In an addendum to its earlier reasons dismissing the appeal and cross-appeal, the Court of Appeal addressed the calculation of partnership net profits for the purpose of determining the respondent's damages.
The appellants argued that notional income taxes should be deducted from amounts the trial judge ordered included in corporate income, such as diverted wages and personal expenses.
The Court rejected this argument, finding no evidence that taxes were paid on the diverted funds.
However, the Court ordered the appellants to provide Canada Revenue Agency documentation to prove actual income taxes remitted by one of the corporate defendants, which would be deducted from its net income if substantiated.
