Upon the appellant entering into an agreement in August 2013 to sell a property to a third party (“Starwood”), Starwood took over the carriage of an appeal that the appellant had launched to the OMV (which, if successful, would have enhanced the value of the property). Carriage of the appeal reverted to the appellant when the transaction failed to close. The litigation between the appellant and Starwood in connection with the failure of the sale to close was settled in 2018 by the agreement of the appellant to pay $450,000 to Starwood (plus return the $360,000 deposit) pursuant to a settlement agreement that provided inter alia that Starwood was to assign to the appellant all its rezoning application plans and reports.
MacPhee J found that the $450,000 payment was, for the most part, compensation to Starwood for expenses incurred by it as a result of the failure of its purchase to close so as to restore it to some degree to its position prior to such failure of sale of the property; and that although “certain intellectual property was received pursuant to the settlement agreement” he was unable “to determine what portion of the $450,000 the Appellant paid to Starwood was for the assignment of Starwood’s rights, title and interest to Starwood’s rezoning application plans and reports” (para. 30). Furthermore, s. 182(1) did not apply because the amount was paid by rather than to the supplier under the sale agreement.
In addition, the appellant had not satisfied the Input Tax Credit Information (GST/HST) Regulations.