In Collins Family Trust v. Canada (Attorney General), 2020 BCCA 196, aff’g 2019 BCSC 1030, the Court affirmed Re Pallen Trust, 2015 BCCA 222, and held that, even Fairmont, 2016 SCC 56, and Jean Coutu (PJC), 2016 SCC 55, rescission remains available to a taxpayer, if the tests for applying the remedy are met, even where a tax advantage results from granting the remedy. Rescission is available for a voluntary transfer of property where a “mistake of sufficient causative gravity” has occurred regarding the legal nature of a transaction or a matter of fact or law basic to the transaction and it would be “unconscionable, unfair or unjust” to leave the mistake uncorrected. Aggressive tax planning is a factor to consider in deciding whether to grant the remedy.
Marshall Haughey and Wade Ritchie, “Correcting Tax Mistakes: Rescission Reborn” Canadian Tax Focus 10:4 (November 2020)
