Johnson - Federal Court of Appeal decision might (or might not) require taxpayers to waive privilege in connection with a statute-barring defence

The taxpayer's gains from investing with the perpetrator of a ponzi scheme were not statute-barred because she had failed to check the story of the rogue - that he was making tax-paid capital distributions out of a trust to her - with an independent advisor. This finding is problematic if it is interpreted as indicating that (notwithstanding that in this context, the onus is on the Crown rather than the taxpayer) there somehow is an onus on a taxpayer to testify that he or she in fact had received legal advice on the otherwise statute-barred transactions that have purportedly been assessed by CRA.  There is a judicial doctrine that once a taxpayer advances a defence that legal advice was received on a point in issue, all solicitor-client privilege respecting that  communication, and perhaps surrounding communications, with or from that advisor is lost.  See, for example, Bentley v. Stone, Verney v. Great-West Life, Toronto-Dominion Bank v. Leigh Instruments, and Softsim Technologies.

Neal Armstrong.  Summaries of Johnson v. The Queen, 2012 FCA 253 under s. 152(4)(a)(i) and s. 3 -general.