Catlos – Tax Court of Canada finds that a s. 8(1)(b) deduction was unavailable respecting a defence to shareholders’ claims of unjust enrichment including excessive salaries

Russell J was prepared to accept a dictum in Fenwick that the deduction under s. 8(1)(b) for establishing a right to receive remuneration extended to an employer seeking a return of remuneration paid, but found that s. 8(1)(b) did not extend to legal fees incurred in defending against claims made against individuals who were officers and shareholders of a private company for allegations of unjust enrichment and breach of fiduciary obligations to the other shareholders – notwithstanding that success of such claims likely would have required them to “disgorge” their allegedly excess remuneration.

Neal Armstrong. Summary of Catlos v. The Queen, 2018 TCC 177 under s. 8(1)(b).