A mistaken impression on the part of a Fairmont Hotel Inc. executive in 2007 will see a large tax payment to the Canada Revenue Agency, the result of a recent judgment by the Supreme Court of Canada that will influence future rectification cases.
In Canada (Attorney General) v. Fairmont Hotels Inc., the majority of the Supreme Court found that two Ontario courts had erred in holding that the respondent’s intention of tax neutrality could support a grant of rectification.
“A common continuing intention does not suffice,” Justice Russell Brown wrote for the majority. “It is limited to cases where a written instrument has incorrectly recorded the parties’ antecedent agreement. In other words, rectification is not available 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.”