Mathew v. Canada, [2005] 2 S.C.R. 643, 2005 SCC 55, 2005 SCC 55 (2005)

Extract

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Mathew v. Canada, [2005] 2 S.C.R. 643, 2005 SCC 55, 2005 SCC 55 (2005)

SUPREME COURT OF CANADA

Citation: Mathew v. Canada, [2005] 2 S.C.R. 643, 2005 SCC 55

Date: 20051019

Docket: 30067

Between:

Eugene Kaulius, Steven M. Cook, Charles E. Beil,

Craig C. Sturrock, Amalio De Cotiis, John N. Gregory,

347059 B.C. Ltd., Frank Mayer, John R. Owen,

Verlaan Investments Inc., William John Millar, NSFC

Holdings Ltd., TFTI Holdings Limited, Douglas H. Mathew,

Ian H. Pitfield, Estate of the late Lorne A. Green and

Innocenzo De Cotiis

Appellants v.

Her Majesty the Queen

Respondent

Coram: McLachlin C.J. and Major, Bastarache, Binnie, LeBel, Deschamps, Fish, Abella and Charron JJ.

Reasons for Judgment:

(paras. 1 to 64)

McLachlin C.J. and Major J. (Bastarache, Binnie, LeBel, Deschamps, Fish, Abella and Charron JJ. concurring)

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Mathew v. Canada, [2005] 2 S.C.R. 643, 2005 SCC 55

Eugene Kaulius, Steven M. Cook, Charles E. Beil,

Craig C. Sturrock, Amalio De Cotiis, John N. Gregory,

347059 B.C. Ltd., Frank Mayer, John R. Owen,

Verlaan Investments Inc., William John Millar, NSFC

Holdings Ltd., TFTI Holdings Limited, Douglas H. Mathew,

Ian H. Pitfield, Estate of the late Lorne A. Green and

Innocenzo De Cotiis Appellants v.

Her Majesty The Queen Respondent

Indexed as: Mathew v. Canada

Neutral citation: 2005 SCC 55.

File No.: 30067.

2005: March 8; 2005: October 19.

Present: McLachlin C.J. and Major, Bastarache, Binnie, LeBel, Deschamps, Fish, Abella and Charron JJ.

on appeal from the federal court of appeal

Income tax - Tax avoidance - Interpretation and application of general anti-avoidance rule - Company transferring unrealized losses to arm's length taxpayers through series of transactions involving partnerships - Taxpayers deducting those losses against their own income - Whether general anti-avoidance rule applicable to deny tax benefit - Income Tax Act, R.S.C. 1985, c. 1 (5th Supp.), ss. 18(13), 96(1), 245(4).

STC carried on a business which included the lending of money on the security of mortgages on real property. STC became insolvent and a liquidator was appointed. At that time, STC owned a portfolio of 17 non-performing loans with 9 underlying real estate properties having a fair market value of approximately $33 million. The cost to...

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