The Appellant brought a motion to strike out or expunge several provisions from the Respondent's Second Amended Reply, including allegations of sham, conclusions of law, and abandoned arguments.
The Tax Court of Canada dismissed the motion, primarily relying on the "fresh step" rule in section 8 of the Tax Court of Canada Rules (General Procedure), as the Appellant had taken several steps in the litigation after the impugned provisions were first pleaded.
The Court also found that the Respondent was not precluded by issue estoppel or judicial admission from alleging that the foreign currency trades were a sham.
