It seems that, in S & D International Group Inc. v. Canada (Attorney General), 2011 ABQB 230, the court confronted a situation where the parties engaged in some do-it-yourself tax planning and, then, some do-it-yourself tax repair work. Fortunately for the parties, the court was willing to grant relief by rectifying the transactions that caused the tax problems.
Interestingly enough, the court had little trouble dismissing outright the effectiveness of a “cancellation agreement” the parties executed after the CRA advised them of its intention to reassess. The cancellation agreement purported to undo the transactions that formed the basis of the CRA reassessment. The court simply noted that the agreement did nothing to change the tax consequences of the transactions the agreement supposedly cancelled. Hence the need for the rectification order.
