Minister of National Revenue denied taxpayer’s claim of non-capital losses in respect of foreign currency trading activities. Taxpayer’s appeal involved issues relating to possibility of reassessments being statute-barred, trading transactions themselves, and imposition of gross negligence penalties. Taxpayer brought motion for order requiring Minister to provide answers to questions on examination for discovery for which answers were refused. Motion granted in part. Minister was to produce complete report, subject to redactions of names of third party taxpayers. Report was relevant as its purpose was to assist CRA in determining whether or not transactions had attribute of legitimate transactions. Canada Revenue Agency (CRA) auditor was not to be gatekeeper with respect to documents that should be provided to court. Once court determined that document was relevant, Minister must produce complete document, not selected portions unless irrelevant portions were redacted to protect privacy of third party. Minister was to produce various CRA working papers and position papers relied on by auditor. Minister was to answer questions regarding instructions CRA headquarters provided to auditor when auditing taxpayer. Minister was to provide communications with commissioner’s office and another CRA office. Information that CRA headquarters officials provided to auditor or used when reviewing her work was relevant. Minister was not required to produce information on negotiations between Minister and other taxpayers because it was subject to settlement privilege. Minister was obstructing discovery process, so taxpayer was awarded $10,000 in costs plus disbursements.
Paletta v. The Queen (2017), 2017 CarswellNat 6899, 2017 TCC 233, Steven K. D’Arcy J. (T.C.C. [General Procedure]).