Zeifmans – Federal Court of Appeal confirms that its earlier TD Bank decision has been overruled (re prior judicial authorization for s. 231.2(1) demands)
An accounting firm (Zeifmans) unsuccessfully argued before Walker J in the Federal Court that the Minister should have sought prior judicial authorization under s. 231.2(3) of a requirement to provide information (RFI) issued in the course of a CRA audit of three related resident individuals (the “named persons”) who were Zeifmans clients. The RFI set out a detailed list of required information and documents in relation to the named persons and all “entities owned, operated, controlled or otherwise connected to [such] individuals” (the “unnamed entities.”)
In confirming the decision below that no such prior judicial authorization was required, Stratas JA adverted to Toronto Dominion Bank (where the FCA found that a demand to the Bank to disclose the name, address and telephone number of an account holder to whose account a tax debtor had deposited a cheque was invalid as there was no prior judicial authorization under s. 231.2(2)) and stated:
Artistic Ideas, eBay and their progeny correctly interpret section 231.2. To the extent that Toronto Dominion Bank stands for something different from Artistic Ideas, eBay and their progeny, it should not be followed.
He also confirmed the finding below that CRA had not targeted the unnamed entities for investigation (so as to require judicial authorization).
Neal Armstrong. Summary of Zeifmans LLP v. Canada (National Revenue), 2022 FCA 160 under s. 231.2(1).