Burlington Resources Finance – Tax Court of Canada states that taking discovery questions “under advisement” should stop

CRA disallowed, in full, under s. 247(2)(a), the deduction by Burlington of guarantee fees paid to its U.S. parent. Justice brought a motion respecting 1200 of their questions posed in the examination for discovery, on the basis that Burlington had either improperly refused to answer, or not fully answered, the questions. Part of the concern of Burlington’s U.S. parent was that it had voluminous boxes of documents stored in various departments which had been largely indexed by each department, but with no central indexing system being available. The overall approach of D’Auray J was reflected in her comment that:

I am not persuaded that the costs, time, and effort involved for Burlington to respond to any relevant questions would be disproportionate, given the amount of money involved which according to the Respondent is close to $100 million, the importance of the case and the complexity of the issues. Proportionality must not defeat the purposes of discovery… .

However, in what might be a significant concession to Burlington, she stated:

Where Burlington is ordered to answer questions, it will not need to search beyond the indexes. In other words, a truly unguided rifling through 12,000 boxes would not be required.

Approximately 1700 questions were taken “under advisement.” D’Auray J stated:

In my view, the practice of using the quasi-objection “under advisement” needs to stop. It is not a response contemplated by section 107 of the Rules.

Neal Armstrong. Summary of Burlington Resources Finance Company v. The Queen, 2017 TCC 144 under Tax Court of Canada Rules (General Procedure), s. 95(2), s. 107(1).