Thomas M. Boddez

The appellant taxpayer was audited by revenue officials who obtained documents and statements using their statutory requirement powers.

The file was subsequently transferred to special investigations, and the taxpayer was charged with tax evasion.

The Supreme Court of Canada applied the principles from R. v. Jarvis to determine when the audit became an investigation engaging the taxpayer's Charter rights.

The Court concluded that the investigation commenced after a specific meeting, meaning evidence gathered prior to that point was admissible, while evidence gathered afterward using audit powers violated the Charter and was subject to exclusion under s. 24(2).

The appeal was dismissed and the order for a new trial was confirmed.

The respondents were limited partners in a partnership that purchased a mini-warehouse.

The partnership generated losses, which the respondents deducted for income tax purposes.

The Minister reassessed the respondents, disallowing the losses on the basis that the partnership did not carry on business with a reasonable expectation of profit.

The Supreme Court of Canada, applying the test from the companion case of Stewart v. Canada, held that the storage park operation was commercial in nature and lacked any personal element.

Therefore, the reasonable expectation of profit test did not apply, and the operation constituted a source of income under s. 9 of the Income Tax Act.

The Crown's appeal was dismissed.