In May 2015, the plaintiff authorized her law firm to represent her in making a voluntary disclosure of her Swiss assets, and in the summer and fall of 2015, various documents were collected and organized to this end. However, on September 25, 2015, CRA sent a letter to the plaintiff indicating that her 2005 to 2014 taxation years were under audit regarding a failure to declare foreign property. A filing made by the plaintiff on October 20, 2015 under the CRA voluntary disclosure program (VDP) was rejected by the first and second decision maker on the basis that it was not voluntary.
Walker J found that this decision did not represent an unreasonable exercise of Ministerial discretion under s. 220(3.1). She agreed (at para. 40) that it would have been “inequitable and unreasonable” for a voluntary disclosure to have been rejected as being non-voluntary if made one minute after communication of an audit, but noted that this was not the situation under review, stating (at para. 42, TaxInterpretations translation):
Plaintiff's decision to begin identifying the scope of potential disclosure is not the end of the story. … Intentions can change, as can the scope of the proposed disclosure. … The potential scope of the Disclosure could not be determined without further investigation by Plaintiff and her counsel. … I agree with the Respondent that there is an important distinction between the date information is actually disclosed under the VDP and the date the taxpayer makes the decision to investigate the making of a disclosure.
She further noted (at para. 45):
[T]he fact that Mr. Gagnon [the initial VDP contact] requested complete information for the years covered by the Disclosure does not suggest a promise on the part of Mr. Gagnon or the VDP to accept his request for disclosure. … His requests sought to complete the record.
However, the (second) decision under review was annulled given that the involvement of the first decision maker in the process for the second review decision “was not minimal” (para. 52), with regard also being had to an internal email from a CRA manager (that “We need to ensure that this VDP is denied as it should not be considered to have been voluntary but rather as a result of audit contact”) “constitute[d] unwarranted interference with the VDP's evaluation of the case” (para. 54) (although there was no evidence that this email in fact interfered with the second decision).
The decision was remitted to the Minister for a fresh determination by an authorized agent with no involvement with the previous decisions.