Alistair G. Campbell

The appellant brought a motion to strike the respondent's reply, arguing that the Minister was statute-barred from reassessing his 2017 taxation year.

The appellant contended that his characterization of a real estate gain as a capital gain rather than business income was a question of mixed fact and law, which could not constitute a misrepresentation under subparagraph 152(4)(a)(i) of the Income Tax Act.

The Tax Court dismissed the motion, finding it was not plain and obvious that the respondent's position had no reasonable prospect of success, as a filing position could potentially constitute a misrepresentation depending on the factual context to be determined at trial.

Following a successful appeal vacating a gross negligence penalty, the appellant brought a motion for costs on a lump sum basis.

The Tax Court of Canada reviewed the factors under section 147 of the Tax Court of Canada Rules, noting the appellant's complete success, the significance of the amount at issue, a principled settlement offer made by the appellant, and the Minister's failure to interview the appellant before confirming the reassessment.

The Court awarded partial indemnity costs at the upper limit of 75% of the appellant's legal fees, plus disbursements and costs of the motion, totaling $149,842.22.

The appellant appealed a reassessment imposing a gross negligence penalty under subsection 163(2) of the Income Tax Act for her 2010 taxation year.

The penalty was assessed after a tax preparer, DeMara Consulting Inc., filed an amended return claiming fictitious business and capital losses on her behalf.

The Tax Court of Canada found that while the appellant participated in making false statements by signing forms to obtain a business number, she did not do so knowingly or under circumstances amounting to gross negligence.

She had reasonably relied on her husband, who had historically managed her tax affairs.

The appeal was allowed and the penalty vacated.