Brick Protection Corp. v. Alberta (Provincial Treasurer) et al.,

• Judge: C,Costigan,Graesser
• Neutral Citation: 2011 ABCA 214
• Citation: 2011 ABCA 214,(2011), 510 A.R. 336,510 AR 336,(2011), 510 AR 336,510 A.R. 336
• Date: 03 May 2011
• Court: Court of Appeal (Alberta)

Brick Protection Corp. v. Alta. (2011), 510 A.R. 336; 527 W.A.C. 336 (CA)

MLB headnote and full text

Temp. Cite: [2011] A.R. TBEd. JL.146

The Brick Protection Corporation (respondent/plaintiff) v. Her Majesty the Queen as Represented by the Provincial Treasurer of Alberta and the Provincial Treasurer of Alberta (appellants/defendants)

(1003-0091-AC; 2011 ABCA 214)

Indexed As: Brick Protection Corp. v. Alberta (Provincial Treasurer) et al.

Alberta Court of Appeal

Côté and Costigan, JJ.A., and Graesser, J.(ad hoc)

July 21, 2011.

Summary:

The Brick Warehouse Corp. sold furniture, appliances and electronic equipment. Brick Protection Corp. sold protection plans to consumers who purchased items from the Brick. The plans were in addition to the manufacturer's warranty. In 1994, Alberta issued notices of assessment against Brick Protection for the years 1987 through 1993, assessing "insurance corporation tax" under the Insurance Corporations Tax Act (Alta.). Brick Protection appealed.

The Alberta Court of Queen's Bench, in a decision reported at (2009), 486 A.R. 65, allowed the appeal. Alberta appealed.

The Alberta Court of Appeal dismissed the appeal.

Insurance - Topic 704

Insurers - General - What constitutes an insurer - The Alberta Court of Appeal discussed whether a company that provided extended warranties to purchasers of appliances and furniture from a closely-held furniture company could be considered an "insurance company" within the meaning of the Insurance Corporations Tax Act (Alta.) - Actual practices and commercial reality were significant in the analysis - While extended warranty companies had been in existence for at least 25 years, the warranty business was not discussed in the Insurance Act (Alta.), nor in any of the insurance law textbooks - The Insurance Corporations Tax Act did not clearly cover the warranty business, either directly or via incorporation by reference of other legislation - There was ambiguity at best - While insurance typically involved outside risks created neither by the insurer nor the insured, extended warranties were the opposite - They covered only product failure due to defect in materials or workmanship and called only for repair or replacement - If repair or replacement was impossible, the extended warranty company was allowed to cancel the warranty and refund the price paid for it - This was almost the antithesis of insurance - Finally, true insurance involved a premium based on the risk being incurred - With the extended warranty, no inquiry was made as to how heavy or rough the particular purchaser's use would be or any previous loss history - Also, the warranty was transferable - That would be unique in the insurance industry - The court concluded that taking fees for extended warranties of appliances and furniture sold by a closely-related furniture company did not make the corporation liable to pay a tax on insurance companies - See paragraphs 1 to 65.

Words and Phrases

Insurance company - The Alberta Court of Appeal discussed the definition of "insurance company" as found in s. 87(1)(d) of the Insurance Corporations Tax Act, S.A. 1987, c. 36 - See paragraphs 1 to 65.

Cases Noticed:

R. v. Proulx (J.K.D.), [2000] 1 S.C.R. 61; 249 N.R. 201; 142 Man.R.(2d) 161; 212 W.A.C. 161; 2000 SCC 5, refd to. [paras. 15, 76].

Russo and Russo v. Field, Field and Menat Construction Ltd., [1973] S.C.R. 466; 34 D.L.R.(3d) 704, refd to. [para. 19].

Watts v. R., [2005] 2 C.T.C. 2384; 2004 D.T.C. 3111; 2004 TCC 535, refd to. [para. 27].

R. v. Anderson and Teskey, [1940] 3 W.W.R. 505 (Alta. C.A.), refd to. [para. 28].

Bell ExpressVu Limited Partnership v. Rex et al., [2002] 2 S.C.R. 559; 287 N.R. 248; 166 B.C.A.C. 1; 271 W.A.C. 1; 2002 SCC 42, refd to. [para. 31].

Rizzo & Rizzo Shoes Ltd. (Bankrupt), Re, [1998] 1 S.C.R. 27; 221 N.R. 241; 106 O.A.C. 1, refd to. [paras. 31, 73].

R. v. Craig (J.A.), [2009] 1 S.C.R. 762; 388 N.R. 254; 271 B.C.A.C. 1; 458 W.A.C. 1; 2009 SCC 23, refd to. [para. 31].

R. v. Neve (L.C.) (1999), 237 A.R. 201; 197 W.A.C. 201 (C.A.), refd to. [para. 31].

Chieu v. Canada (Minister of Citizenship and Immigration), [2002] 1 S.C.R. 84; 280 N.R. 268; 2002 SCC 3, refd to. [para. 32].

Heydon's Case, Re (1584), 3 Co. Rep. 7a; 76 E.R. 637, refd to. [para. 33].

Love et al. v. Subdivision and Development Appeal Board (Flagstaff (County)) (2002), 317 A.R. 261; 284 W.A.C. 261; 2002 ABCA 292, refd to. [para. 34].

Donoghue v. Stevenson, [1932] A.C. 562; 101 L.J.P.C. 119 (H.L.), refd to. [para. 43].

Grant v. Australian Knitting Mills Ltd., [1936] A.C. 85; [1936] 1 W.W.R. 145 (Aust. P.C.), refd to. [para. 43].

Boardwalk Reit LLP v. Edmonton (City) et al. (2008), 437 A.R. 347; 433 W.A.C. 347; 2008 ABCA 220, reh. den. (2008), 437 A.R. 222; 433 W.A.C. 222; 2008 ABCA 284, leave to appeal refused (2008), 392 N.R. 399; 469 A.R. 397; 470 W.A.C. 397 (S.C.C.), refd to. [para. 45].

Wilson v. Jones (1867), L.R. 2 Ex. 139 (Ex. Ch.), refd to. [para. 46].

Mason (V.K.) Construction Ltd. v. Bank of Nova Scotia and Courtot Investments Ltd., [1985] 1 S.C.R. 271; 58 N.R. 195; 8 O.A.C. 381, refd to. [para. 48].

BG Checo International Ltd. v. British Columbia Hydro and Power Authority, [1993] 1 S.C.R. 12; 147 N.R. 81; 20 B.C.A.C. 241; 35 W.A.C. 241; 14 C.C.L.T.(2d) 233, refd to. [para. 48].

Radhakrishnan v. University of Calgary Faculty Association et al. (2002), 312 A.R. 143; 281 W.A.C. 143; 2002 ABCA 182, refd to. [para. 48].

Grant, Smith & Co. and McDonnell Ltd. v. Seattle Construction & Dry Dock Co., [1920] A.C. 162; 48 D.L.R. 172 (P.C.), refd to. [para. 53].

Fraser (D.R.) & Co. v. Minister of National Revenue, [1949] A.C. 24 (P.C.), refd to. [para. 20].

D.R. Fraser & Co. - see Fraser (D.R.) & Co.

Homex Realty and Development Co. v. Wyoming (Village), [1980] 2 S.C.R. 1011; 33 N.R. 475, refd to. [para. 91].

Winnipeg (City) v. Morguard Properties Ltd. et al., [1983] 2 S.C.R. 493; 50 N.R. 264; 25 Man.R.(2d) 302, refd to. [para. 91].

Montréal (Ville) v. Civic Parking Centre Ltd. et al., [1981] 2 S.C.R. 541; 41 N.R. 393, refd to. [para. 91].

New Brunswick (Minister of Municipal Affairs) v. Bathurst Paper Ltd. (1971), 4 N.B.R.(2d) 96 (S.C.C.), refd to. [para. 95].

United States of America et al. v. Dynar (1997), 213 N.R. 321; 101 O.A.C. 321 (S.C.C.), refd to. [para. 95].

Royal Bank of Canada v. Saskatchewan Power Corp. et al. (1990), 86 Sask.R. 259 (C.A.), refd to. [para. 100].

Stubart Investments Ltd. v. Minister of National Revenue (1984), 53 N.R. 241 (S.C.C.), refd to. [para. 101].

Golden et al. v. Minister of National Revenue (1986), 65 N.R. 135 (S.C.C.), refd to. [para. 101].

Antosko v. Minister of National Revenue (1994), 168 N.R. 16 (S.C.C.), refd to. [para. 101].

Friesen v. Minister of National Revenue (1995), 186 N.R. 243 (S.C.C.), refd. to. [para. 101].

Minister of National Revenue v. Shell Canada Ltd. (1999), 247 N.R. 19 (S.C.C.), refd to. [para. 101].

Minister of National Revenue v. Alberta (Treasury Branches) et al., [1996] 1 S.C.R. 963; 196 N.R. 105; 184 A.R. 1; 122 W.A.C. 1, refd to. [para. 101].

Minister of National Revenue v. Canada Trustco Mortgage Co. (2005), 340 N.R. 1 (S.C.C.), refd to. [para. 103].

Imperial Oil Ltd. v. Minister of National Revenue (2006), 353 N.R. 201 (S.C.C.), refd to. [para. 104].

Johns-Manville Canada Inc. v. Minister of National Revenue (1985), 60 N.R. 244 (S.C.C.), refd to. [para. 105].

Placer Dome Canada Ltd. v. Ontario (Minister of Finance) (2006), 348 N.R. 148; 210 O.A.C. 342 (S.C.C.), refd to. [para. 105].

Québec (Communauté urbaine) et autres v. Corporation Notre-Dame de Bon Secours (1994), 171 N.R. 161; 63 Q.A.C. 161 (S.C.C.), refd to. [para. 105].

Statutes Noticed:

Insurance Corporations Tax Act, S.A. 1987, c. 36, sect. 86(1)(d) [para. 69].

Authors and Works Noticed:

Brown, Craig, and Menezes, Julio, Insurance Law in Canada (2nd Ed. 1991), pp. 6, § 1:2:3 [para. 112]; 7, § 1:2:5 [para. 51].

Cheshire, Geoffrey Chevalier, Fifoot, Cecil Hubert Stuart, and Furmston, Michael P., The Law of Contract (15th Ed. 2007), p. 21, § 1.28 [para. 48].

Côté, Pierre André, Interpretation of Legislation in Canada (3rd Ed. 2000), pp. 529, 530 [para. 88]; 531 [para. 90]; 532 [para. 93]; 537 [para. 91].

Couch on Insurance 3D, generally [para. 21]; § 1:20 [para. 38].

Hall, Geoff R., Canadian Contractual Interpretation Law (1st Ed. 2007), p. 243 [para. 48].

Holmes, Oliver Wendell, The Common Law, p. 1 [para. 14].

McCamus, John D., Essentials of Canadian Law: The Law of Contracts (2005), pp. 579 to 588 [para. 48].

Sullivan, Ruth, Sullivan on the Construction of Statutes (5th Ed. 2008), pp. 210 [para. 75]; 591 [para. 97]; 624 [para. 98].

Swan, Angela, Canadian Contract Law (2nd Ed. 2009), §§ 6-215, 6-259 [para. 48].

Treitel, Guenter H., The Law of Contract (12th Ed. 2007), pp. 238 to 239, § 7-001 [para. 48].

Counsel:

R.B. White, Q.C., and A.C. Bochinski, for the respondent/plaintiff;

J.H. Mayan and S.A. Bowes, for the appellants/defendants.

This appeal was heard on May 3, 2011, by Côté and Costigan, JJ.A., and Graesser, J.(ad hoc) of the Alberta Court of Appeal. On July 21, 2011, the court's reasons for judgment reserved were delivered, including the following opinions:

Côté, J.A. (Costigan, J.A., concurring) - see paragraphs 1 to 65;

Graesser, J.(ad hoc), concurring - see paragraphs 66 to 121.