Glenn Smith

The defendants brought motions for summary judgment to dismiss the plaintiff's putative class action regarding a leveraged charitable donation program, arguing the claim was statute-barred.

The plaintiff alleged he relied on the defendants' tax opinions to participate in the program, which the CRA later disallowed.

The court dismissed the motions, finding a genuine issue for trial regarding when the plaintiff discovered his claim, particularly given the ongoing solicitor-client relationship with the defendant law firm that was representing him against the CRA while potentially in a conflict of interest.

The moving parties sought court approval of a proposed settlement in a certified class proceeding relating to a leveraged charitable donation tax shelter.

Participants had claimed inflated charitable tax credits based on loans and security deposits connected to the program, which were later disallowed by the Canada Revenue Agency.

The settlement provided for an $11 million payment by a defendant law firm alleged to have issued legal opinions supporting the program’s legality, with funds distributed to class members and covering counsel fees and administration.

The court applied established factors governing settlement approval in class proceedings and found the agreement fair, reasonable, and in the best interests of the class given significant litigation risks.

The court also approved class counsel fees but declined to award additional compensation to the representative plaintiffs, finding their contribution commendable but not exceptional.