DELSO RESTORATION LTD., appellant, v. HER MAJESTY THE QUEEN,, 2011 TCC 435

Dockets: 2006-3802(IT)G 2006-3801(GST)I BETWEEN: DELSO RESTORATION LTD., appellant, and HER MAJESTY THE QUEEN, respondent . ____________________________________________________________________ Motion heard with the motions of Domenic Eramo (2006-3600(IT)

G) and Natalie Eramo (2006-3599(IT)

I) on August 12, 2009, at Toronto, Ontario . Before: The Honourable Justice Gaston Jorré Appearances : Counsel for the appellant: A. Christina Tari Leigh Somerville Taylor Counsel for the respondent: Bobby Sood ____________________________________________________________________ ORDER Upon motion made by the appellant; And upon hearing the parties; In accordance with the attached reasons for order, the motion is dismissed. Costs are in the cause. Signed at Ottawa , Ontario , this 20th day of September 2011. ​Gaston Jorré​ Jorré J.

Docket: 2006-3600(IT)G BETWEEN: DOMENIC ERAMO, appellant, and HER MAJESTY THE QUEEN, respondent. ____________________________________________________________________ Motion heard with the motions of Delso Restoration Ltd. (2006-3802(IT)G and 2006-3801(GST)

I) and Natalie Eramo (2006-3599(IT)

I) on August 12, 2009, at Toronto, Ontario . Before: The Honourable Justice Gaston Jorré Appearances : Counsel for the appellant: A. Christina Tari Leigh Somerville Taylor Counsel for the respondent: Bobby Sood ____________________________________________________________________ ORDER Upon motion made by the appellant; And upon hearing the parties; In accordance with the attached reasons for order, the motion is dismissed. Costs are in the cause. Signed at Ottawa , Ontario , this 20th day of September 2011. ​Gaston Jorré​ Jorré J. Docket: 2006-3599(IT)I

BETWEEN: NATALIE ERAMO, appellant, and HER MAJESTY THE QUEEN, respondent. ____________________________________________________________________ Motion heard with the motions of Delso Restoration Ltd. (2006-3802(IT)G and 2006-3801(GST)

I) and Domenic Eramo (2006-3600(IT)

G) on August 12, 2009, at Toronto, Ontario . Before: The Honourable Justice Gaston Jorré Appearances : Counsel for the appellant: A. Christina Tari Leigh Somerville Taylor Counsel for the respondent: Bobby Sood ____________________________________________________________________ ORDER Upon motion made by the appellant; And upon hearing the parties; In accordance with the attached reasons for order, the motion is dismissed. Costs are in the cause. Signed at Ottawa , Ontario , this 20th day of September 2011. ​Gaston Jorré​ Jorré J. Citation: 2011 TCC 435 Date: 20110920 Dockets: 2006-3802(IT)G, 2006-3801(GST)I

2006-3600(IT)G 2006-3599(IT)I BETWEEN: DELSO RESTORATION LTD., DOMENIC ERAMO, NATALIE ERAMO, appellants, and HER MAJESTY THE QUEEN, respondent. REASONS FOR ORDER Jorré J. Introduction [ 1 ] The appellants have applied for a determination of questions before trial pursuant to Rule 58 of the Tax Court of Canada Rules (General Procedure) , specifically: (

a) Were the assessments of Domenic Eramo and Natalie Eramo in issue in these appeals permitted by subsection 15(1) of the Income Tax Act ( Act ), as amended, as alleged by the respondent? (

b) Were the assessments of Mr. and Mrs. Eramo in issue in these appeals permitted by subsection 56(2) of the Act , as alleged by the respondent? [ 2 ] Neither of these questions affects the two appeals relating to Delso Restoration Ltd. (Delso), one of which is an income tax appeal and the other a GST appeal. [ 3 ] Throughout the remainder of these reasons, the discussion, unless otherwise noted, relates to the appeals of Mr. and Mrs. Eramo. Background [ 4 ] Based on the pleadings, the Minister reassessed the appellants​ 1995 taxation year, inter alia , on the following basis: [1] (

a) Mr. and Mrs. Eramo owned, respectively, 80% and 20% of Nadome Investments Ltd., a company which in turn is the parent corporation of Delso. (

b) Delso paid for various renovations on the home of Mr. and Mrs. Eramo, as well as for landscaping at the home of Mr. Eramo​s parents and deducted these costs in computing its expenses. (

c) These expenditures of some $90,000 plus GST were not made for the purpose of producing income.

(

d) At the direction of Mr. and Mrs. Eramo, the invoices for the renovation work were issued to Delso and were falsified in an effort to disguise the renovation costs as legitimate business expenses. (

e) The renovation costs were personal and living expenses of Mr. and Mrs. Eramo. (

f) Delso made no adjustments to the shareholder loan accounts. (

g) Neither Mr. nor Mrs. Eramo included any amount in their income in relation to benefits received in respect to the renovations and the landscaping. [ 5 ] The Minister also alleges in the replies that Mr. and Mrs. Eramo failed to include benefits with respect to the renovations and other personal expenditures that were appropriated from, or conferred by, Delso. [2] [ 6 ] The Minister included in the income of Mr. Eramo a benefit equal to 80% of the expenditures and, in the case of Mrs.

Eramo a benefit equal to 20% of the expenditures. [ 7 ] In the submissions portions of the replies, the respondent submits that Mr. and Mrs. Eramo received ​. . . benefits appropriated from, or conferred by, Delso, but which he [she] failed to include in his [her] income for that year.

The Minister correctly reassessed the Appellant​s 1995 taxation year to include the . . . unreported benefits in his [her] income, pursuant to subsections 15(1) and 56(2) of the Act .​ [3] [ 8 ] The Minister disallowed the deduction of the renovation and landscaping expenditures by Delso. [ 9 ] The four notices of appeal raise a variety of other issues including alleged charter violations and whether the 1995 taxation year was statute barred. Analysis Rule 58 [ 10 ] Rule 58 says: 58(1) A party may apply to the Court, (

a) for the determination, before hearing, of a question of law, a question of fact or a question of mixed law and fact raised by a pleading in a proceeding where the determination of the question may dispose of all or part of the proceeding, substantially shorten the hearing or result in a substantial saving of costs, or (

b) to strike out a pleading because it discloses no reasonable grounds for appeal or for opposing the appeal, and the Court may grant judgment accordingly.

(2) No evidence is admissible on an application, (

a) under paragraph (1)( a ), except with leave of the Court or on consent of the parties, or (

b) under paragraph (1)( b ).

(3) The respondent may apply to the Court to have an appeal dismissed on the ground that, (

a) the Court has no jurisdiction over the subject matter of an appeal, (

b) a condition precedent to instituting a valid appeal has not been met, or (

c) the appellant is without legal capacity to commence or continue the proceeding, and the Court may grant judgment accordingly. [ 11 ] The law is well settled that Rule 58 is not intended to provide an easily available right to have the determination of complex and contentious issues and that the rule is discretionary. [4] [ 12 ] There is a great deal of authority for the proposition that there must be no dispute as to facts [5] although much of this authority precedes the amendments made in 2004 which added to Rule 58(1)(

a) the following words: ​a question of fact or a question of mixed law and fact​. [ 13 ] Given those amendments the existence of a factual dispute cannot be an absolute bar to there being a determination under the rule. [6] [ 14 ] However, the existence of one or more factual disputes will always be relevant to the question whether the determination will substantially shorten the hearing or result in a substantial saving of costs. [ 15 ] Here, I am satisfied that there are significant factual disputes between the parties even if one excludes all the other issues raised by Mr. and Mrs.

Eramo apart from those relating to subsections 15(1) and 56(2) of the Act . On the pleadings, there are no admissions by Mr. and Mrs. Eramo of the facts assumed or alleged by the Minister in relation to subsections 15(1) and 56(2). [7] [ 16 ] However, in Canada v. Webster , [8] Rothstein J.A., speaking for the majority, states at paragraph 5 : 5 In Berneche , supra , at paragraph 7, Mahoney J.A. noted that the requirement that there be no dispute as to any material fact is often stated in terms of an agreement or admission of facts. However, agreement is not a requirement.

The Motions Judge may draw a conclusion that there are no material facts in dispute, and such conclusion might be drawn from the entire pleadings of the respondent on the motion, on the assumption that what has been pleaded is true, much as in the case of a motion to strike a statement of claim as disclosing no reasonable cause of action. . . . [9] [ 17 ] Although the motion does not say so explicitly, it is clearly implicit in the grounds set out in the motion [10] as well as the basis on which Mr. and Mrs.

Eramo argued the motion [11] that, for the purposes of the motion, the appellants are prepared to accept that the facts alleged in the replies are to be taken as true. [ 18 ] I will proceed on the basis that Mr. and Mrs.

Eramo have, for the purposes of the motion, admitted the allegations and assumptions set out in the replies. [ 19 ] Given the comments quoted from Webster , above, I cannot see any reason why the absence of agreement between the parties on the relevant facts would, in itself, preclude a determination of law where one party is prepared to accept, for the purposes of the motion, the allegations made by the other party as is the case here. [ 20 ] However, for reasons that will become apparent below, it is not, in fact, necessary for me to decide this point and I choose not to do so.

[ 21 ] If, assuming the allegations of the respondent to be true, the answer to the two proposed questions is ​no​, then the replies would not disclose any valid basis for the assessments in issue and the disputes might well come to an end. [12] [ 22 ] A key requirement of the rule is that the determination ​may dispose of all or part of the proceeding, substantially shorten the hearing or result in a substantial saving of costs​. (I shall refer collectively to the words just quoted as ​shorten the hearing​.) [ 23 ] Consequently for this purpose, it is relevant to ask if it is likely that the determination will shorten the hearing. [ 24 ] In this case, if the answer to either question is ​yes​, then the litigation will not be materially shorter since it will be necessary to deal with all the evidence relating to the conferring of benefits as well as all the other issues raised in the notices of appeal apart from subsections 15(1) and 56(2) of the Act . [13] [ 25 ] Accordingly, to answer the question ​Will the determination shorten the hearing?​, it is necessary to consider the law on the two proposed questions taking, for the purposes of the motion, the allegations and assumptions in the replies to be true. [ 26 ] I will begin with subsection 56(2). [14] [ 27 ] The essence of Mr. and Mrs.

Eramo​s argument with respect to the subsection 56(2) issue is that, in addition to the four generally accepted requirements for subsection 56(2) to apply, there is a fifth condition. [ 28 ] The four generally accepted conditions are: (1) the payment must be to a person other than the reassessed taxpayer; (2) the allocation must be at the direction or with the concurrence of the reassessed taxpayer; (3) the payment must be for the benefit of the reassessed taxpayer or for the benefit of another person whom the reassessed taxpayer wished to benefit; and (4) the payment would have been included in the reassessed taxpayer's income if it had been received by him or her. [15] [ 29 ] Mr. and Mrs.

Eramo argue that the fifth condition is that subsection 56(2) can only apply if the benefit conferred is not taxable in the hands of the transferee. Specifically, they submit that subsection 56(2) cannot apply because the contractors are taxable on the payments. [ 30 ] This additional condition is discussed in Smith v. M.N.R. [16] where Mahoney J.A. speaking for the Federal Court of Appeal said, at pages 262-263: . . . That, however, is not an end to the matter. This Court​s decision in Outerbridge Estate was rendered after the trial judgment herein.

It has added another precondition to the application of subsection 56(2), which seems to me to be relevant in the circumstances. It was held in Outerbridge , supra , at pages 117​18 (D.T.C. 6684), that the validity of an assessment under subsection 56(2) of the Act when the taxpayer had himself no entitlement to the payment made or the property transferred is subject to an implied condition, namely that the payee not be subject to tax on the benefit received.

That conclusion, obiter in the result, was based on the analysis by Marceau, J.A. that preceded it (C.T.C. 117, D.T.C. 6684). It is generally accepted that the provision of subsection 56(2) is rooted in the doctrine of ​constructive receipt​ and was meant to coverprincipally cases where a taxpayer seeks to avoid receipt of what in his hands would be income by arranging to have the amount paid tosome other person either for his own benefit (for example the extinction of a liability) or for the benefit of that other person [citationsomitted].

There is no doubt, however that the wording of the provision does not allow to its being confined to such clear cases of tax-avoidance. The Bronfman judgment, which upheld the assessment, under the predecessor of subsection 56(2), of a shareholder of aclosely held private company, for corporate gifts made over a number of years to family members, is usually cited as authority for theproposition that it is not a pre-condition to the application of the rule that the individual being taxed have some right or interest in thepayment made or the property transferred.

The precedent does not appear to me quite compelling, since gifts by a corporation come outof profits to which the shareholders have a prospective right. But the fact is that the language of the provision does not require, for itsapplication, that the taxpayer be initially entitled to the payment or transfer of property made to the third party, only that he would besubject to tax had the payment or transfer been made to him.

It seems to me however, that when the doctrine of constructive receipt is notclearly involved, because the taxpayer had no entitlement to the payment being made or the property being transferred, it is fair to inferthat subsection 56(2) may receive application only if the benefit conferred is not directly taxable in the hands of the transferee.

Indeed,as I see it, a tax-avoidance provision is subsidiary in nature; it exists to prevent the avoidance of a tax payable on a particulartransaction, not simply to double the tax normally due nor to give the taxing authorities an administrative discretion to choose betweenpossible taxpayers. [Emphasis added.] While I might have distinguished Bronfman on further or other grounds, since the benefit to the shareholders of having personal giftspaid for by the company with pre-tax dollars over the shareholders themselves paying for them with after-tax dollars seems transparentlyclear, I agree with that analysis.

Being ​subject to tax on the benefit received​ means that it is required to be included in the calculation ofthe recipient​s taxable income. [31] In considering the application of subsection 56(2) it is important to emphasize the third condition: ​for the benefit of thereassessed taxpayer or for the benefit of another person whom the reassessed taxpayer wished to benefit​ (emphasis added).

Thesubsection is concerned with the conferring of a benefit on someone. [32] It is also useful to bear in mind the purpose of subsection 56(2), as explained by the Supreme Court of Canada in Canada v.McClurg:[17] Subsection 56(2) of the Income Tax Act In attempting to discern the purpose of s. 56(2), it is helpful to refer to the body of jurisprudence dealing with the subsection. A usefulstarting point is an early case dealing with the predecessor

section to s. 56(2): Miller v. M.N.R., (CA EXC), 62 D.T.C.1139 (Ex. Ct.). In that case, Thurlow J., as he then was, in examining s. 16(1) of the Act, made some general comments, at p. 1147, as tothe anti-avoidance purpose of the provision which remain relevant today: In my opinion, s. 16(1) is intended to cover cases where a taxpayer seeks to avoid receipt of what in his hands would be income byarranging to have the amount received by some other person whom he wishes to benefit or by some other person for his own benefit.

The scope of the subsection is not obscure for one does not speak of benefitting a person in the sense of the subsection by making abusiness contract with him for adequate consideration. Strayer J. noted, at p. 4, in respect of the Miller case: Two important qualifications are noted here: the first is that the taxpayer seek ​to avoid receipt​ of funds, presumably funds that wouldotherwise be payable to him; and the second is that the concept of payment of a ​benefit​ is contrasted to payments for adequateconsideration. In my opinion, the views of Thurlow J. and Strayer J. provide a sound foundation for the

interpretation of s. 56(2). The subsectionobviously is designed to prevent avoidance by the taxpayer, through the direction to a third party, of receipts which he or she otherwisewould have obtained. I agree with both Thurlow J. and Strayer J. in their characterization of the purpose of the

section and, specifically, Iconcur with their view that the

section reasonably cannot have been intended to cover benefits conferred for adequate consideration in

the context of a legitimate business relationship. [ 33 ] In M.N.R. v. Neuman , [18] the Federal Court of Appeal stated that there was no general requirement of a fifth condition being met. [ 34 ] The circumstances of Outerbridge Estate v. Canada [19] and Smith are important. [ 35 ] In Outerbridge , Sir Leonard Outerbridge caused a company he controlled to sell shares to his son-in-law for less than their fair market value.

The appellant had argued that the son-in-law was taxable on the benefit under subsection 15(1) and that the law was not intended to tax the benefit twice. [ 36 ] While the Court of Appeal found the son-in-law was not taxable under subsection 15(1) because the benefit was conferred on the son-in-law in his capacity as a son-in-law, it accepted the principle that if the son-in-law had received this in his capacity as shareholder then subsection 15(1) would have applied to him and subsection 56(2) would not have applied to Sir Leonard.

The Court of Appeal was satisfied that what had been conferred was a benefit. [ 37 ] In Smith the facts are somewhat complicated. However, when one goes back to the judgment of Addy J. at trial [20] it is very clear that, with respect to the amounts which the Court of Appeal held to be taxable, there was a finding that these amounts had been received as benefits by the transferee ​Holiday 77​. [21] That finding was upheld on appeal. [ 38 ] The Court of Appeal also found in Smith , at page 263, [22] that the amounts received by the transferee, ​Holiday 77​, as benefits were taxable.

The amounts received by the transferee were not earned by the transferee as consideration for services rendered or goods supplied. [ 39 ] In Outerbridge and Smith , the payments to the transferees were taxable benefits because the payments were not made in return ​for adequate consideration in the context of a legitimate business relationship​. [23] [ 40 ] In both Outerbridge and Smith , the recipient of the payment or the property happened to also be the person on whom a benefit was conferred. [24] [ 41 ] Where the recipient of the payment or the transferred property is simply receiving payment in return for adequate consideration (the supply of goods or services), there is no benefit being conferred on the recipient of the payment. [ 42 ] Those factual circumstances assist in understanding Smith , at page 263: [25] . . . subsection 56(2) may receive application only if the benefit conferred is not directly taxable in the hands of the transferee .

Indeed, as I see it, a tax-avoidance provision is subsidiary in nature; it exists to prevent the avoidance of a tax payable on a particular transaction, not simply to double the tax normally due nor to give the taxing authorities an administrative discretion to choose between possible taxpayers. . . . Being ​subject to tax on the benefit received​ means that it is required to be included in the calculation of the recipient's taxable income . [Original italicized. Underlining added.] The ​it​ in the second to last line of the preceding quotation is clearly a reference to the word ​benefit​.

[ 43 ] As stated in McClurg : ​The subsection obviously is designed to prevent avoidance by the taxpayer, through the direction to a third party, of receipts which he or she otherwise would have obtained.​ [26] If the ​fifth condition​ in Outerbridge and Smith were that subsection 56(2) is inapplicable when the recipient of the payment is obliged to include the payment in his income, then the subsection would be largely ineffective. [ 44 ] This is easily illustrated by the following example. ​A​ [27] causes company ​X​ to pay company ​Y​, an electronics store, for the purchase of the television to be delivered to ​A​.

Since ​Y​ sells the television in the course of its normal business, the receipt would enter into its computation of taxable income and subsection 56(2) would be inapplicable if the correct approach is that subsection 56(2) can have no application where the recipient is taxable. That would largely defeat the purpose of the subsection as stated by the Supreme Court of Canada in McClurg . [ 45 ] Nothing in subsection 56(2) supports such an

interpretation. In Outerbridge and Smith it was unnecessary to distinguish between (

i) the recipient of the payment (or transferee of the property) and (ii) the person intended to receive the benefit; in Outerbridge and Smith they were one and the same person.

As a result it was not necessary in those decisions to make a distinction between the recipient and the beneficiary. [ 46 ] However, where the recipient and the beneficiary are different persons when one considers the wording of the subsection and the comments cited above in McClurg as to the purpose of the provision, it becomes apparent that the additional condition, the fifth condition, should be restated in circumstances such as this case in the following manner: 1.

Where the first four conditions are met, 2. where the taxpayer has no pre-existing entitlement to the payment or property, 3. where a benefit is conferred on a person other than the taxpayer and 4. that benefit is taxable as a benefit in the hands of that other person under some other provision of the Act , then the benefit conferred will only be taxable once, in the hands of the actual recipient of the benefit (that other person). It cannot be taxed a second time under subsection 56(2). [ 47 ] This is entirely consistent with the purpose of subsection 56(2) as set out in McClurg above.

If a taxpayer buys a gift for his child and pays for the gift with money he appropriated from a corporation he owns, the taxpayer will be taxable on the appropriated funds notwithstanding the fact that the supplier of the gift will be taxable on the sale of the gift to the taxpayer as part of his normal business income. [ 48 ] Similarly, under subsection 56(2) the taxpayer who directs a corporation to buy a gift for his child and send the gift to his child is taxable on the amount spent by the corporation; this liability of the taxpayer is not affected by the fact that the supplier of the gift is taxable on the sale of the gift. [28] [ 49 ] This is a very different situation from the situation in Outerbridge where, if the son-in-law had been taxable in his capacity as a shareholder, then there might [29] have been taxation of the same benefit twice. [30] [ 50 ] In this case, no benefit was conferred on the contractors doing renovations or making improvements to Mr. and Mrs.

Eramo​s residence, nor was any benefit being conferred on the contractors doing landscaping on the house of Mr. Eramo​s parents. The recipients of the benefit were Mr. and Mrs. Eramo as well as Mr. Eramo​s parents. [ 51 ] The contractors were simply receiving payments for services supplied in the normal course of business. [ 52 ] Accordingly, to the extent that there is a fifth condition, it does not have application here, given the facts I must assume.

[ 53 ] With respect to subsection 56(2), the appellants made a further argument that, on the face of the respondent​s pleadings, the fourth condition was not met insofar as the respondent did not plead that the amounts in question would have been included in the income of Mr. and Mrs. Eramo if the amounts had been received by them. [ 54 ] The difficulty with this submission is the following. [ 55 ] For these purposes I must assume that it is not a shareholder benefit [31] nor an employee benefit, [32] both of which would be taxable if that were the nature of what happened.

Taking the respondent​s allegations as a given, they amount to Mr. and Mrs. Eramo having indirectly appropriated over $90,000 from Delso to their benefit [33] by causing Delso to pay for the renovations and landscaping. [ 56 ] For the purposes of the fourth condition one has to analyze the situation as if Mr. and Mrs. Eramo had received the $90,000 themselves instead of the funds being paid to contractors. [ 57 ] Had Mr. and Mrs.

Eramo received the $90,000 it could not have been the reimbursement of a loan or a return of share capital, nor could it have been a gain from the disposition of something to the company. [34] [ 58 ] It would purely and simply have been an appropriation to themselves directly of corporate assets to which they had no legal right. [ 59 ] Delso, like any companies, is a separate legal entity; the fact that Mr. and Mrs. Eramo may own Delso directly or indirectly does not mean that they have any right to simply take any asset of the corporation.

For them to validly acquire any corporate assets there must be a valid corporate decision which results in a transfer of the assets. [ 60 ] For example there must be a corporate decision to effect a return of capital, the payment of dividends, a loan to someone or the payment of bonuses to employees, etc. Such decisions are normally recorded in some way and show up in the corporate records. For example, a loan to a shareholder will be recorded in a shareholder loan account. [ 61 ] Here, based on the allegations which I must assume for these purposes, there is nothing like that.

There are allegedly false invoices to disguise the purpose of the payments.

Even if the appellants are officers of the corporation, given the obligations that they have to the corporation in corporate law, they could not be validly acting on behalf of the corporation in making payments justified with false invoices that hide the fact of their benefiting from the payments. [ 62 ] As a result, if the appellants appropriated the $90,000 directly to themselves in such circumstances they could not be doing so in any capacity as officers, employees or shareholders; they would be doing so in their capacity as individuals without the company having validly authorized such a payment from a corporate law perspective. [ 63 ] Such an appropriation of property to which a person has no legal right is income and is taxable.

The fact that they may be under legal obligation to account for the income to the corporation does not change the fact that the appropriation has the quality of income in the hands of Mr. and Mrs. Eramo. [35] [ 64 ] As a result the allegations in the replies provide sufficient facts to support the fourth condition. [ 65 ] Thus, the answer to the second question is: Yes, subsection 56(2) does form a basis for the assessments, on the assumption that the allegations in the replies are true. [ 66 ] Consequently, the proposed determinations are unlikely to significantly shorten the hearing.

[ 67 ] In the circumstances, given this conclusion it is unnecessary for me to consider the first question. [36] Conclusion [ 68 ] Accordingly, it is not appropriate to order a determination and the motion will be dismissed. [ 69 ] Costs will be in the cause. Signed at Ottawa , Ontario , this 20th day of September 2011. ​Gaston Jorré​ Jorré J. CITATION: 2011 TCC 435 COURT FILE NOS.: 2006-3802(IT)G, 2006-3801(GST)I 2006-3600(IT)G 2006-3599(IT)I STYLE OF CAUSE: DELSO RESTORATION LTD., DOMENIC ERAMO, NATALIE ERAMO v.

HER MAJESTY THE QUEEN PLACE OF HEARING: Toronto , Ontario DATE OF HEARING: August 12, 2009 REASONS FOR ORDER BY: The Honourable Justice Gaston Jorré DATE OF ORDER: September 20, 2011 APPEARANCES:

Counsel for the appellants: A. Christina Tari Leigh Somerville Taylor Counsel for the respondent: Bobby Sood COUNSEL OF RECORD: For the appellants: Name: A. Christina Tari Firm: Richler and Tari Toronto , Ontario For the respondent: Myles J. Kirvan Deputy Attorney General of Canada Ottawa , Ontario