Nancy Arnold

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.

The plaintiff brought a proposed class action against the Canada Revenue Agency and a CRA employee on behalf of investors in a tax-driven investment scheme.

The parties negotiated a settlement to resolve the tax disputes and civil claims, which was accepted by over 90% of the putative class members.

The plaintiff moved for a pre-certification order to discontinue the proposed class action to implement the settlement.

The court approved the discontinuance under s. 29 of the Class Proceedings Act, 1992, finding it was not prejudicial to the putative class members.

The defendants, having successfully moved to dismiss the plaintiff's action under Rule 21, sought costs of over $35,000 on a partial indemnity basis.

The plaintiff argued the amount was excessive for a straightforward motion and pointed to his own costs outline of approximately $6,600.

The court found that while the Department of Justice lawyers were entitled to costs, the hours claimed were disproportionate to the narrow legal question involved.

The court awarded the defendants $15,000 in all-inclusive partial indemnity costs, balancing the moving party's burden with the reasonable expectations of the unsuccessful party.