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Simon Shields, Lawyer

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Common Law - Development

Inter-Leasing, Inc. v. Ontario (Revenue) (Ont CA, 2014)

In this otherwise mundane tax case, the court noted as follows on the incremental development of the common law:
[78] In Friedman Equity Developments Inc. v. Final Note Ltd., 2000 SCC 34 (CanLII), 2000 SCC 34, [2000] 1 S.C.R. 842, the Supreme Court considered the factors relevant to a decision whether to change a rule of property or contract law, at para. 46:
While our common law rules must be in step with the evolution of society as a whole, when examining a proposed change to a rule of property or contract law, we must also examine whether the rule is consistent or inconsistent with commercial reality. A rule may have a rationale which appears to be anachronistic while continuing to serve a useful commercial purpose. Our common law is replete with artificial rules which, although they may appear to have no underlying rationale, promote efficiency or security in commercial transactions. Such rules, in the circumstances where they apply, must be followed to create a legally recognized and enforceable right or obligation. Parties, therefore, structure their relations with these rules in mind and the rules themselves become part of commercial reality. Commercial relations may evolve in such a way that a particular rule may become unjust and cumbersome, and may no longer serve its original purpose. When the hardship which a rule causes becomes so acute and widespread that it outweighs any purpose that it may have once served, it is certainly open to a court to make an incremental change in the law. However, there must be evidence of a change in commercial reality which makes such a change in the common law necessary.

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