Jonathan Hue-Fay Ip

The respondent brought a motion seeking an order requiring a new nominee to attend on behalf of the appellant at the examination for discovery, arguing the initial nominee was not a knowledgeable officer.

The appellant brought a cross-motion seeking an order directing the respondent's nominee to answer a specific question and produce all working papers from the audit and appeals file.

The Tax Court of Canada dismissed both motions.

The Court found the appellant's nominee was an officer and the respondent failed to establish she was not knowledgeable or unwilling to inform herself.

The Court also found the respondent had fulfilled the undertaking requested by the appellant regarding document production.

The appellant, a wholesaler, sold tobacco products delivered to the Six Nations Reserve.

The Minister reassessed the appellant for uncollected GST, alleging the sales were to non-status Indians.

The appellant argued the sales were to status Indians and exempt under section 87 of the Indian Act.

The Tax Court found that the status Indians were the recipients of the supplies, making the sales exempt from GST.

The appeals were allowed and the reassessments vacated.

Jayco, Inc. appealed the dismissal of its action against the Canada Revenue Agency (CRA) and Her Majesty the Queen in Right of Canada.

Jayco sought recovery of legal costs and interest incurred while successfully contesting a GST/HST assessment.

The claims were based on theories of common law indemnity (as a statutory agent under the Excise Tax Act) and private law duty of care (negligence) owed by the CRA during an audit.

The Court of Appeal dismissed the appeal, affirming that no common law right to indemnity exists for statutory agents in this context, nor does the CRA owe a private law duty of care to taxpayers during administrative audits, distinguishing such audits from criminal investigations.

The plaintiff, a U.S. business registered to collect HST, successfully appealed a $14 million CRA tax assessment but incurred over $1.4 million in interest and professional fees.

The plaintiff sued the government for indemnity and negligence, alleging the CRA acted in bad faith during the audit.

The defendants moved to strike the statement of claim.

The Superior Court of Justice granted the motion, finding that neither the common law nor the Excise Tax Act provides a right to indemnity for such costs, and that the CRA does not owe a private law duty of care to taxpayers or tax collection agents during an audit.