Chad – Federal Court declines to issue a compliance order to the Canadian protector of non-resident trusts who had refused his request for information demanded under s. 231.2

Mr. Chad was the protector of three non-resident trusts and the president or former director of two non-resident companies. CRA sent a requirement pursuant to s. 231.1 to Chad to provide documents and answer questions respecting such entities, and then sent him a requirement pursuant to s. 231.2 to produce the information. In both cases, the trustee of the trusts refused to provide the information to Chad, and the director or lawyer for the two companies so refused on the grounds that doing so was not in the best interests of their shareholder (which were two of the respective trusts).

In rejecting Chad’s submission that the requested documents were “foreign-based documents” which could only be requested under s. 231.6(2), Favel J noted that the “[c]ourts have yet to definitively rule on whether sections 231.1 and 231.2 apply to foreign-based information or documents,” but found that, as in the 2022 Ghermezian decision, the evidentiary record was lacking as to whether the mooted information was accessible from Canada. However, in dismissing the Minister’s application for a compliance order pursuant to s. 231.7, Favel J stated that he was satisfied, on a balance of probabilities, that Chad had made reasonable efforts to satisfy the requirements and that he did not possess and could not access the documents and information.

Neal Armstrong. Summary of MNR v. Chad, 2024 FC 460 under s. 231.7(1).