Background
This case arises from a dispute between brothers Abdul Razak Alyousef (respondent) and Anes Alyousef (appellant) over a business partnership and related corporate entities, including 2296411 Ontario Inc. (“229”). The trial judgment, issued by Justice Doi of the Superior Court of Justice on August 28, 2023 (2023 ONSC 4899), awarded damages to the respondent. The core of the damages calculation turned on the partnership’s net profit during a contract period with Milkman Inc. between 2013 and 2017.
The Court of Appeal had previously dismissed the appeal and cross-appeal in reasons dated February 6, 2026 (2026 ONCA 78), but reserved judgment on the proper calculation of the partnership’s net profit for the Milkman Inc. contract period. A further addendum dated April 15, 2026 (2026 ONCA 280) again dismissed the appeal and cross-appeal, while leaving open the question of whether 229’s income taxes had been paid to the Canada Revenue Agency (“CRA”) for the relevant taxation years — a figure that would affect the after-tax net income used to compute the respondent’s damages.
The court invited written submissions on the outstanding tax issue. The appellants responded with a sworn affidavit from Anes Alyousef confirming that $8,348.36 had been remitted to the CRA, supported by CRA notices of assessment for the 2014 through 2017 taxation years confirming that no further taxes were owed by 229 for those years.
The Court’s Holding
The Court of Appeal accepted the appellants’ affidavit evidence and accompanying CRA notices of assessment as confirmation that 229 had paid $8,348.36 in income taxes for the relevant taxation years and that no further amount was owing. On that basis, the court directed that $8,348.36 be deducted from 229’s net income figure to produce an after-tax income figure, which would then be used to recalculate the damages owed to the respondent.
The court further directed that if the parties cannot reach agreement on the recalculated damages figure or on the disposition of costs of the appeal and cross-appeal, they may file brief written submissions of no more than two pages, plus a costs outline, within 10 days of the release of these reasons.
Key Takeaways
- Where a damages award depends on a corporate entity’s after-tax net income, confirmed tax remittances to the CRA — evidenced by a sworn affidavit and notices of assessment — will be deducted from the net income figure before damages are finalized.
- Appellate courts may resolve damages calculations in stages through addenda, reserving discrete accounting or tax issues for further submissions rather than remitting the entire matter to trial.
- CRA notices of assessment confirming no further taxes are owing constitute sufficient evidence to settle an outstanding tax-payment issue in civil damages proceedings.
Why It Matters
This decision illustrates how Ontario appellate courts manage complex business-dispute damages that hinge on unresolved accounting questions. By issuing successive addenda rather than a single definitive judgment, the Court of Appeal was able to resolve discrete factual issues — here, confirmed tax payments — without ordering a new trial or remitting the matter below, thereby preserving judicial efficiency while ensuring the damages award reflects the corporation’s true after-tax financial position.
For practitioners, the case is a practical reminder that corporate income tax obligations and their proof through CRA documentation can directly affect civil damages calculations in partnership disputes, and that appellate courts will require evidentiary confirmation — not mere assertion — before adjusting a damages figure on that basis.