A BC corporation obtained recognition from the BC Supreme Court that a Dutch-law annulment declaration it obtained retroactively voided a cash capital contribution it had made in error. The corporation made a cash capital contribution to a Dutch cooperative of which it was the sole member. It was later realized that this contribution gave rise to a deemed dividend that was subject to tax. The BC corporation and the Dutch co-op entered into a formal declaration, governed by Dutch law, declaring that the capital contribution agreement was annulled with retroactive effect and that the contribution was returnable to the BC corporation.
The BC Supreme Court declined to grant a declaration that the capital contribution was void ab initio and alternatively an order rescinding the transaction. In doing so, the Court found that the evidence established that the agreement had been deemed to have never existence and the contribution had been repaid and that therefore the was nothing left for a Canadian court to rescind. Although the requested relief was denied in form, the decision recognizes the substantive success of the Dutch annulment declaration.
Tracey M. Cohen, K.C. and Julia Kindrachuk (Litigation & Dispute Resolution) represented the petitioner Kraft Heinz Canada ULC.
The BC Supreme Court declined to grant a declaration that the capital contribution was void ab initio and alternatively an order rescinding the transaction. In doing so, the Court found that the evidence established that the agreement had been deemed to have never existence and the contribution had been repaid and that therefore the was nothing left for a Canadian court to rescind. Although the requested relief was denied in form, the decision recognizes the substantive success of the Dutch annulment declaration.
Tracey M. Cohen, K.C. and Julia Kindrachuk (Litigation & Dispute Resolution) represented the petitioner Kraft Heinz Canada ULC.
Jurisdiction
- British Columbia
