The plaintiffs, including a software partnership and its investors, brought an action against the Canada Revenue Agency and its agents for negligent investigation, misfeasance in public office, and Charter breaches arising from a tax audit and subsequent criminal investigation into a suspected tax shelter fraud.
The court dismissed the action, finding that the auditor did not cross the line into a criminal investigation improperly, and that the investigators met the standard of care.
The court concluded there was substantial evidence supporting the CRA's belief that the enterprise was a fraudulent tax scheme, and no actionable wrongs were committed by the defendants.