Lipson - Ontario Court of Appeal finds that a CRA reassessment may not have commenced the limitations period for an allegedly negligent tax opinion

A law firm provided a tax opinion that was used to promote leveraged donations, which CRA disallowed.  The plaintiff sought to certify a class action against the law firm.

The motion judge declined to certify on the basis that the applicable two-year limitations period had expired - as it started running in 2004 when CRA proposed to disallow the credits, so that the negligence action was barred when it was launched in 2009.

The Court of Appeal found that it was not clear that the limitations period had commenced in 2004.  Notice of a "potential problem" with the taxpayers' claimed charitable tax credits was not knowledge of a negligence claim.  There was potential merit in the plaintiff's allegation that they did not have that knowledge until two representative test cases were settled in 2008 in the Crown's favour.

Scott Armstrong.  Summary of Lipson v. Cassels Brock & Blackwell LLP, 2013 ONCA 165, rev'g 2012 DTC 5013 [at 6604], 2011 ONSC 6724 under General Concepts - Negligence and Fiduciary Duty.