In Scheuer v R, 2015 FC 74, Mr Justice Diner dismissed an appeal from an order of a prothonotary in which he dismissed a motion to strike a statement of claim against the CRA for failing to warn taxpayers adequately about a particular donation tax shelter. The Court agreed that the duty alleged is novel, but it is not “plain and obvious” that a claim based on the duty will fail.
Apparently the statement of claim alleges the following facts relating to the CRA’s handling of the relevant donation program (per ¶26):
- CRA issued a tax shelter number to GLGI without properly assessing the scheme submitted by GLGI and with knowledge that the Plaintiffs would rely on the tax shelter number as an indication that GLGI had met the requirements of the ITA (para 147);
- The Plaintiffs relied on the tax shelter number (paras 147, 157);
- The Plaintiffs are separate from the general public in that they are part of a group of taxpayers who donated to GLGI (para 157);
- CRA was aware of potential issues surrounding the charitable donations made to GLGI as early as the year 2000 but took no steps to warn or inform Canadian taxpayers and in particular the Plaintiffs (para 149);
- The Plaintiffs filed their tax returns to CRA which included the specific information of the donations they made based on the tax shelter numbers (para 150);
- CRA received information returns from the GLGI promoters which reported all their sales, as required by subsection 237.1(4) of the ITA (para 151);
- CRA assessed each individual tax return separate and apart from all other Canadians. At this time, CRA had information available to it regarding GLGI’s sales (para 152);
- CRA accepted the Plaintiffs’ donations to GLGI, creating further reliance by the Plaintiffs on CRA that the scheme was approved by CRA (para 154);
- CRA waited until 3 years later to reassess the tax payer, when CRA knew or ought to have known that the donation would not be accepted (para 156); and
- CRA has continued to allow GLGI to market its program to Canadian taxpayers, knowing that none of the tax credits issued will be honoured by CRA (para 155).
