Mon-Oil Ltd. v. Canada
A-667-92
Hugessen J.A.
10/3/93
23 pp.
Appeal from Trial Division's decision ((1992), 50 F.T.R. 260) allowing claim for petroleum incentives totalling $3,680,000 in 1985 -- Cross-appeal by respondent from reduction of amount originally claimed -- Respondent, Mon-Oil, entering into agreements with Exco Energy Ltd. involving exploration for oil and gas on Canada lands -- All exploration expenses paid deemed to be eligible for incentive under Petroleum Incentives Program Act (PIP Act) and to qualify as Canadian exploration expenses under Income Tax Act -- Mon-Oil's incentives amounting to 80% of eligible exploration expenses -- Full amounts claimed by Mon-Oil virtually paid in 1983 and 1984 -- Exco deemed to be in bankruptcy in 1985 -- Action begun in 1988 for amounts owing under PIP Act -- Trial Judge concluding Mon-Oil entitled to be paid incentives relating to eligible exploration expenses applied for in 1985-Expenses incurred by Mon-Oil found to be reasonable -- Mon-Oil's claim for general damages for loss of opportunities dismissed by Trial judge as too speculative -- Four grounds of appeal advanced by Crown, all rejected -- Question of burden of proof entirely academic herein -- Burden to prove claim for alleged overpayments in relevant years and to demonstrate unreasonableness of expenses on Crown -- Reasonableness of expense question of fact-Allegations of fraudulent activity on part of Exco and Mon-Oil withdrawn by Crown at beginning of trial -- After trial, principal of Exco tried and convicted of fraud against Petroleum Incentives Program -- Crown not entitled on appeal to refer to conviction by producing it as "jurisprudence" as knowingly and deliberately choosing not to offer evidence of fraud at trial -- Appeal and cross-appeal dismissed -- Petroleum Incentives Program Act, S.C. 1980-81-82-83, c. 107, ss. 3, 4, 12, 13, 14, 15, 16, 24.