influence exercised by a third party, the legal effect of undue influence, and the relationship between undue influence and unconscionability.

Company Directors: Duties, Liabilities, and Remedies

2017 ◽  
Keyword(s):  
Case Law ◽  
Third Party ◽  
Court Decisions ◽  
Cayman Islands ◽  
Market Abuse ◽  
Company Directors ◽  
The Law ◽  
The Uk ◽  
Law And Legislation ◽  
Court Of Appeal

This is a new edition of the established authority on the law relating to directors of companies incorporated under the UK Companies Acts. The new edition features all important developments in the law including the Small Business, Enterprise and Employment Act 2015 which improves transparency (including requiring directors to be natural persons unless exceptions apply), simplifies company filing requirements, clarifies the application of general duties to shadow directors, modernises directors’ disqualification and reforms insolvency law to facilitate proceedings where there has been wrongdoing. There has been a wealth of new case law relevant to directors’ duties before the English courts, all of which are analysed and explained, including the Supreme Court decisions in Prest v Petrodel Resources, Jetivia v Bilta (UK), FHR European Ventures v Cedar Capital Partners and Eclairs Group v JKX Oil & Gas, the Court of Appeal decisions in Smithton Ltd v Naggar and Newcastle International Airport v Eversheds as well as the important High Court decisions in Universal Project Management Services v Fort Gilkicker, Madoff Securities International v Raven and the wrongful trading case, Re Ralls Builders. Non-UK cases are also analysed including Weavering Macro Fixed Income Fund Ltd v Peterson in the Cayman Islands’ Court of Appeal and the 2016 decision of the Hong Kong Court of Final Appeal Chen v Jason. In keeping with developments in case law and legislation the book now includes expanded coverage of multiple derivatives claims, directors’ exposure to third party claims and a new chapter on civil remedies for market abuse. The third edition is a complete reference work on the law relating to company directors and is the first port of call for all serious corporate lawyers and scholars on this subject.

7. Privity of contract and third party rights

2021 ◽  
pp. 307-358
Author(s):  
Robert Merkin ◽  
Séverine Saintier
Keyword(s):  
Common Law ◽  
Case Law ◽  
Contract Law ◽  
Third Parties ◽  
Third Party ◽  
The Third ◽  
The Subject ◽  
The Common ◽  
Contractual Obligations ◽  
Privity Of Contract

Poole’s Casebook on Contract Law provides a comprehensive selection of case law that addresses all aspects of the subject encountered on undergraduate courses. This chapter examines privity of contract, its relationship with consideration, and the ability of third parties to enforce contractual provisions for their benefit. The doctrine of privity of contract provides that the benefits of a contract can be enjoyed only by the parties to that contract and only parties can suffer the burdens of the contract. At common law, third party beneficiaries could not enforce a contractual provision in their favour so various devices were employed seeking to avoid privity. Statute now allows for direct third party enforcement but in limited circumstances. This chapter examines the background to privity and the attempted statutory reform in the Contracts (Rights of Third Parties) Act 1999 as it has been interpreted in the case law. The chapter also discusses the common law means of avoiding privity as illustrated by the case law, e.g. agency, collateral contracts, and trusts of contractual obligations. Finally, it assesses the remedies available to the contracting party to recover on behalf of the third party beneficiary of the promise, including the narrow and broad grounds in Linden Gardens Trust. It concludes by briefly considering privity and burdens—and the exceptional situations where a burden can be imposed on a person who is not a party to the contract.

scholarly journals A “Guerra Fiscal” e a Proteção da Confiança

2012 ◽  
Vol 7 (1) ◽  
Author(s):  
Juliana Gilioli
Keyword(s):  
Legal System ◽  
Tax Law ◽  
Practical Issue ◽  
The Subject ◽  
Tax Benefits ◽  
Legal Security

Resumo: O presente trabalho tem por objeto o estudo dos efeitos da concessão unilateral de benefícios fiscais pelos entes federativos aos contribuintes, diante do sistema jurídico brasileiro, de modo a verificar se os contribuintes beneficiados pelos incentivos inválidos estão protegidos pelo Direito. O tema tem especial relevância, visto que a concessão unilateral de benefícios fiscais pelos entes federativos, especialmente relacionados ao ICMS, é o principal fator desencadeador da “Guerra Fiscal”. O trabalho enfrenta, assim, o tema prático que é a concessão de benefícios fiscais, como objeto de proposição crítica-descritiva. Para tanto, inicialmente, situa-se o estudo no atual contexto brasileiro e, então, propõe-se uma análise dos princípios que informam a Constituição que mais guardam relação com o objeto deste trabalho: princípio da segurança jurídica e princípio da proteção da confiança. Por fim, passa-se a verificar os efeitos da concessão unilateral dos benefícios fiscais perante os princípios analisados, notadamente do princípio da proteção da confiança do contribuinte. Palavras-chave: Segurança Jurídica; Proteção da Confiança; Guerra Fiscal; Benefícios Fiscais; Direito Tributário. Abstract: The subject of this paper is the study of the tax benefits unilaterally granted by federative units to taxpayers on the Brazilian legal system, in order to verify if the taxpayers benefited by the tax illegal incentives are protected by law. The theme is especially relevant, since the tax benefits unilaterally granted by federative units, especially related to ICMS, is the main trigger of the "Tax War". The paper analyzes the practical issue that is the tax benefits granting, such as critical and descriptive proposition. Therefore, initially, the study lies in the current Brazilian context and then proposes an analysis of the Constitution principles that most are related to the object of this paper: the principle of legal security and the principle of protection of trust. Finally, the paper verifies the effects of tax benefits unilaterally granted regarding the analyzed principles, specially the principle of protection of trust.  Keywords: Legal Security; Protection of Trust; Tax War; Tax Benefits; Tax Law.

The Church and the Tax Law: Keeping Church and State Separate

2015 ◽  
Vol 13 (1) ◽  
pp. 36-53
Author(s):  
Mary Ann Hofmann
Keyword(s):  
Nonprofit Organizations ◽  
Federal Government ◽  
Church And State ◽  
Federal Court ◽  
Establishment Clause ◽  
Political Activity ◽  
Tax Law ◽  
Tax Benefits ◽  
Financial Transactions ◽  
The Church

ABSTRACT In a democracy characterized by the separation of church and state, what role does the federal government play in regulating the activities and the financial transactions of churches and other religious nonprofit organizations? What are the current federal requirements regarding tax exemption for churches, tax deductibility of donations to churches, and political activity by churches, and are these requirements justified? Rather than interfering with the free exercise of religion, does the federal government actually come closer to violating the establishment clause of the First Amendment by providing inappropriate tax benefits to churches and clergy? This paper discusses tax laws and federal court decisions relating to these and other issues.

scholarly journals Enforcement of Insurance Contracts by or on behalf of Third Parties

1996 ◽  
Vol 26 (4) ◽  
pp. 653
Author(s):  
David B Brian
Keyword(s):  
Case Law ◽  
Third Parties ◽  
Third Party ◽  
Insurance Contracts ◽  
Insurance Policies ◽  
Court Of Appeal

The object of this article is to identify and analyse various actions which may assist a third party who is refused indemnification by an insurer on the ground that s/he was not privy to the contract of insurance. Enforcement of the contract pursuant to the Contracts (Privity) Act 1982 is identified as the most appropriate option that is potentially available to a third party. However, in order for the Act to apply to insurance policies, it will be necessary for the Court of Appeal to overrule or distinguish a body of case law on the Act which has arisen from cases concerning nominees.

Looking Ahead

2015 ◽  
Author(s):  
Michael Ashdown
Keyword(s):  
Supreme Court ◽  
Case Law ◽  
Future Developments ◽  
The Supreme Court ◽  
Enormous Amount ◽  
Independent Life ◽  
The Subject ◽  
Breach Of Duty ◽  
Extensive Body ◽  
Court Of Appeal

The Supreme Court’s decision in Pitt v Holt and Futter v Futter is now the crucial landmark in the life of the Re Hastings-Bass doctrine. Lord Walker’s judgment, together with Lloyd LJ’s in the Court of Appeal, will continue to be the subject of debate and criticism, and there certainly remain detailed technical questions which will require close judicial attention in future. But it has achieved an enormous amount in reformulating the Re Hastings-Bass rule so as to accord with the essential principles of English trusts law: it has now been put beyond doubt that it is a duty- (rather than results-) oriented rule, which can be invoked only on proof of the trustees’ breach of duty, and the consequence of which is to render the impugned exercise of power or discretion voidable. The tangled case law of the 1990s and 2000s has been swept away by the Supreme Court, and as yet it has not been replaced by an extensive body of case law applying that decision and filling in the gaps—although that will doubtless follow. As such, this is an opportune moment at which to look at the Re Hastings-Bass rule more broadly, to examine the processes through which it has been, and will continue to be, moulded and refined, and to consider likely future developments. In this respect it is also useful to look beyond the English courts to see how the Re Hastings-Bass rule has fared offshore, and the extent to which it has taken on an independent life, divergent from the English experience.

11. Privity of contract and third party rights

2019 ◽  
pp. 519-570
Author(s):  
Robert Merkin ◽  
Séverine Saintier
Keyword(s):  
Common Law ◽  
Case Law ◽  
Third Parties ◽  
Third Party ◽  
The Third ◽  
The Subject ◽  
The Common ◽  
Contractual Obligations ◽  
Privity Of Contract ◽  
Selection Of

The Casebook series provides a comprehensive selection of case law that addresses all aspects of the subject encountered on undergraduate courses. This chapter examines privity of contract, its relationship with consideration, and the ability of third parties to enforce contractual provisions for their benefit. The doctrine of privity of contract provides that the benefits of a contract can be enjoyed only by the parties to that contract and only parties can suffer the burdens of the contract. At common law, third party beneficiaries could not enforce a contractual provision in their favour so various devices were employed seeking to avoid privity. Statute now allows for direct third party enforcement but in limited circumstances. This chapter examines the background to privity and the attempted statutory reform in the Contracts (Rights of Third Parties) Act 1999 as it has been interpreted in the case law. The chapter also discusses the common law means of avoiding privity as illustrated by the case law, e.g. agency, collateral contracts, and trusts of contractual obligations. Finally it assesses the remedies available to the contracting party to recover on behalf of the third party beneficiary of the promise, including the narrow and broad grounds in Linden Gardens Trust. It concludes by briefly considering privity and burdens—and the exceptional situations where a burden can be imposed on a person who is not a party to the contract.

scholarly journals Separate but Unequal: Immigration Detention in Canada and the Great Writ of Liberty

2018 ◽  
Vol 63 (1) ◽  
pp. 1-44
Author(s):  
Siena Anstis ◽  
Joshua Blum ◽  
Jared Will
Keyword(s):  
Emergency Preparedness ◽  
Case Law ◽  
Federal Court ◽  
Habeas Corpus ◽  
Legal Regime ◽  
Immigration Detention ◽  
Indefinite Detention ◽  
The Right ◽  
The Impact ◽  
Court Of Appeal

Canada maintains a separate legal regime for immigration detainees who, until recently, were denied the right to seek release by way of habeas corpus. This denial of one of the most deeply entrenched rights at common law and under the Canadian Charter of Rights and Freedoms was justified by the proposition that the immigration detention scheme is “separate but equal”—that it provides an adequate remedy such that habeas corpus is not necessary. Perhaps unsurprisingly, this “separate but equal” regime has failed to provide basic procedural and substantive protections that are available in other Canadian legal regimes where liberty is at stake. However, in 2015, the Court of Appeal for Ontario reignited the availability of habeas corpus as a remedy to indefinite detention in the immigration context in Chaudhary v. Canada (Public Safety and Emergency Preparedness). By reversing a line of cases that had confined immigration detainees to review by an administrative tribunal and judicial review in the Federal Court, Chaudhary has opened the door to the superior courts for immigration detainees. This article provides a review of the immigration detention system in Canada, the applicable legislation, procedures, and case law, and canvasses the impact of Chaudhary on the rights of immigration detainees. It then considers the benefits of habeas corpus as a litigation strategy, the role it has played in debunking the “separate but equal” myth, and suggests other potential issues now ripe for further litigation.

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