A payment of an amount pursuant to a settlement can be subject to HST. What happens where the settlement agreement is silent on whether the amounts payable under it include HST? In Automodular Corporation v. General Motors of Canada Limited, 2018 ONSC 1640, the Court considered whether the payment of HST as an additional amount was an implied term of the settlement agreement. The Court held that a settlement agreement is just another contract. The Court applied the ordinary rules of contract law for reading in implied terms. The Court held that, in the particular circumstances before it, it was not an implied term of the settlement agreement that HST be payable as an additional amount. See summary by R. G. Kreklewetz and Steven Raphael, “When a Settlement is Silent on GST/HST” 26:6 Canadian Tax Highlights (June 2018).
