An accounting firm filed a corporate client's tax returns after the due date, resulting in the denial of approximately $550,000 in tax credits by the Canada Revenue Agency.
The client received notices of assessment in April 2010 and pursued administrative remedies through the CRA appeal process, with the accountant's assistance, until May 2011 when the CRA advised it intended to confirm the assessments.
The client commenced a negligence action in August 2012.
The motion judge dismissed the action as statute-barred under the Limitations Act, 2002, finding the claim was discoverable in April 2010.
The Court of Appeal allowed the appeal, holding that the claim was not discovered until May 2011 when the CRA appeal process concluded, as it would not have been appropriate to commence proceedings while alternative remedies remained available.