Aviva Canada Inc. formerly CGU Group Canada Ltd. v. The Queen, 2006 TCC 57 -- summary under Commercial Activity

In order to settle a dispute between two insurance companies (Aviva and Underwriters) regarding the ownership of trademarks, the two companies agreed to a transfer of the trademarks to Aviva for $5 million. Underwriters first transferred the trademarks on s. 85 rollover basis to a related company, NN, to allow NN to utilize non-capital losses, before their on-sale by NM. Aviva paid GST to NN and applied to CRA for a rebate of tax paid in error. CRA refused. Woods J found that the sale by NN did not have "any of the characteristics of a trading transaction" (para. 24), noting that NN "did not negotiate the sale and likely acted as an accommodation party in order to minimize the income tax payable on the sale," so that the sale was not an adventure in the nature of trade. She also found that the sale was not a "business," noting that a business must be "carried on" to fall within para. (a) of the definition of "commercial activity" – nor was there any evidence that the sale was connected to any existing commercial activity of NM (including any connection which could engage ss. 141.1(1)(a) and (2)(a).) Accordingly, the sale was not a taxable supply and Aviva was entitled to the rebate.